Prosecutors cited several reasons for the shift and were clearly defensive that Russia would portray the decision as proof that U.S. evidence of the alleged Russian tampering is weak.

"There is a substantial federal interest in defending American democratic institutions, exposing those who endeavor to criminally interfere with them, and holding them accountable, which is why this prosecution was properly commenced in the first place," Assistant Attorney General for National Security John Demers and U.S. Attorney for Washington Timothy Shea wrote.

"In light of the defendant’s conduct, however, its ephemeral presence and immunity to just punishment, the risk of exposure of law enforcement’s tools and techniques, and the post-indictment change in the proof available at trial, the balance of equities has shifted. It is no longer in the best interests of justice or the country’s national security to continue this prosecution," Demers and Shea added.

They said the indictment would remain in place against Prigozhin and 12 other Russian nationals, as well as the company alleged to have coordinated the online rabble-rousing, the Internet Research Agency.

Trump appeared to celebrate the dropping of the charges and the scuttling of the trial as more evidence of the flaws of Mueller's operation. Late Monday night, the president retweeted another user's comment about the developments: "How embarrassing for Team Mueller."

A defense lawyer for the Russian company that may have surprised prosecutors by seeking a trial in the case, Eric Dubelier, said the prosecution suffered from "fundamental problems" from its outset.

"The purpose of this indictment was to make a political statement regarding the outcome of the 2016 election that was grossly overstated," said Dubelier, a partner with law firm Reed Smith.

"In preparing for trial we had every intention to prevail given the problems with the government’s allegations. The government’s evidence was completely devoid of any information that could establish that the defendants knew what they were doing was in violation of highly complex U.S. laws and regulations. This was a make-believe charge to fit the facts solely for political purposes," he added.

One reason prosecutors cited for their retreat was a recent “classification determination bearing on the evidence the government properly gathered during the investigation [which] limits the unclassified proof now available to the government at trial.”

The public filing offered scant details, but suggested that someone in the U.S. intelligence apparatus had decided that disclosing some of the evidence against Concord would expose U.S. intelligence capabilities. Prosecutors asked to submit a separate, secret, classified filing to the court that explained those concerns in more detail.

While prosecutors were not specific in their public filing, one disclosed at a recent court hearing that the Justice Department planned to introduce a mystery witness who they said would implicate Prigozhin in election interference outside Russia. It is unclear whether that person is an intelligence asset, defector or someone else.

Intelligence officials also may have concluded that revealing certain evidence against Concord could put at risk Russians who helped the U.S. conclude that the 2016 activities were directed by the Kremlin. One such Russian with Kremlin ties was housed by the CIA in the Washington suburbs until his identity became public last year.

The Justice Department also filed a criminal case last month that suggested the Russian government was seeking to closely monitor Russians cooperating with U.S. intelligence agencies.

From the outset, supporters of the Russian trolls' prosecution — and some critics of the effort — dubbed it a "name and shame" effort aimed more at seizing the public relations value of an indictment and less at the typical goal of bringing criminals to justice. No trial ever seemed likely unless one of the defendants stumbled into a place where they could be arrested.

However, soon after the indictment was returned in February 2018, Prigozhin sought to call the American prosecutors' bluff without ever exposing himself to the risk of prison. One of his firms, Concord Management & Consulting, hired U.S. lawyers to fight the case. So, the U.S. found itself facing a trial without ever having a human defendant in the dock.

That prospect has been relatively clear for nearly two years, but it took prosecutors until Monday — amid the national panic over coronavirus — to concede that going to the trouble of a trial against a company that has no known presence or funds in the U.S., simply wasn't worth it.

"The government has concluded that further proceedings as to Concord, a Russian company with no presence in the United States and no exposure to meaningful punishment in the event of a conviction, promotes neither the interests of justice nor the nation’s security," prosecutors wrote.

One expert on classified information said Monday that the belated acknowledgment by the prosecution was jarring.

"It's a bit surprising that prosecutors would make this claim so late in the proceeding. It's something they ought to have realized (and may have) months ago or longer," said Steven Aftergood of the Federation of American Scientists. "Prosecutors will want to do a postmortem to understand how they got themselves in this position, and how they can avoid similar missteps in the future."

Prosecutors said recent developments in the case contributed to their decision, including difficulties getting Concord to cooperate with court orders to turn over certain information. They faulted the company for submitting a declaration claiming full compliance that was attested to by Prigozhin, someone they described as "incredible."

Prigozhin is widely known as Putin's chef because he started out as a high-end restaurateur, developed close ties to the Russian president and built the food-focused business into an empire doing contracting around the world for the Russian military.

Concord Management and a related catering company were charged in the criminal case with conspiracy against the U.S. for seeking to frustrate the operation of U.S. election, foreign-agent, and visa laws.

Friedrich did not offer any comment on the government's about-face, but did agree to accept and seal the classified explanation prosecutors offered.