In September 1972, Paglin conspired with Rabbi Meir Kahane, Avraham Hershkowitz, and Yosef Schneider, then members of the Jewish Defense League, to smuggle weapons to Rome and take over the Libyan embassy, kill half of those present, and then escape, as revenge for the murder of the eleven Israeli athletes in Munich. Paglin had a number of weapon stores, which he had gathered from the Sinai Campaign and the Six-Day War. He delivered to Hershkowitz two Carl Gustav submachine guns, two 9mm Beretta pistols, three hand grenades and ammunition for rifles and pistols. The crate, which arrived at the El-Al luggage department disguised as biscuit baking equipment on September 13, aroused suspicion and the contents were discovered. Hershkowitz was arrested on September 15 (and claimed that Kahane had handed them over to the authorities). Paglin was arrested on September 19 and the attorney Shmuel Tamir was hired to represent him. Paglin admitted to Tamir that he gave into temptation and fell victim to one time weakness. Through his aunt, former Knesset Member Beba Idelson, he sent a message to Prime Minister Golda Meir saying that he was willing to meet with her and explain that there was no underground movement against the State. During the trial, Tamir hinted that Rabbi Kahane (who was not arrested) had collaborated with the authorities, and questioned why Kahane's passport wasn't confiscated. During the trial, Paglin received favorable treatment, and stayed at the police station in Nes Tziona and at the Basel Hotel in Tel Aviv. At the end of the trial those involved received light sentences, and Paglin received a one-year suspended sentence. MK Benjamin Halevy, a former Supreme Court judge, summarized the affair in this way: "As a former Irgun member, with serious experience in the underground, Paglin was caught in a trap by people far less serious."