A Moscow spy worked for two decades under cover in Europe by building a fake biography. There are others.

By Pierre Briançon in Madrid | Illustrations by Luke Waller for POLITICO

ne June night in 2010, Henry Frith asked the son of his live-in partner for a lift to Madrid airport early the next morning.

Frith didn’t say where he was flying to. He rarely did when Alejandro Valdezate Sánchez regularly drove him to Madrid Barajas international airport for one of his many business trips.

The next day, agents from the Centro Nacional de Inteligencia, the Spanish security service, came to Valdezate’s home to interview him. The conversation was calm and courteous, but one thing soon became clear to Valdezate: Frith wouldn’t be coming back. He never did.

A stocky, 50-something man with a bushy moustache, Frith had for almost two decades led a seemingly normal madrileño life. He ran Frimor Consultores, which presented itself as a “high value, reliable consultancy and business services company” specialized in “socio-economic studies.” Frith traveled frequently for business, mostly to Central Europe, sometimes as far away as Chile.

He had friends and liked a drink. Frith spoke Spanish with a slight accent, which he attributed to his mixed upbringing, having been born in Ecuador to an Ecuadorian mother and a father from New Zealand.

So he said.

According to Western intelligence sources, the industrious life of a busy, frequent-flying Spanish consultant was a front.

Frith, they say, was born Sergey Yuryevich Cherepanov in Russia in 1955 — two years before his alleged birth in Ecuador. Back in Moscow, Cherepanov had a wife, Olga Konstantinova Cherepanova, and a son, Andrei. During all the years he spent in Spain, he served as an officer in the SVR, the Russian foreign security services.

“Henry Frith,” these sources allege, was an alias for a Russian spy, a so-called “illegal” who lived for years under a carefully constructed “legend” — a false identity, complete with a fake history and background. He is the first “illegal” to have been uncovered and publicly named in Europe since the end of the Cold War.

There are, they say, others like him on the Continent.

This story is based on interviews with European intelligence sources — including those directly involved in the case — documents and photographs reviewed by POLITICO, as well as people who knew Frith/Cherepanov in Madrid.

As relations between Moscow and the West have gone from guarded cooperation to hostile defiance under Russian President Vladimir Putin, a former KGB head, the scope of intelligence activities, and the number of Russian spies operating in Europe, has “roughly doubled,” according to the former head of a major European power’s intelligence service, who added that in such matters, “estimates are by definition difficult.” The spy chief, who was still on active duty back in 2010, said he hadn’t heard of the Frith/Cherepanov case.

“The Russians are engaging in massive and voracious intelligence-gathering campaigns, fueled by still-substantial budgets and a Kremlin culture that sees deceit and secret agendas even where none exist,” wrote Mark Galeotti, an expert on Russian security affairs in a recent report on “Putin’s Hydra” for the European Council on Foreign Relations.

Six years after a group of 10 Russian “illegals” was uncovered in the United States, the decision by European security services to publicize the Frith/Cherepanov case is motivated by a desire to draw attention to what an official calls the “dramatic increase” in the Kremlin’s espionage activities here. Western intelligence services are also concerned that one or more “illegals” could, unbeknownst to them, build a career inside government or international institutions.

Home to the EU and NATO, Brussels has built a reputation in recent years as a den of spies. “Illegals” are significantly harder for counterintelligence agencies to uncover and track. Showing that counterespionage services are aware of their activities, these sources say, might induce some to become double agents or give themselves up.

THE MADRID DECADES

‘I was surprised how often he traveled abroad’

lejandro Valdezate Sánchez, a computer engineer in Madrid, never wanted to talk. When first contacted a few weeks ago by email to discuss Frith’s disappearance, he replied that he “couldn’t help” and “had nothing to say” on the matter. Tracked down one recent morning at his office, he reluctantly agreed to come downstairs for a quick chat outside, near the security post of the technology company he works at in Madrid.

A short, squat man around 40, Valdezate was visibly emotional, saying that Frith’s disappearance was personally distressing. His mother, Carmen, who had been sick with cancer for some years, died a few months after Frith’s disappearance. On the June day he flew out for good, Frith was supposed to take her to one of her regular appointments with the doctor. Even after his meeting with the Spanish security services, Valdezate said that he only accepted that Frith wasn’t coming back when he didn’t show up for Carmen’s funeral.

Valdezate said he’d spent a lot of time scouring the internet for his mother’s companion, “Henry Frith.” In vain. “Do you know what happened to him?” he asked me. Told that “Frith” had allegedly been a Russian spy who used the name Cherepanov, he didn’t look surprised. In the last six years, he said, he has had time to consider many possible stories about the man he still calls Henry. Whatever that man did, Valdezate said, he wants to remember the person who had been a caring companion for his mother throughout her ordeal, and he won’t say a bad word about him.

In retrospect, Valdezate added, he realized that Frith may have had another job than the one at Frimor — but he said he didn’t suspect anything more.

A few months before, Carlos Moreno Rodriguez, who was Frith’s friend and business partner, sounded still mystified by the disappearance. Over coffee at a Madrid Starbucks, he recognized the man shown to him in a photograph. “Yes, this is Henry! A bit chubbier,” he exclaimed.

Like Valdezate, Moreno said he has spent the intervening years mulling what might have happened to Frith, including dark scenarios about his past and disappearance. During the conversation he mentioned that his wife, worried about the story’s too-many mysteries, had advised him not to come and meet me. Curiosity, he said, had driven him to accept a meeting.

Moreno said he met Frith in the mid-1990s through a common friend. Frith’s work permit had expired. At the time, Moreno had a small business advising companies on how to obtain state subsidies for training programs. He agreed to help set up a legal entity that would allow Frith to remain in Spain with a work permit. Frimor Consultores — the name combines the first syllables of both men’s surnames — was born. From the go, said Moreno, it was understood that Frith would be the operational head of the venture.

“Our business is based on a simple structure but with the necessary background to allow us to deal with any type of plan,” the firm’s website proclaimed.

Moreno said he himself did little work at Frimor. Even though he was one of Frimor’s nominal partners, he sounded at pains to describe what business Frimor was in. “I was surprised how often [Frith] traveled abroad for business,” he said. Another source of puzzlement was how little revenue Frimor pulled in. Frith even had to put his own money into the business at times, withdrawing cash from a safe he kept in a branch of Santander, the big Spanish bank, Moreno said.

On occasion Frith asked Moreno to help out, for example to do some bits of accounting, he said. Once, his partner asked him to find analyst or brokers’ reports on gas pipelines in Eastern Europe. “I had access to them, so I fetched notes from the likes of Deutsche Bank,” he said. At that time, the EU was pushing the now-defunct Nabucco pipeline project that would have linked Turkey to Austria, which was a competitor for Russia’s gas giant Gazprom and a source of tension between the West and Moscow.

The Madrid commercial registry keeps a trace of Frimor, which has been “provisionally” closed for not registering its accounts in the years following Frith’s disappearance. No one has taken the legal steps to dissolve it. The founding act is available, registered on November 2, 1995, mentioning Carlos Moreno and Henry Frith, “born November 9, 1957 … of New Zealand nationality, holder of work permit X-0671724-D, valid until September 6, 1995, renewal being solicited at the Provincial Department of Labour.”

A FAILED APPROACH

‘Your whole life is going to be in ruins’

n the early summer days of 2010, the Frith legend unraveled.

On June 27, the U.S. Federal Bureau of Investigation arrested 10 suspected Russian agents in Boston, New York and Washington. The group was accused of working as an illegal spy ring for the SVR, Russia’s foreign intelligence services, which emerged out of the Soviet-era KGB after the collapse of the USSR in 1991. Members of the group soon called the “FBI 10” had long posed as Americans, building up fake identities and contacts in the U.S. since the mid-1990s.

On the evening of the next day, near Frith’s home in Madrid, a British intelligence agent approached him. After greetings, the conversation took place in English.

“Have you got just a few minutes to chat with me?” the agent asked, according to a transcript of their recorded conversation provided by a European intelligence service. (Its accuracy couldn’t be independently verified.)

“I’m sorry…,” Frith replied.

“I think it’s very important that you do,” the agent continued. “I have here in my hand your life.… And we must talk … because you are in a very difficult situation. If we do not talk now then I’m afraid there’s going to be a big problem for you here in Spain…. I work for Western special services, and you work for the Russian special services. I know this is a shock and I’m sorry that I have to do this on the street but it was the only way I could get to talk to you securely.”

Cherepanov denied everything. “You’re wrong” and “no” are his repeated replies to the agent’s statements and queries.

The agent asked for a quiet 20-minute talk. Cherepanov declined.

Then the agent threw everything on the table. He tried to “turn” his target and make him a double agent: “I have the opportunity here to make your life a lot, lot better.”

Time and again, the other man insisted he was really Henry Frith.

The agent threatened: “The Spanish authorities are going to come, the police are going to come, there’s going to be a big scandal and your whole life is going to be in ruins.”

The next morning, Valdezate took Frith to the airport.

THE AMERICANS CONNECTION

Deconstructing Lawrence Henry Frith

uropean intelligence sources say Cherapanov was caught thanks to the same intelligence that led the FBI to the 10 illegals in the U.S. In June 2011, a former SVR official, Colonel Alexandr Poteyev, was found guilty of high treason and desertion by a Russian military court, and sentenced to 25 years in prison in absentia. He was presented by Russian media as the Americans’ mole in Moscow.

A deputy head of the SVR’s “S” department that oversees deep cover operations, Poteyev, fearing that he had been uncovered by Russian counter-intelligence, had fled to the U.S. shortly before the FBI sprang into action. “Mary, try to take this calmly: I am leaving not for a short time but forever.… I am starting a new life. I shall try to help the children,” he texted his wife.

Some of the FBI 10 such as “Donald Heathfield” and “Tracey Foley,” posing as a couple of Canadian origin with two children, had been under surveillance for many years before they were arrested under their real names of Andrei Bezrukov and Elena Vavilova. Their arrest, a Western source said, may have been precipitated by Poteyev’s flight to the U.S.

Similarly, the European source aware of the Spanish case said that Frith had been under watch for “well over a year.” That gave time to counterespionage services to deconstruct Frith’s identity. The only trace of a “Lawrence Henry Frith” in New Zealand’s records is of a boy who died in 1937 in Hamilton, Waikato, New Zealand – aged one. The Frith name may simply have been chosen in the cemetery by a Russian embassy employee in New Zealand, said the European source.

Cherepanov, said a member of the intelligence service involved in the operation, had a system that allowed him to communicate directly with Moscow — through which he received instructions on when and where to meet Russian agents in a third country, usually close to Spain. He wrote reports to Moscow on a specially-encrypted laptop, and copied them on a secure USB key that he deposited in what the services call “dead letter boxes” in Spain.

The USB key was then discreetly retrieved by a Russian diplomat stationed in Madrid. In one instance, pictures made available by a Western intelligence service purportedly show a diplomat pretend to urinate on the side of a secluded road, look around and retrieve the document from under a rock at the drop site.

Counterintelligence services don’t readily talk about the damages spies have done to national security. The FBI 10 were first said to have built up sources and exchanged information on encrypted laptops and secured USB keys. When the case came to trial, within days of the arrests, the only thing that U.S. authorities alleged in court was that they were guilty of money laundering and of conspiracy to act as unregistered agents of a foreign government.

No allegations that they accessed classified information were ever made. According to a European intelligence official who wasn’t involved in the Cherepanov case, even if they had stolen secrets or harmed security, “sometimes you just want to get rid of them and trade them against other assets. You rarely jail foreign agents caught in the act. They’re not traitors, after all.”

JUST FIT IN

‘Mostly they are used as messengers’

spects of the Cherepanov story remain unexplained, particularly the extent of any harm he possibly did to Western security by courting government sources in countries such as Croatia, which joined NATO in 2009. Frith probably stayed under the radar of Spanish counterintelligence for so long because he avoided direct contact with Russian agents on Spanish soil, an intelligence source said.

In most cases, illegals are used as couriers. They don’t behave like the spies portrayed in the current hit television series “The Americans” that was inspired by the FBI 10 case. The Jennings couple in the show leads a perfect Washington suburban life with their two children in the early 1980s, but are highly trained KGB operatives who run agents, kill and occasionally sleep with the enemy. But real-life illegals don’t lead such a James Bond-type of life. Their mission is to blend in.

“Usually,” said one agent with a detailed knowledge of the case, “those spies serve two purposes. They may sometimes manage their own sources and agents, but mostly they are used as messengers for the SVR because the ‘official’ spies are under a surveillance that prevents them to move around much.” Official spies work out of embassies, operating largely in the open under cover of diplomatic immunity.

On rare cases an illegal integrates so well that he can climb up the ladder in business or political circles of the new home country. He then becomes invaluable to his or her employer. The most spectacular post-war example was Günther Guillaume, the East German mole sent to West Germany in 1956, who rose to become the secretary of Chancellor Willy Brandt — and caused the latter’s downfall when he was finally unmasked in 1974.

Cherepanov vanished after his emergency exfiltration, disappearing from the radars of Western intelligence services, who believe he went back to Russia by one of the pre-planned exit routes often prepared for illegals in case they need to flee in a hurry. On his return, he didn’t get the public congratulations that President Putin extended to the FBI 10.

The former head of a European counterintelligence service explained why counterintelligence services seldom publicize the cases of illegals they unmask. “Once you get one of these guys, there are basically three scenarios. The first one is that you let him go on, keep watching him and feed him crappy stuff that he will take back to Moscow. The second is that you turn him around and he starts working for you. The third scenario is when he refuses to work for you. Then either he flees, or you send him back, but in this latter case you don’t make a big fuss out of it. Security services don’t like to wage open war with each other, and you don’t want the Russians to retaliate by, for example, kicking out some of your own official spooks or diplomats in Moscow.”Sometimes the crash attempt at recruitment doesn’t work. “Such moves usually rely on a double leverage: comfort and fear,” another source said. “You choose the targets because they’re well integrated in the country they’ve lived in for many years.” That was the case of Frith, who had a partner, friends and a settled life which he seemed to cherish. The source added: “You also point out to them that they are finished, and that their prospects back in Moscow are dire. They will be suspected of being a double agent in any case, their passport will be taken away, and at best they will be considered a professional failure.”

Sources note another factor may have played a role in the decision not to go public with the Frith case in 2010: possible embarrassment to the Spanish intelligence service CNI, which learned about the case after a tip from their British counterparts. Reached through a Spanish diplomat, the CNI declined to comment.

It’s not clear why Frith wasn’t detained at the airport the day after the failed attempt to turn him, but a Western intelligence source points out that “the precise facts to legally charge him in court may have been lacking” at the time, absent a confession. The explanation falls a bit short: Nothing prevented security services from at least detaining and interrogating the suspect.

After Cherapanov disappeared, two Russian diplomats based in Madrid, Anton Olegovich Simbirsky, and Aleksandr Nikolayevich Samoshkin, were asked to leave Spain for their alleged involvement in running the Spanish mole, the European sources said.

Attempts to locate Cherepanov in Russia were unsuccessful.

A Russian diplomat in Madrid declined to comment for this story and the Russian government, reached through the embassy, didn’t reply to a set of emailed questions.

THE NEW SPYING GAME

‘I’d say there are less than 15, more than 10’

gents tasked with fighting Russian spying in Europe these days say they are concerned that the focus on anti-terrorism starves them of resources to contain the SVR’s offensive.

Russia, they say, is eagerly searching for information on what goes on in NATO, as it is testing the Atlantic Alliance’s will to defend newest members such as the Baltic states. It also wants to keep on top of the European Union mood on topics such as economic sanctions, the antitrust probe launched against Gazprom, or even multilateral topics such as the state of discussions about the EU-U.S. free-trade agreement (TTIP). And with the deterioration of its relations with the West, Moscow has been deprived of a trove of information it could previously obtain through regular channels.

Brussels “is like a big Gruyère cheese, and is leaking all over the place,” said a Western intelligence source. “You have the Commission, NATO, and Russians basically want to know what’s going on.”

“A few years ago we had a NATO-Russia council that was working, and some information was freely exchanged,” noted another European diplomat. The council, established in 2002, has been virtually mothballed since Putin annexed Crimea. “So some type of information that the Russians did once get normally, they’re now trying to get by other means,” he said.

NATO last year moved to cap “partner nations” delegations to its headquarters in Brussels to 30 members. Russia had more than 50, some of which were suspected of spying by the Alliance’s Civilian Intelligence Committee.

An added complication, according to the European diplomat, is that “some EU countries still have some difficulty considering that Russia is indeed a threat. I don’t think the Italian government, to name one, agrees that it should be treated as such, and that is also the case of many politicians in many EU countries.”

According to another source, a couple of cases of Russian illegals have been uncovered since Frith’s abrupt departure for Moscow nearly six years ago. As for those still at work in Europe, posing as French, Brits, Germans or Italians, “I’d say there are less than 15, and more than 10. The real answer, of course, is that we don’t know.”

Back in Madrid, the concierge at number 47 Calle Goya that used to house Frimor Consultores doesn’t remember anyone working there under that name, nor people associated with the business. Mail that was still coming a few years ago, he said, had to be sent back. Other tenants have no recollection of Frimor, but there has been much turnover in the nondescript office building over the years.

As for Moreno, he told me that his own consulting business, which he had operated independently from Frimor, started losing his public-sector customers soon after Frith/Cherepanov’s disappearance. Then, he said, he was kicked out without explanation from the board of the association of Spanish exporters. To this day, Moreno said he’s in the dark about the reasons for his sudden ostracism. According to a source, Spanish authorities may have exerted discreet pressure on Moreno’s associates, unsure whether he knew what his partner did in reality. As he was leaving the Starbucks, Moreno, who wasn’t told “Henry” was a suspected Russian spy in his meeting with me, said he kept thinking about what happened to his former friend. “I have sometimes wondered,” he says, “whether there wasn’t some Tom Clancy aspect to this whole story.”

Diego Torres contributed to this article.