In May 2002, after 2 men from the Bat Ayin settlement were discovered outside a girls' school in a Palestinian neighbourhood on the Mount of Olives with a bomb timed to explode in the morning when students would be arriving, police investigators took 6 people into custody, including Federman, whom the Shin Bet regarded as "the brain behind this organization". He was subsequently accused of having provided the explosives to be used to blow up the girls school, and put under house arrest for over half a year. All charges were later dropped, Federman was acquitted and he successfully sued the state for false arrest. He was in the news recently after his home and farm, which he had built without a building permit, near Kiryat Arba and Hebron was torn down in the middle of the night.