NEW YORK — The accused money man for a Russian spy ring whose members were assigned a decade or more ago to infiltrate American society was captured overseas, authorities said Tuesday. He was the last of 11 arrests made over three days in one of the largest such busts in recent years.
Russian officials denounced the arrests as “Cold War-era spy stories,” but officials there and at the White House insisted that they would do little or nothing to hamper recently mending relations between the two nations.
The FBI moved ahead on the bust because one of the suspects was scheduled to leave the country, the Justice Department said.
The last suspect, using the name Christopher Metsos and claiming 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 bond.
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.
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.
Intelligence on President Barack Obama’s foreign policy, particularly toward Russia, appears to have been their top priority, according to prosecutors, who charged each of the 10 arrested in the U.S. with conspiracy to act as an agent of a foreign government without notifying the U.S. attorney general.
The 38-year-old son of one of the arrested couples, Vicky Pelaez and Juan Lazaro, said Tuesday outside their home in Yonkers, N.Y., that he didn’t believe the allegations.
“This looks like an Alfred Hitchcock movie with all this stuff from the 1960s. This is preposterous,” Waldomar Mariscal said. Of the charges, he said, “They’re all inflated little pieces in the mosaic of unbelievable things.”
Russia’s Foreign Ministry acknowledged Tuesday that those arrested included Russian citizens but insisted that they did nothing to hurt U.S. interests.
“These actions are unfounded and pursue unseemly goals,” the 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.”
The arrests follow efforts by Obama and Russian President 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.
A member of the Russian Parliament had suggested that elements of the U.S. government opposed to the recent thaw in relations were responsible for the timing of the arrests.
But Justice spokesman Dean Boyd noted several critical law enforcement and operational reasons for the timing of the arrests, including one suspect’s plans to leave the country.
Court documents indicate that the FBI believed that defendant Anna Chapman, arrested Sunday in Manhattan, was about to go to Moscow, but it was not clear that her impending departure was the one that triggered the arrests.
‘TIP OF THE ICEBERG’
Prime Minister Vladimir Putin mentioned the arrests during a meeting at his home with former President Bill Clinton, who was in Moscow to speak at a conference.
“I understand that back home police are putting people in prison,” Putin said. “That’s their job. I’m counting on the fact that the positive trend seen in the relationship will not be harmed by these events.”
White House spokesman Robert Gibbs sounded a similar note, saying relations wouldn’t take a hit. Obama, who wouldn’t comment earlier when questioned by reporters, was “fully and appropriately” informed, Gibbs said.
Assistant U.S. Attorney Michael Farbiarz on Monday called the allegations against the 10 suspects arrested in the U.S. “the tip of the iceberg” of a conspiracy of Russia’s intelligence service, the SVR, to collect inside U.S. information.
Their charge 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.
The FBI said it had 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 that some of the ring’s members lived as husband and wife; used invisible ink, coded radio transmissions and encrypted data; and employed methods such as swapping bags in passing at a train station.
Aside from Richard and Cynthia Murphy, three other defendants also appeared in federal court in Manhattan - Pelaez and Lazaro, who were arrested at their Yonkers residence, and Chapman.
Pelaez was a reporter and editor for a prominent Spanish-language newspaper who was 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 pleas. Another hearing was set for Thursday.
Two other defendants, Michael Zottoli and Patricia Mills, were arrested at their Arlington, Va., residence. Also arrested at an Arlington residence was Mikhail 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, Donald Howard Heathfield and Tracey Lee Ann Foley, were arrested at their Cambridge, Mass., residence Sunday and appeared briefly in Boston federal court Monday. A detention hearing was set for Thursday. Lawyers could not be found or did not return calls.
Three of the suspects had day jobs that may have put them in contact with opinion makers, corporate executives, or aspiring technology industry workers.
Heathfield lived in a Cambridge apartment where he ran a management consulting company called Future Map.It claimed to have offices in Paris and Singapore, according to public databases and Future Map’s website. Pelaez wrote columns for El Diario La Prensa, the oldest Spanish-language newspaper in New York. Chapman posted an online ad seeking “bright graduates” for an Internet startup.
CLINTON ALLY A TARGET?
Richard and Cynthia Murphy raised two children in a colonial house with maroon shutters on a winding street in suburban New Jersey. Cynthia, a vice president at a financial-services firm, tended hydrangeas out front. Katie, 11, and Lisa, 7, rode pink bicycles around a nearby cul de-sac.
Neighbors noticed that Cynthia had a slight accent - Scandinavian, she told them.
It seemed like a model upper-middle-class life. But according to federal prosecutors, the house on Marquette Road was owned by the Moscow Center.
“It’s just staggering,” said venture capitalist Alan Patricof, who suspects he is the unnamed businessman described by authorities as having been targeted by Cynthia Murphy.
“It’s off the charts.”
Patricof, a longtime confidant of Bill and Hillary Rodham Clinton, knew Murphy through the Manhattan firm Morea Financial Services, a tax service where she worked and he was a client. Although he said they discussed only business, intercepted communications from the suspect’s superiors mentioned a “New York-based financier” as a possible source of information about U.S. foreign policy and White House intelligence, according to the criminal complaint in the case.
Information for this article was contributed by Tom Hays, Menelaos Hadjicostis, Pete Yost, Robert Burns, Matt Lee, Jim Heintz, Lynn Berry, Vladimir Isachenkov, Claudia Torrens, Jim Fitzgerald, Nafeesa Syeed, Samantha Henry, Russell Contreras, Bob Salsberg and Rodrique Ngowi of The Associated Press; by David Glovin, David Voreacos, Bob Van Voris, Patricia Hurtado and Heather Smith of Bloomberg News; and by Jerry Markon, Philip Rucker, Paul Schwartzman, Maria Glod, Jason Horowitz, Julie Tate and Meg Smith of The Washington Post.
Front Section, Pages 1 on 06/30/2010