A Russian intelligence agency was behind a false conspiracy theory that Democratic staffer Seth Rich was murdered by a hit squad linked to Hillary Clinton, it has emerged.

The SVR, Moscow's foreign intelligence service, reportedly sent out a fake bulletin in July 2016 during the presidential election campaign.

The sinister theory began to circulate on the web later the same day, an investigation by Yahoo News found, citing a U.S. prosecutor who read secret Russian intelligence memos about Rich's death.

Rich was gunned down in 2016 in what police believe was a botched robbery and the theories around his death have deeply angered the 27-year-old's family.

A Russian intelligence agency was behind a false conspiracy theory that Democratic staffer Seth Rich (left) was murdered by a hit squad linked to Hillary Clinton (right)

His mother Mary said the family had 'gone through hell' as a result of the ongoing investigations and said it was 'like losing him all over again'.

A former U.S. assistant attorney who worked on the case said authorities had to waste time investigating the baseless allegations.

'To waste your time investigating BS is just horrible,' she said.

Former Trump aide Steve Bannon is also said to have promoted the theory that Rich's death was a 'contract kill'.

The prosecutor, Deborah Sines, used her security clearance to read intercepted SVR memos about Rich, and spoke to Robert Mueller's team about the Russian-backed conspiracy theories.

'It appeared to me that it was a very clear campaign to deflect an ongoing federal criminal investigation. So then you have to look at why is Russia doing this?'

After Rich's death it was speculated that he could have been the source of leaked Democratic National Committee emails which damaged the party's presidential campaign.

One batch of emails was released by WikiLeaks on July 22, just 12 days after Rich's death in Washington.

The Russia investigation by special counsel Robert Mueller (pictured) backed up intelligence findings that Rich was not connected to the stolen DNC emails

According to the far-fetched theory, Rich was killed on the orders of Clinton campaign associates in order to silence him.

The bogus SVR bulletin even suggested he had been on his way to tell the FBI about Clinton-related corruption when he was killed.

Law enforcement has not found evidence to support any of these claims.

WikiLeaks founder Julian Assange cryptically suggested that Rich might have been linked to the DNC leaks, offering a reward for information about his death.

'Whistle blowers often take very significant efforts to bring us material and often at very significant risks,' he said.

'There's a 27-year-old who works for the DNC and who was shot in the back, murdered, just a few weeks ago, for unknown reasons as he was walking down the streets in Washington.'

When asked about his interest in the murder, Assange said: 'We're very interested in anything that might be a threat to alleged Wikileaks sources.'

WikiLeaks founder Julian Assange (pictured after his arrest in London earlier this year) fueled speculation that Rich was connected to the DNC leak

In September that year, GOP lobbyist Jack Burkman offered a $100,000 donation to the reward money to catch Rich's killer.

It was the largest ever reward to solve a murder case in DC history.

Clinton lost the election on November 8, and the following month the U.S. intelligence community said Russia had meddled in the election.

Intelligence bosses have dismissed a link between Rich and the DNC and believes that Russian hackers were responsible for the leaks.

Special counsel Robert Mueller's Russia investigation backed up those findings, saying: 'The statements about Rich implied falsely that he had been the source of the stolen DNC emails.'

The Mueller report found there was 'sweeping and systematic' Russian interference in the 2016 election.

'First, a Russian entity carried out a social media campaign that favored presidential candidate Donald J. Trump and disparaged presidential candidate Hillary Clinton,' Mueller wrote.

Former Trump aide Steve Bannon (pictured) reportedly described Rich's death as a 'contract kill'

'Second, a Russian intelligence service conducted computer-intrusion operations against entities, employees, and volunteers working on the Clinton campaign and then released stolen documents.'

According to the latest investigation, Kremlin-backed media organizations promoted the Rich-DNC conspiracy theory for more than two years after Rich's death.

Interest in the case is said to have spiked around the time that Mueller was appointed as special counsel in 2017.

The cause was also taken up by conspiracy theorists in the United States.

Jerome Corsi, an associate of Roger Stone, was among those who alleged a link between Rich and the DNC emails without providing evidence.

Earlier this year Corsi said on his website that he had relied 'upon inaccurate information' when he advanced the theory.

Corsi acknowledged that he did not have 'independent factual knowledge' for the allegation.

The article was published last March by InfoWars, where Corsi had worked as the Washington bureau chief.

Former Republican House speaker Newt Gingrich also mentioned the allegations in a TV appearance.