UPDATE 1-Israeli private eye arrested in London over alleged hacking for US firm

(Updates with FBI declining to comment 10th paragraph)

By Sam Tobin

LONDON, May 2 (Reuters) - An Israeli private investigator wanted by the United States was arrested in London over allegations that he carried out a cyberespionage campaign on behalf of an unidentified American PR firm, a London court heard on Thursday.

But an initial attempt to extradite Amit Forlit to the United Sates was thrown out by a judge at Westminster Magistrates' Court on Thursday on a legal technicality.

Amy Labram, a lawyer representing the United States, told the court Forlit "is accused of engaging in a hack for hire scheme".

Labram said that the U.S. allegations include that an unnamed Washington-based PR and lobbying firm paid one of Forlit's companies 16 million pounds ($20 million) "to gather intelligence relating to the Argentinian debt crisis".

Forlit and his lawyer did not immediately return messages seeking comment.

Forlit was arrested under an Interpol red notice at London's Heathrow Airport as he was trying to board a flight to Israel, according to the U.S authorities. It was unclear when Forlit was arrested.

Forlit is wanted in the U.S. on three charges: one count of conspiracy to commit computer hacking, one count of conspiracy to commit wire fraud and one count of wire fraud.

A judge ruled that the attempt to extradite Forlit by the United States could not continue as he was not produced in court within the timeframe required under British extradition law.

"He was not produced at court as soon as practicable and the consequences of that ... he must – I have no discretion – he must be discharged," Judge Michael Snow ruled.

The Federal Bureau of Investigation declined to comment.

Forlit has separately been accused of computer hacking in New York by aviation executive Farhad Azima. Azima, whose emails were stolen and used against him in a 2020 trial in London, is suing Forlit and others in federal court in Manhattan.

Forlit has previously acknowledged retrieving Azima's emails but has denied hacking, telling Reuters he innocently stumbled across the messages "on the web". (Reporting by Sam Tobin in London, additional reporting by Raphael Satter in Washington and Dan Whitcomb in Los Angeles, Editing by Alexandra Hudson and Michael Perry)