11th Russian Spy Suspect Nabbed At Cyprus Airport

A shadowy money man for a Russian spy ring whose members were assigned a decade or more ago to infiltrate American society has been captured overseas, authorities said today. He was the last of 11 suspects named in a huge bust that threatens to tear recently mending relations between the U.S. and Russia.

The 11th suspect, using the name Christopher Metsos and purporting to be a Canadian citizen, was arrested at the Larnaca airport in Cyprus while trying to fly to Budapest, Hungary, police in the Mediterranean island nation said. He was later released on bail.

Metsos, 54, was among those named in complaints unsealed Monday in federal court in Manhattan. Authorities in Cyprus said he will remain there for one month until extradition proceedings begin.

Assistant U.S. Attorney Michael Farbiarz on Monday called the allegations against the other 10 people living in the Northeast “the tip of the iceberg” of a conspiracy of Russia’s intelligence service, the SVR, to collect inside U.S. information.

Russia is angrily denying the suspects are spies, calling the allegations “baseless and improper.” But one of the Cold War’s most famous defectors said Russia may have as many as 50 such deep cover couples spying inside the U.S.

Late Tuesday morning, President Barack Obama refused to answer any questions about the spy scandal.

Each of the 10 was charged with conspiracy to act as an agent of a foreign government without notifying the U.S. attorney general, which carries a maximum penalty of five years in prison upon conviction. Two criminal complaints outlining the charges were filed in U.S. District Court in New York.

Most of the suspects were accused of using fake names and claims of U.S. citizenship while really being Russian. It was unclear how and where they were recruited, but court papers say the operation goes back as far as the 1990s.

Russia angrily denounced the U.S. arrests as an unjustified throwback to the Cold War, and senior lawmakers said some in the U.S. government may be trying to undercut President Barack Obama’s warming relations with Moscow.

“These actions are unfounded and pursue unseemly goals,” the Russian Foreign Ministry said in a statement. “We don’t understand the reasons which prompted the U.S. Department of Justice to make a public statement in the spirit of Cold War-era spy stories.”

Intelligence on Obama’s foreign policy, particularly toward Russia, appears to have been a top priority for the Russian agents, prosecutors said.

The FBI said it intercepted a message from SVR’s headquarters, Moscow Center, to two of the 10 defendants describing their main mission as “to search and develop ties in policymaking circles in US.” Intercepted messages showed they were asked to learn about a wide range of topics, including nuclear weapons, U.S. arms control positions, Iran, White House rumors, CIA leadership turnover, the last presidential election, Congress and the political parties, prosecutors said.

The court papers allege some of the ring’s members lived as husband and wife; used invisible ink, coded radio transmissions and encrypted data; and employed Hollywood methods like swapping bags in passing at a train station.

The court papers also described a new high-tech spy-to-spy communications system used by the defendants: short-range wireless communications between laptop computers — a modern supplement for the old-style dead drop in a remote area, high-speed burst radio transmission or the hollowed-out nickels used by captured Soviet Col. Rudolf Abel in the 1950s to conceal and deliver microfilm.

Behind the scenes, they were known as “illegals” — short for illegal Russian agents — and were believed to have fake back stories known as “legends.”

In spring 2009, court documents say, conspirators Richard and Cynthia Murphy, who lived in New Jersey, were asked for information about Obama’s impending trip to Russia that summer, the U.S. negotiating position on the START arms reduction treaty, Afghanistan and the approach Washington would take in dealing with Iran’s suspect nuclear program. They also were asked to send background on U.S. officials traveling with Obama or involved in foreign policy, the documents say.

“Try to outline their views and most important Obama’s goals (sic) which he expects to achieve during summit in July and how does his team plan to do it (arguments, provisions, means of persuasion to ‘lure’ (Russia) into cooperation in US interests,” Moscow asked, according to the documents.

Moscow wanted reports that “should reflect approaches and ideas of” four unnamed sub-Cabinet U.S. foreign policy officials, they say.

One intercepted message said Cynthia Murphy “had several work-related personal meetings with” a man the court papers describe as a prominent New York-based financier active in politics.

In response, Moscow Center described the man as a very interesting target and urged the defendants to “try to build up little by little relations. … Maybe he can provide” Murphy “with remarks re US foreign policy, ‘roumors’ about White house internal ‘kitchen,’ invite her to venues (to major political party HQ in NYC, for instance. … In short, consider carefully all options in regard” to the financier.

The Murphys lived as husband and wife in suburban New Jersey, first Hoboken, then Montclair, with Richard Murphy carrying a fake birth certificate saying he was born in Philadelphia, authorities said.

The complaint says Metsos traveled to the United States to pay Richard Murphy and others using clandestine — and sometimes bizarre — methods.

Metsos was surreptitiously handed the money by a Russian official as the two swapped nearly identical orange bags while passing each other on a staircase at a commuter train station in New York, Metsos said.

After giving some of the money to one of the defendants, Metsos drove north and stopped his car near upstate Wurtsboro, N.Y. Using data from a global-positioning system that had been secretly installed in his car, agents went to the site and found a partially buried brown beer bottle. They dug down about five inches and discovered a package wrapped in duct tape, which they photographed and then reburied.

Two years later, video surveillance caught two unnamed secret agents digging up the package.

On Saturday, an undercover FBI agent in New York and another in Washington, both posing as Russian agents, met with two of the defendants, Anna Chapman at a New York restaurant and Mikhail Semenko on a Washington street corner blocks from the White House, prosecutors said. The FBI undercover agents gave each an espionage-related delivery to make. Court papers indicated Semenko made the delivery as instructed but apparently Chapman didn’t.

The timing of the arrests was notable, given the efforts by Presidents Barack Obama and Dmitry Medvedev to reset U.S.-Russia relations. The two leaders met last week at the White House after Medvedev visited high-tech firms in California’s Silicon Valley, and both attended the G-8 and G-20 meetings over the weekend in Canada.

Oleg Gordievsky, a former deputy head of the KGB in London who defected in 1985, said Medvedev would know the number of so-called illegal operatives in each country.

The 71-year-old ex-double agent told The Associated Press that, based on his experience and career in Russian intelligence, he estimates Moscow likely has about 40 to 50 couples operating under deep cover in the U.S.

Aside from the Murphys, three other defendants also appeared in federal court in Manhattan — Vicky Pelaez and Juan Lazaro, who were arrested at their Yonkers, N.Y., residence, and Chapman, arrested in Manhattan on Sunday.

Pelaez was a reporter and editor for a prominent Spanish-language newspaper videotaped by the FBI contacting a Russian official in 2000 in Latin America, prosecutors said.

The Murphys, Lazaro, Pelaez and Chapman were held without bail but didn’t enter a plea. Another hearing was set for Thursday.

Pelaez is a Peruvian-born reporter and editor and worked for several years for El Diario/La Prensa, one of the country’s best-known Spanish-language newspapers. She is best known for her opinion columns, which often criticize the U.S. government.

Two other defendants, Michael Zottoli and Patricia Mills, were arrested at their Arlington, Va., residence. Also arrested at an Arlington residence was Semenko.

Zottoli, Mills and Semenko appeared before U.S. Magistrate Theresa Buchanan on Monday in Alexandria, Va. The hearing was closed because the case had not yet been unsealed in New York. The three did not have attorneys at the hearing, U.S. attorney spokesman Peter Carr said.

Two defendants known as Donald Howard Heathfield and Tracey Lee Ann Foley were arrested at their Cambridge, Mass., residence Sunday. They appeared briefly in Boston federal court Monday. A detention hearing was set for Thursday. Lawyers could not be found or did not return calls.

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