Confidential

Operation Ghost Stories: a Russian Spy Ring in the United States

On the 27th of June 2010, the Federal Bureau of Investigation (FBI) arrested ten illegal agents of the Russian Foreign Intelligence Service (SVR). This operation, the so-called Operation Ghost Stories dubbed the Illegals Program by the FBI, lasted for more than a decade. It aimed to uncover and arrest a Russian spy ring located in the United States.

In the early 2000s, the FBI became aware of a group of Russian illegals on American soil. The FBI employs the word “illegal” to describe an intelligence agent who operates in the US without diplomatic cover. This means that he/she did not declare his/her true job when entering the country.

The goal of these spies was to gain access to classified information and then send it to Moscow. To accomplish this, they had to disappear into the American community. Not being recognised and act as American citizens were key strategies. The best way to do so was to become someone they were not.

The Spy Ring and their Modus Operandi

For more than a decade, during Operation Ghost Stories, the FBI agents observed these Russian spies. They also bugged their homes, listen to thousands of hours of tapes of their conversations and followed their movements.

They watched these illegals establishing themselves and assimilating into American society. Some of them even got married and raised children.

Alan Kohler, one of the FBI agents that worked at the case and now is the assistant director of the FBI’s Counterintelligence Division, once stated, “They went to school with American. They went to July 4th parties with their neighbours. And never once did anybody suspect they would be Russian spies.”

The Russian agents communicated with Russia through private Wi-fi networks, invisible ink, swapping identical bags in public areas. They also used radiograms and steganography. This last method is a system that uses special encryption software to digitally encrypt messages and conceal them into a coloured photograph. Everyone can see it, but to initiate the program they needed a specific code. By pressing the “Control-alt E” keys and then entering a password of 27 characters, the Russian spies were able to communicate through what looks like a simple picture on the web.

While living their lives, these spies had to make contact with government policymakers, academics and people who could have provided valuable intelligence related for example to nuclear programs or U.S national security. They were engaged in the so-called “spotting and assessing” process: they were trying to identify friends, colleagues or targets who one day could hold a position of influence and power and consequently have access to classified intelligence.

Operation Ghost Stories: The Arrest and the Spies Exchange

During Operation Ghost Stories, the FBI managed to gather valuable intelligence in order to one day arrest the Russian spies.

As an example, in May 2004, Christopher Mestos, responsible to deliver money to the Russian illegals, buried a large amount of cash at a rest stop outside of New York. The FBI then installed cameras in the area and waited for someone to come and pick up the money. They had to wait more than two years, but in June 2006, Michael Zottoli, another spy, unearthed the drop and the FBI caught him on camera.

On the 27th of June 2010, the American authorities arrested ten Russian spies in a series of raids in Boston, Northern Virginia, Montclair, and Yonkers. The FBI charged them with fraud, identity theft, and failing to register as foreign agents.

On the 8th of July 2010, all the arrested Russian spies pled guilty to act as unlawful agents on American soil and they all had to disclose their true identity.

On the same day, Russia and the US reached a deal under which the arrested Russian spies would be deported to their mother country in exchange for individuals who Russia arrested, imprisoned, and convicted of being spies for the United Kingdom and the US. In order to be freed, these spies had to admit and declare that they were spying for either the US or UK.

The Russian Spy Ring

The Russian spy ring, identified during Operation Ghost Stories, consisted of 4 couples and two single individuals.

Operation Ghost Stories
The 10 Russian Spies Arrested during Operation Ghost Stories; via Wiki Commons
  • Vicky Peláez and Juan Lazaro were respectively born in Peru and Russia. His real name was Mikhail Anatolyevich Vasenkov, and they lived in Yonkers, New York. The real Juan Lazaro presumably died in 1947 in Uruguay at the age of 3. Later, Vasenkov stole his identity. She was a columnist for El Diario, an American Spanish-language newspaper, and he was a professor of Latin American and Caribbean politics.
  • Donald Heathfield and Tracey Lee Ann Foley, respectively Andrey Bezrukov and Yelena Vavilova lived in Cambridge, Massachusetts. She was a real estate agent, and he was a member of the World Future Society, a think tank focused on future technologies. He also worked for Global Partners, a consulting firm, as a salesman. During the investigation, the FBI found out that Heathfield stole the identity of a dead Canadian.
  • Richard and Cynthia Murphy lived in Montclair, New Jersey. Their real names were Vladimir Guryev and Lidiya Guriyeva. While he was home with their children, the wife developed contacts in various financial circles in New York. There, she met Alan Patricof, a venture capitalist with close ties to Clinton’s family.
  • Michael Zottoli and Patricia Mills, whose real names are Mikhail Kutsik and Natalya Pereverzeva. They were first based in Seattle, Washington, but then they moved to Arlington, Virginia. They respectively arrived in the US in 2001 and 2003. Zottoli introduced himself as an Italian investment banker, and Mills told people that she was a student from Canada. The FBI, while searching their house, found a codebook and a shortwave radio.

The individuals

  • Anna Chapman was born in Russia, and her former name is Anya Kushchenko. In 2001, while in London, she met Alex Chapman, the son of a British businessman, and then they got married. They divorced five years after and then she moved to New York City, where she worked as a real estate agent. After the FBI arrested her and deported her to Russia, she became the face of the Russian propaganda machine. She also started working as a model and a TV host on Russian television.
  • Mikhail Semenko, a Russian agent operating under his real name, moved to the United States to attend the university and was fluent in Russian, English, Spanish, and Mandarin. He was based in Arlington, Virginia, and worked at Travel All Russia, a travel agency that planned trips for Chinese and Spanish tourists. Semenko picked that particular travel agency because the owner of the company, Slava Shirokov, was also a geopolitical analyst in a financial company, and consequently, he had access to classified intelligence.

During the same operation, the FBI arrested an 11th suspect, Christopher Mestos, the “money man” of the group. Mestos claimed to be Canadian, and after his arrest in Cyprus, he managed to escape and disappear. The FBI later identified him as Pavel Kapustin, a Russian professional spy.

The Russian Prisoners

The individuals arrested by the Russian authorities and then swapped with the Western countries were:

  • Igor Sutyagin was an arms control researcher. The Russian authorities sentenced him in 2004 to 15 years in prison for spying for the British government.
  • Sergei Skripal was a Russian Colonel and the Russian Federal Security Service (FSB) arrested him for high treason and accused him of working for the MI6. The FSB later sentenced him to 13 years in prison in 2006.
  • Alexander Zaporozhsky was arrested for spying for the United States and sentenced to 18 years in 2003.
  • Gennady Semyonovich Vasilenko was a KGB officer and was suspected of passing information to the US. The Russian authorities arrested him for possession of illegal firearms and other minor offences. He was then freed during the swap of prisoners due to a special request coming from the CIA.

The swap, which took place on the 9th of July 2010 in a remote airport in Vienna, marked the biggest swap of spies since the Cold War, during which 23 Western spies were swapped with four Eastern ones.

After the swap, former President Dmitry Medvedev awarded the Russian spies with the Russian highest honours.

Author

Rachele Momi

Rachele Momi is a graduate in Intelligence & Security Studies at Brunel University and in Middle East Politics at SOAS. Her research is mainly focused on the Middle East region, tradecraft, and cyber warfare.

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