Russia rips spy bust as arrests rise to 11

NEW YORK Authorities described the arrest of 11 people living in the "tip of the iceberg" of a conspiracy of Russia's intelligence service, SVR, to collect inside U.S. information.

In addition to the 11, 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, a former deputy head of the KGB in London who defected in 1985, said Russian President Dmitry Medvedev would know the number of illegal operatives in each target country.

Each of the 11 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. Two criminal complaints outlining the charges were filed in U.S. District Court in New York.

The 11th suspect, using the name Christopher Metsos and purporting to be a Canadian citizen, was arrested at the Larnaca airport in Cyprus while trying to fly to Budapest, Hungary, police in the Mediterranean island nation said. He was later released on bail.

Metsos, 54, was among those named in complaints unsealed Monday in federal court in Manhattan. Authorities in Cyprus said he will remain there for one month until extradition proceedings begin.

Russia adamantly denounced the arrests as an unjustified throwback to the Cold War. Also, senior lawmakers are saying that some in the U.S. government may be trying to undercut President Barack Obama's warming relations with Moscow.

A ministry statement issued Tuesday said Russia is counting on the U.S. to show "proper understanding" taking into account the "positive character" of U.S.-Russian relations.

"These actions are unfounded and pursue unseemly goals," the Russian Foreign Ministry said in a statement. "We don't understand the reasons which prompted the U.S. Department of Justice to make a public statement in the spirit of Cold War-era spy stories."

Intelligence regarding Obama's foreign policy, especially toward Russia, appears to have been a top priority for the Russian agents, prosecutors said. Reports also allege that the defendants' spying has been going on for years.

One defendant was a reporter and editor for a prominent Spanish-language newspaper videotaped by the FBI contacting a Russian official in 2000 in Latin America, prosecutors said.

Court documents also say that in spring 2009, conspirators Richard and Cynthia Murphy, who lived in New Jersey, were asked for information about Obama's impending trip to Russia that summer, the U.S. negotiating position on the START arms reduction treaty, Afghanistan and the approach Washington would take in dealing with Iran's suspect nuclear program.

Documents also allege that the operatives also were asked to send background on U.S. officials traveling with 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 US interests," Moscow asked, according to the documents.

In one instance, an 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.

Moscow Center wanted Murphy to develop the relationship with this man so she can gain entry "to venues (to major political party HQ in NYC, for instance."

Evidence shows the defendants communicated with Russian agents using mobile wireless transmissions between laptop computers, which has not previously been described in espionage cases brought in the U.S.: 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.

Aside from the Murphys, three other defendants also appeared in federal court in Manhattan - Vicky Pelaez and Juan Lazaro, who were arrested at their Yonkers, N.Y., residence, and Chapman, arrested in Manhattan on Sunday.

Aside from fake identities, authorities say, they used Cold War spycraft - invisible ink, coded radio transmissions, encrypted data - to avoid detection. In addition to using mobile wireless transmission between laptops, the court papers described high-speed burst radio transmission or the hollowed-out nickels used by captured Soviet Col. Rudolf Abel in the 1950s to conceal and deliver microfilm.

The timing of the arrests was notable, given the efforts by Presidents Barack Obama and Dmitry Medvedev to reset U.S.-Russia relations. The two leaders met last week at the White House after Medvedev visited high-tech firms in California's Silicon Valley, and both attended the G-8 and G-20 meetings over the weekend in Canada.

Amidst the arrests, there was one operative officials said was still at large, but he was caught early Tuesday. Christopher Robert Metsos, 54, was arrested early Tuesday based on an Interpol arrest warrant. Metsos appeared in a Larnaca court, which ordered Metsos released on $24,700 bail after surrendering his travel documents. The court also ordered Metsos to report to a Larnaca police station once a day.

AP contributed to this report.

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