Ben Zygier was being investigated for spying before his death in Israel

WHEN Ben Zygier died alone in a maximum-security prison in Israel he was under investigation by ASIO, which suspected him of using his Australian passport to spy for Israel, Fairfax Media can reveal.

Benji, as he was known by those close to him in Jerusalem's Jewish community, reacted angrily when Fairfax Media confronted him in early 2010 with allegations that he was working for Israel's security agency, Mossad.

"Who the f--- are you?" an incredulous Zygier asked Fairfax's then Middle East correspondent Jason Koutsoukis. "What is this total bullshit you are telling me?"

He expressed shock at the suggestion he was under any kind of surveillance and said that he had also changed his name for personal reasons.

''I have never been to any of those countries that you say I have been to,'' Mr Zygier said. ''I am not involved in any kind of spying. That is ridiculous.''

Koutsoukis said: "He was at first angry, then exasperated that I wouldn't accept his denials at what I was putting to him.

"He told me he was like any other Australian who had made aliyah [immigration to Israel] and was trying to make a life in Israel."

Fairfax Media spoke to Mr Zygier in Israel in early 2010 after learning that ASIO was investigating at least three dual Australian-Israeli citizens who had emigrated to Israel in the past decade. At the time, ASIO would not comment on the case. On Wednesday, the agency again refused to comment on the case.

Each of the men had travelled back to Australia separately to change their names and obtain a new passport, two intelligence sources said at the time in Koutsoukis' story published in The Age and The Sydney Morning Herald.

One man had changed his name three times, and others had changed theirs twice, the source said, from names that identified them as European-Jewish to ones that were Anglo-Australian.

In each case, the men had used the new passports to travel to Iran, Syria and Lebanon - all countries that do not recognise Israel and do not allow Israelis, or anyone with an Israeli stamp in their passport, to enter. Israel also bans its citizens from travelling to these countries for security reasons.

At the time, Fairfax Media was investigating the men's involvement with a European communications company that had a subsidiary in the Middle East. The company's chief executive denied the men were ever employed by the organisation.

It is believed - although Fairfax Media has been unable to confirm - that Mr Zygier travelled back to Australia in 2009 to attend Monash University in Melbourne, where he was doing an MBA. Along with his Ben Zygier identity, he also used Ben Alon, Ben Allen and Benjamin Burrows.

A source at the time observed him over several days sitting with a group of students from Saudi Arabia and Iran at the university's Caulfield campus.

The source said: ''[Australian Taxation Office] records from 2008 show that he applied for and was approved a HECS loan for postgraduate studies at Monash University where he is currently [November 2009] studying.''

Since 2006, Monash University has been involved in education in Middle Eastern countries, and in 2007 it proposed an initiative for higher-degree students from Saudi Arabia. On May 27, 2010, it announced it had signed a number of higher education agreements worth $A14 million with universities in Saudi Arabia.

Apart from his move to Israel and his MBA study, little is known about Mr Zygier's movements over the decade before he died, except that he was working in insurance law at the Australian firm Deacons in March 2002.

It was well known that Israel approached people who emigrated from other countries to assist Israel by handing over their passports, an Israeli intelligence expert told Fairfax Media in 2010.

"Their names are used later but the person providing the passport is not involved," the expert said.

It is understood the ASIO investigation into Mr Zygier and the two other men began at least six months before the January 10, 2010, assassination of senior Hamas commander Mahmoud al-Mabhouh, widely believed to have been carried out by Mossad using passports obtained from Australia and Europe.

Three of those suspected of taking part in the assassination were travelling on Australian passports, using the names of dual Australian-Israeli citizens, authorities in Dubai confirmed.

There is no suggestion that the three Australian names linked to al-Mabhouh's assassination are connected to Mr Zygier or the other men being investigated by ASIO.

After initially denying the Australian government had any knowledge that one of its citizens was detained in Israel, Foreign Minister Bob Carr said some officers in the Department of Foreign Affairs and Trade were aware of his detention.

The revelations raises questions about how much the Australian government knew about the conditions under which Mr Zygier was being held in the maximum security Ayalon Prison.

The ABC's Foreign Correspondent program, which named Mr Zygier as "Prisoner X", said he hanged himself in the specially constructed cell that was meant to be suicide proof.

The program alleged the former Melbourne man had been recruited by the Israeli spy agency Mossad before his disappearance in early 2010. He had moved to Israel 10 years before that, changing his name to Ben Alon and marrying a local woman with whom he had two children, the program said.

It is unclear what, if anything, Australia was told by the Israeli authorities about the death in custody of one of its citizens, or whether any consular assistance was provided to Mr Zygier during his time in solitary confinement, although human rights groups suspect "Prisoner X" was allowed no contact with the outside world.

The story Ben Zygier was being investigated for spying before his death in Israel first appeared on The Sydney Morning Herald.

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