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Police in Cyprus arrest 11th suspect named in Russian spy ring

By the CNN Wire Staff
  • NEW: Cypriot police arrest 11th suspect named in Russian spy ring
  • NEW: U.S. officials describe an operation straight out of a 1950s spy novel
  • NEW: Russia says arrests are "regrettable" given renewed U.S.-Russia relations
  • Court documents detail alleged deceptive activities by suspected foreign agents
  • Documents say suspects were involved in long-term missions in the U.S.

Washington (CNN) -- Police in Cyprus arrested Tuesday an 11th suspect in an alleged Russian spy ring in the United States.

Robert Christopher Metsos, 55, was arrested in Lanarca after an Interpol "red notice" was served on him, Cypriot police told CNN. He was traveling on a Canadian passport and was about to board a flight to Budapest, Hungary.

He has been released on bail pending further proceedings but is not allowed to leave the country, police said. Metsos faces extradition to the United States.

The U.S. Justice Department announced Monday that 10 people were arrested on charges of being Russian agents involved in a long-term mission in the United States.

Five of the arrested suspects appeared in a New York courtroom Monday. Four of the five, including a longtime U.S.-based columnist for the Spanish-language "El Diario" newspaper, were advised of their rights and ordered held due to flight risk, with their next hearing scheduled for July 1.

The other defendant, identified in a court document as Anna Chapman, was denied bail, and her next hearing was scheduled for July 27.

The news of the alleged espionage came less than a week after Russian President Dmitry Medvedev visited the United States and on Tuesday, the Russian Foreign Ministry said the arrests are "unfounded and have unseemly goals.

"We do not understand the reasons why the U.S. Department of Justice has made a public statement in the spirit of the Cold War," said the statement, posted on the ministry's website. "Such incidents have occurred in the past, when our relations were on the rise. In any case it is regrettable that all these things are happening on the background of the 'reset' in Russian-U.S. relations announced by the U.S. administration."

Asked about the incident Tuesday in an appearance with Israeli Foreign Minister Avigdor Lieberman in Jerusalem, Russian Foreign Minister Sergey Lavrov said, "We still have not received an explanation ... I am hopeful we will get an explanation." He said the timing of the announcement was significant but did not elaborate. Asked about the matter again following the news conference with Lieberman, Lavrov said, "I have already said everything."

Assistant U.S. Attorney Michael Farbiarz said search warrants in the Russian spy case were being executed "across the country." He called the initial criminal complaint "the tip of the iceberg."

"These people are trained together," Farbiarz said of the defendants. "At the core of this is deception."

The suspects were "trained Russian intelligence operatives," a Justice Department spokesman said, and information from court documents alleged they were part of a mission to plant "deep-cover" agents in the United States.

The Justice Department said the suspects were supposed to recruit intelligence agents, but were not directly involved in obtaining U.S. secrets themselves. They were charged with acting as agents of a foreign government, and nine also were charged with conspiracy to commit money laundering.

The charges include conspiracy to act as an agent of a foreign government without notifying the U.S. attorney general, a crime that carries a maximum penalty of five years in prison, the Justice Department said. Conspiracy to commit money laundering has a maximum penalty of 20 years in prison.

The case resulted from a "multiyear investigation" conducted by the FBI, the U.S. Attorney's Office for the Southern District of New York and the Justice Department's National Security Division, according to a Justice Department statement. The 11 suspects were charged in two separate criminal complaints.

Last week, President Barack Obama and Medvedev spoke of strengthened ties between the former Cold War foes after their meeting at the White House. However, court documents and Justice Department officials described a Russian intelligence operation straight out of a 1950s spy novel.

According to the court documents, some of the suspects adopted phony identities, including those of dead Americans, and posed as married couples.

Britain and Ireland were both looking into allegations that the spy ring suspects may have traveled using forged British and Irish passports, according to representatives of the foreign ministries.

The spying suspects engaged in secret communications including exchanges of bags, money drops and use of invisible ink, as well as more modern touches such as private wireless computer networks between specific laptops, court documents said.

A decrypted message from Moscow to two of the suspects said they were sent to the United States for "long-term service," one of the documents said.

"Your education, bank accounts, car, house, etc. -- all these serve one goal: fulfill your main mission, i.e, to search and develop ties in policy making circles in U.S. and send intels (intelligence reports)," the document said.

The Russian operation was believed to date back to the 1990s, the court document said. It added that the FBI conducted extensive electronic surveillance of the suspects for years, including secretly recording and videotaping them and surreptitiously entering residences to take photographs and copy documents.

One of the suspects is Vicky Pelaez, a columnist for "El Diario" for more than 20 years covering politics, immigration and other issues, her lawyer confirmed. Pelaez is married to Juan Lazaro, another of the suspects arrested Monday, and the couple resided in Yonkers, a New York suburb.

Pelaez, Lazaro, Chapman and two other suspects -- identified as Richard Murphy and Cynthia Murphy -- appeared in the New York courtroom. The other suspects were identified in court documents as Donald Howard Heathfield, Tracey Lee Ann Foley, Michael Zottoli, Patricia Mills, Mikhail Semenko and Metsos, the man arrested in Cyprus.

Semenko and Chapman allegedly conducted the private wireless computer links to communicate with a Russian government official, one court document alleged. In one instance, Chapman was in a bookshop and the Russian government official drove by in a van to make the wireless connection, the document said.

Another document described alleged efforts to secretly get money to the suspects to fund their clandestine activities, including money drops involving exchanged bags in public places and other subterfuge.

In one incident, Metsos received money from a Russian agent and buried it in a park in northern Virginia, the document said. Mills and Zottoli later showed up at the park to dig up the money, the document said.

CNN's Terry Frieden, Jill Dougherty, Michael Schwartz, Arkady Irshenko and Carol Jordan contributed to this report.