Russian agent posing as suburban mother used British passport to spy on U.S., claims FBI



Foreign Office investigating British passport claims

Obama refuses to answer questions on arrests

Putin says he hopes case will not damage U.S.-Russia relationship



Man believed to be 11th spy nabbed today in Cyprus - then released on bail



Accused allegedly used invisible ink and steganography



Eight of the suspects were married couples, some with children



Plot 'has been in place since the 1990s'

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One of the women accused of being a Russian spy in the U.S. travelled on a British passport, according to the FBI.

Tracey Lee Ann Foley, who was posing as a naturalised U.S. citizen born in Canada, is believed to have been given forged British documents by her Russian handlers.

She used them to travel to and from Moscow with greater ease, the FBI has claimed.

The Foreign Office said today it was investigating the claim.



If true, itwill undo some of the work that Prime Minister David Cameron did during the recent G8 and G20 summits to improve relations with Russian president Dmitry Medvedev.

The arrests are already likely to cause huge diplomatic embarrassment and chill relations between Mr Medvedv and U.S. President Barack Obama at a time when they had been thawing.

Today Mr Obama refused to answer questions over the arrests.

Meanwhile Russian premier Vladimir Putin - himself a former KGB hardman - said he hoped the case would not damage recent gains made in U.S.-Russia relations.



Foley is believed to be in her 40s and the mother of two teenage sons.

Her husband Donald Heathfield is also accused of being a Russian agent.

He was posing as a Canadian citizen, living with Foley in Cambridge, Massachusetts, where Harvard University is located.



The pair have lived in the U.S. since 1999.



Foley, Heathfield, and their nine co-accused allegedly used invisible ink, short-wave radios, steganography and wi-fi in cafés to pass coded messages back to Russia - including information on nuclear weapons.

Some of them are believed to have been operating for more than a decade.

One is a red-headed femme fatale named Anna Chapman.



Believed to be a 28-year-old divorcee with a masters' degree in economics and her own online real-estate business, she is being held without bail after prosecutors called her a 'highly trained agent' and a 'practised deceiver'.

Chapman is believed to have used her high-profile connections to pass American secrets on to a Russian government official every Wednesday since January.

On Saturday, an undercover FBI agent posing as a Russian agent met with Chapman at a restaurant in New York.

Accused: L-R, Anna Chapman, Vicky Pelaez, the defendant known as 'Richard Murphy', the defendant known as 'Cynthia Murphy', and the defendant known as 'Juan Lazaro' are seen in Manhattan federal court in New York last night

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The agent was pretending to send the alleged spy on a mission to deliver a fake passport to another female agent, according to court documents.

'Are you ready for this step?' he asked.



'S*** yes,' was her emphatic reply.

She was told that her fellow spy would greet her by asking: 'Haven't we met in California last summer?'

Chapman - who agents believe was operating under her real name - was supposed to reply: 'No, I think it was in the Hamptons.'

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The 'practised deceiver': Above left, Chapman in a photo from her Facebook page wearing her signature red dress. Above right, the accused spy in a racy pose also taken from her Facebook page



'Highly trained agent': Chapman has also posted some less racy images of herself on her Facebook page



'SHE COULDN'T HAVE BEEN A SPY - LOOK WHAT SHE DID WITH THE HYDRANGEAS'

They wanted to infiltrate the inner core of American society, so naturally they chose the place that would arose the least suspicion - the suburbs. The 11 men and women accused of spying for Russia lived apparently ordinary, mundane and even boring lives, neighbours have revealed. Rather than engage in overt espionage, they spent most of their time tending the garden and making sure their children got to football practice on time. It all helped create a veneer of respectability that would enable them to become highly 'Americanised', and carry out their secret mission without attracting suspicion. Their technique was summed up succinctly by one teenager who lived next to 'New Jersey conspirators' Richard and Cynthia Murphy: 'They couldn't have been spies. Look what she did with the hydrangeas.'

Others were stunned when FBI agents turned up on Sunday night and led them away from their Montclair home in handcuffs. One called them 'suburbia personified,' saying that they had asked people for advice about the local schools. In the Yonkers area of New York, neighbours were just as shocked when Juan Lazaro and Vicky Pelaez were carted off by police. 'It's so hard to believe - they looked like regular folks,' said neighbour Jonathan Kroll, 39, a school administrator. The situation was the same in Cambridge, Massachusetts where forty-something couple 'Donald Howard Heathfield' and 'Tracey Lee Ann Foley' were arrested, to the surprise of those who knew them. 'All I knew about them was when I saw them pull in and out of their driveway,' said Vicky Steinitz, 71. Another added: 'She was a friendly neighbour. She was gorgeous. She was nice. They were European but I didn’t know what kind.'



Once she had handed over the passport, she was to plant a stamp on a wall map to let her handlers know she had succeeded.

But the exchange never took place. The FBI court documents do not explain why.

One of her co-accused, Mikhail Semenko, was similarly set up in Washington by the FBI on the same day.

Unlike Chapman, he did follow through with his delivery.



The FBI also watched Chapman as she sat in a coffee shop in New York and used her lap top to, they claim, communicated with a Russian agent hiding in a mini-van nearby.

And she was once observed going into a Verizon mobile phone shop in Brooklyn to buy a phone using the name 'Irine Kutsov' - giving her address as '99 Fake Street'.

She intended to use the phone for her spying activities, the FBI claimed.

Chapman's lawyer Robert Baum argued that the allegations were exaggerated.



'This is not a case that raises issues of security of the United States,' he said.



The alleged spies have been charged with acting as unregistered agents of a foreign government and with money laundering.

Ten were arrested in the U.S. yesterday and charged in American courts. An 11th man had been on the run - but was arrested by police in Cyprus this morning.

However he was released on bail. Police have not yet explained why.



Among the accused were four couples, including Foley and Heathfield, living quietly in the suburbs of New York and Washington and Boston.

They are believed to have married as part of their cover.



One of the married women, believed to be working under her real name, is Vicky Pelaez, a Peruvian born reporter and editor.

She 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.

'You were sent to USA for long-term service trip. Your education, bank accounts, car, house etc - all these serve one goal: fulfil your main mission, ie to search and develop ties in policy-making circles in US and send intels (intelligence reports) to C (Moscow Center).'

- The accused spies 'mission statement', as outlined in a message to 'Richard and Cynthia Murphy' from Moscow Center, intercepted and decoded by the FBI



Her son, Waldo Mariscal, told the court that his mother was innocent.



'This is a farce,' he said. 'We don't know the other people.'



In January 2000, Pelaez was videotaped meeting with a Russian government official at a public park in Peru, where she received a bag from the official, according to one complaint.

Pelaez and her husband Juan Lazaro discussed plans to pass covert messages with invisible ink to Russian officials during another trip Pelaez took to South America, the court documents also claim.

The FBI said it intercepted a message from Moscow Center, headquarters of Russia's intelligence service, the SVR, to some of the defendants describing their main mission as 'to search and develop ties in policy-making circles in U.S.'

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 rumours, CIA leadership turnover, the last presidential election, Congress and the political parties.

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FROM INVISIBLE INK TO COVERT WI-FI COMMUNICATION: WHAT THE RUSSIAN 'SPIES' ARE ACCUSED OF

According to the complaint, filed by Maria Ricci, a special agent with the Counterintelligence arm of the FBI, the spies: used advanced steganography software to send encrypted messages to each other by hiding them on publicly available websites.

used short wave radios and codes to send messages to each other

used wi-fi in cafes and bookshops to covertly communicate with Russian agents parked in a van close by

used and perfected the 'brush pass', a clandestine way of handing over items as one person passes another, which is known as a 'flash meeting'

hoarded up to £50,000 in cash in their homes

wrote messages in invisible ink that they sent to Russian agents in South America

met an employee of the U.S. government with regards to nuclear weapons research and other high-ranking officials

tried to get jobs in firms which gave them access to those who knew state secrets

buried information in the ground which could later be picked up by other agents

received money from an official associated with the Manhattan-based Permanent Mission to the United States

used false documents to travel into and out of the United States and

took the identities of dead Americans to help them carry out their mission.

The agents are also said to have been schooled in Morse Code and how to cover their tracks so they left no evidence. Each of the ten 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. Nine of the defendants were charged with conspiracy to commit money laundering, which carries a maximum 20 years in prison. Two criminal complaints outlining the charges were filed in U.S. District Court for the southern district of New York.



Court papers also described a new high-tech spy-to-spy communications system used by the defendants: short-range wireless communications between laptop computers.

Working on laptops from free public wi-fi, the spies carried out the modern supplement for the old-style dead drop in a remote area, or high-speed burst radio transmission or the hollowed-out nickels used by Cold War-era Russian spies to conceal and deliver microfilm.

But, despite the new technology, there was no lack of Cold War spycraft.

According to the court papers, the alleged agents used invisible ink, stayed in touch with Moscow Center through coded bursts of data sent by a radio transmitter, used innocent-looking 'brush' encounters to pass messages in public, hid encrypted data in public images and relied on fake identities and false travel documents.

The arrests are already likely to cause huge diplomatic embarrassment and chill relations between Mr Medvedv and U.S. President Barack Obama at a time when they had been thawing.

The two leaders met last week at the White House, and also both attended the G8 and G20 meetings over the weekend in Canada.

Russia's embassy said it was unaware of the arrests and is seeking more information. The Russian Foreign Minister Sergey Lavrov has said he will seek an explanation from the U.S. on the allegations.

'They haven't explained to us what this is about,' Lavrov said at a news conference during a visit to Jerusalem today.



'I hope they will.



'The only thing I can say today is that the moment for doing that has been chosen with special elegance.'



Many Americans have refused to believe that Russia has changed from the lawless days when the country was run by Russia's spying agency, the KGB.

Their fears have been compounded because former President and now Prime Minister Vladimir Putin, a former First Chief Directorate of the KGB, still effectively controls the country, despite stepping down from power in 2008.

Intelligence on Mr Obama's foreign policy, particularly toward Russia, appears to have been a top priority by the alleged spy ring.

The plot appears to have been going on since some point in the 1990s.

Most of those arrested had been living under assumed names, according to the U.S. Department of Justice.



The defendants appeared in court last night.



Should they be convicted of being an agent of a foreign government, they face up to five years in jail, and up to 20 for the money laundering.



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The spies' mission was spelled out in one communication sent to two of the defendants: 'Your education, bank accounts, car, house etc. - all these serve one goal: fullfil your main mission, i.e to search and develop ties in policymaking circles in US and send intels' to the Moscow Centre', the Kremlin's spy HQ.

Anna Chapman was of particular interest - and not just for her reputation as a beauty.

OLD HABITS DIE HARD: HOW AMERICA NEVER BELIEVED RUSSIA HAD STOPPED SPYING

The astonishing plot and arrests could rival the FBI's famous capture of Soviet Col. Rudolf Abel in 1957 in New York. Also a deep cover agent, Abel was ultimately swapped to the Soviet Union for downed U-2 spy pilot Francis Gary Powers in 1962. That was during the Cold War - and since then relations have improved. Dmitry Medvedev and Barack Obama shared a cordial visit just last week - even stopping off for a hamburger during an unannounced visit to a diner. Yet neither side has dropped its guard completely. According to Washington officials, Russia's covert foreign intelligence operations against America have reached Cold War levels under the watch of Mr Putin, below. White House advisers believe that there is no other nation on Earth that is so determined to get intelligence on the U.S., with the possible exception of China. Defence officials are particularly concerned by the SVR, the latest incarnation of the KGB's intelligence arm, which has a network of undercover agents in America. Targets include research projects and military equipment in development .

The activities of the SVR are rarely put in the spotlight, but in 2007 a Russian man who posing as a Canadian citizen was caught and deported. The alleged SVR agent had been living under the name Paul William Hampel and claimed to be a lifeguard and travel consultant, but was thought to be attempting to get information on the aerospace industry in Montreal. He was held carrying a fake birth certificate, £3,000 in five currencies and several encrypted pre-paid mobile phone cards. The two most prominent cases involving the SVR in the past decade may have been those of Robert Hanssen, right, the FBI counter-intelligence agent who was convicted of passing along secrets to the agency, and Sergei Tretyakov, deputy head of intelligence at Russia's U.N. mission in 1995-2000. Tretyakov, who defected in 2000, claimed in a 2008 book that his agents helped the Russian government steal nearly $500 million from the U.N.'s oil-for-food program in Iraq before the fall of Saddam Hussein.

He said he oversaw an operation that helped Saddam's regime manipulate the price of Iraqi oil sold under the program and allowed Russia to skim profits. One of the Cold War's most famous defectors says Russia may have as many as 50 deep-cover couples spying inside the United States. Oleg Gordievsky, an ex-deputy head of the KGB in London who defected in 1985, said Mr Medvedev would be aware of the precise numbers of so-called illegal operatives in each target country. The 71-year-old ex-double agent said Medvedev would know numbers but not necessarily their names. He also claimed the undercover operatives were often too timid to recruit high-ranking agents.



She is believed to have entered the Russian Mission to the United Nations on ten occasions and sent messages to agents via a private wi-fi network.



On other occasions she would sit outside a coffee shop or go inside a book store whilst a van with a Russian agent in it parked up nearby, allowing them to share the same wi-fi.



In a series of 'info tasks', Russia is said to have given the spies assignments.

In one for May and June, they had to 'gather information with regard to the use of the Internet by terrorists, United States policies in Central Asia and Western estimation of Russian foreign policy'.

In spring 2009, the documents say, alleged conspirators, Richard and Cynthia Murphy, who lived in New Jersey, were asked for information about Mr Obama's impending trip to Russia that summer.

They were also asked for the U.S. negotiating position on the START nuclear arms reduction treaty as well as Afghanistan and the approach Washington would take in dealing with Iran's suspect nuclear program.

They were also asked to send background on U.S. officials travelling with Mr Obama or involved in foreign policy.

'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 U.S. interests,' Moscow asked.

Moscow wanted reports 'which should reflect approaches and ideas of' four sub-Cabinet U.S. foreign policy officials.

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 papers allege the defendants' spying has been going on for years.

One defendant in Massachusetts made contact in 2004 with an unidentified man who worked at a U.S. government research facility.

'He works on issues of strategic planning related to nuclear weapon development,' the defendant's intelligence report said.

The defendant 'had conversations with him about research programs on small yield high penetration nuclear warheads recently authorized by U.S. Congress (nuclear 'bunker-buster' warheads),' according to the report.

One message back to Moscow from the defendants focused on turnover at the top level of the CIA and the 2008 U.S. presidential election.



The information was described as having been received in private conversation with, among others, a former legislative counsel for Congress.



The court papers deleted the name of the counsel.

In the papers, FBI agents said the defendants communicated with alleged Russian agents using mobile wireless transmissions between laptop computers - a new spying method.



They established a short-range wireless network between laptop computers of the agents and sent encrypted messages between the computers while they were close to each other.

The femme fatale, the stay-at-home dad, the top newspaper columnist: Who are the bumbling Russian 'spies'?



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Anna Chapman, 28:



Believed to be using her real name. A beautiful divorcee with a masters' in economics and an online real estate firm who attended high society New York parties, according to reports.



She lived in an apartment in a wealthy area of Manhattan.



She met regularly with Russian officials. FBI agents tried to use that to their advantage by setting up a sting with an agent posing as a Russian handler.

Chapman met with the handler on Saturday - but never followed through on the task given to her. She was arrested in Manhattan.



Mikhail Semenko

Believed to be his real name. Like Chapman, fooled into meeting FBI agents posing as Russian handlers. Unlike Chapman, he actually carried the 'mission' given to him by the FBI agents out.



He was described by friends as being a Mercedes driver in his late-20s who was often heard speaking in Russian to his girlfriend.



He was arrested in Arlington.



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Christopher R Metsos, 55:



Arrested in Cyprus this morning attempting to board a flight to Budapest.

Bizarrely, he was then bailed pending an extradition hearing in 30 days. It is highly unusual for Cyprus courts to issue bail for foreign nationals pending extradition.



Not believed to be using his real name. FBI court documents said said Metsos was posing as a Canadian citizen - allowing him to travel freely to New York to meet at least one of the other defendants on numerous occasions.

Metsos has been accused of receiving and making payments to the other members of the group, including getting payments during a brush-pass with a Russian government official who was affiliated with the Russian mission to the United Nations in New York.

The U.S. embassy in Nicosia said it was not aware of the arrest.

Documents Cypriot authorities submitted to court said the Interpol red alert for Metsos was issued on June 26. It said he was thought to have laundered some $40,000.

'He has to appear at a police station once a day and has handed in his travel documents to police,' a police statement said.

Metsos had arrived in Cyprus on June 17 and had been staying alone at a hotel in Larnaca, on the east Mediterranean island's southern coast. His extradition hearing will start on July 29.



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'The New Jersey Conspirators': Richard and Cynthia Murphy

The pair - believed to have married as part of their cover - have lived in the U.S. since the mid-1990s.



Richard Murphy is posing as a U.S. citizen born in Philadelphia, Pennsylvania. He is believed to have travelled on a forged Irish passport.

His wife Cynthia is also posing as an American born as Cynthia Hopkins in New York City.



The couple lived in Hoboken, New Jersey. Since 2008 they have lived in a house in Montclair, New Jersey.

They are believed to have children. A neighbour, Louise Shallcross, 44, said she often saw Richard Murphy at the school bus stop.

'We were all very excited to have a stay-at-home dad move in,' she said.

Another neighbour told the New York Times: 'T hey couldn’t have been spies. Look what she did with the hydrangeas.'

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'The Boston Conspirators': Donald Howard Heathfield and Tracey Lee Ann Foley

Donald Heathfield, posing as a Canadian citizen, is married to Tracey Lee Ann Foley, posing as a naturalised U.S. citizen born in Canada.

Tracy Lee Ann Foley is believed to have used a British passport for trips back and forth from Moscow.

The pair, believed to be in their 40s and with two teenage sons, have lived in the U.S. since 1999. Court documents said that until this month they had lived long-term in a Boston townhouse. Now they live near Boston, in the town of Cambridge, Massachusetts.



'The Yonkers Conspirators': Juan Lazaro and Vicky Pelaez

Vicky Pelaez - believed to be her real name - is a United States citizen born in Peru. She is a reporter and editor.

She 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.

She has a son, Waldo Mariscal.

She is married to Juan Lazaro, posing as a citizen of Peru born in Uruguay.



The couple have each lived in the U.S. for over 20 years.



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'The Seattle Conspirators': Michael Zottoli and Patricia Mills

Michael Zottoli is posing as a U.S. citizen born in Yonkers, New York.

He is married to Patricia Mills, who was posing as a Canadian citizen.



The couple have lived together over the years in a number of locations, including an apartment in Seattle, Washington.



In October, 2009, they moved to Arlington, Virginia.

Zottoli has lived in the U.S. since 2001, and Mills since 2003.



In Arlington, where Zottoli and Mills lived in a ninth-floor apartment, next-door neighbor Celest Allred said her guess had been that 'they were Russian, because they had Russian accents'.

They were arrested at home.



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