Suspected Russian spies took finance course at UW
SEATTLE -- It appears the two former Seattle residents accused of serving for years as secret agents of Russia's intelligence service attended the University of Washington.
Michael Zottoli, 40, and Patricia Mills, 31, took an advanced finance course at UW while living in Seattle, according to their former instructor, Ufuk Ince.
Some espionage experts believe this new detail suggests the couple was after the secrets of Seattle's high-tech industry.
But Donald Hellmann, professor of international studies at the University of Washington, doesn't buy it.
"If you want serious information, there are huge numbers of ways than having students attend business school," he said.
A more plausible explanation, according to Hellmann, is this: Zottoli and Mills moved to Seattle and enrolled as business students to develop the perfect cover story. After they graduated, they'd move to Washington, D.C., where they'd wait as many years as necessary before starting their spy work.
"They weren't doing anything here but creating a cover, which allowed them to operate with some impunity back there," said Hellmann.
Zottoli and Mills rented at least five apartments around Seattle - two in First Hill and three in Capitol Hill - before moving to Arlington, Virginia in October 2009.
John Evans, resident manager at Belmont Court Apartments on Capitol Hill, said the couple lived in unit 502 from 2008 to 2009, and made no trouble.
"They were the nicest people. In fact, I wish they had stayed on as tenants. They were really good tenants," Evans said. "They never led me to believe there was anything illegal happening."
Zottoli, who claimed he was a U.S. Citizen born in Yonkers, New York, and Mills, who purported to be a Canadian citizen, are married. Zottoli has been in the U.S. Since 2001, investigators said, and Mills has lived in the country since 2003.
According to court documents, Zottoli and Mills' Seattle apartment was searched in February 2006, the document said.
In each of the three searches, investigators found "a set of computer disks ('Password-Protected Disks')," which "contain a steganography program employed by the SVR," the document said.
The search of the Seattle apartment turned up a radio for receiving short-wave radio transmissions and spiral notebooks, "some pages of which contain apparently random columns of numbers," the document said, adding, "the spiral notebook contains codes used to decipher radiograms as they came in."
The couple is not accused of stealing any classified documents.
Hellmann believes that's because while Zottoli and Mills may have been making contacts and collecting information, someone else was doing the dirty work.
"There are all kinds of interesting ways to do it," he said. "You'd send technically competent people or you'd bribe somebody who worked there."
Investigators said the defendants often received packages containing money, as well as a flash memory cards containing computer data.
On June 8, 2006, Mills "traveled to the vicinity of Wurtsboro, New York, with Zottoli, where Zottoli dug up a package containing money that had been buried in the ground by Metsos (another defendant)," the complaint said.
Zottoli and Mills were arrested at their current home in Virginia, where they appeared before a magistrate on Monday. The couple and eight others were arrested across the Northeast and charged Monday with failing to register as foreign agents, a crime that is less serious than espionage and carries up to five years in prison. Some also face money laundering charges. An 11th suspect was arrested in Cyprus, accused of passing money to the spies over several years.
Prosecutors said several of the defendants were Russians living in the U.S. under assumed names and posing as Canadian or American citizens. It was unclear how and where they were recruited, but court papers said the operation went back as far as the 1990s.
Co-defendants had interests in science, finance
All for the sake of a cover story or not, it appears the nine other suspected members of a Russian spy also had academic interests.
One hobnobbed with academics and entrepreneurs who shared his interest in cutting-edge science. Another spoke five languages, went to embassy parties and was fascinated by global politics. A third held herself out to be a venture capitalist and hit the networking circuit, looking for investment opportunities.
The 11 people arrested and accused of being members of the spy ring operating under deep cover in America's suburbs appear to have been part of a slow and patient plan by Moscow to cultivate contacts in the U.S. who could yield vital competitive information - not necessarily on weapons or U.S. strategic planning, but on finance, business and technology, intelligence experts say.
"This is a long-term investment by an intelligence service to lead those individuals there, give them general assignments and see what they can pick up," said John Slattery, a deputy assistant director of counterintelligence at the FBI who retired in 2008 and is now an executive with BAE Systems Intelligence and Security.
"Although they aren't trained intelligence professionals, they are available and on call for assignments such as: Can you go attend this meeting? Can you go attend this trade show? Can you contact this person? Could you maybe enroll in this university? And then elevate the access as they go."
The FBI finally moved in to break up the ring because one of the suspects - apparently a woman who called herself Anna Chapman, who was bound for Moscow, according to court papers - was going to leave the country, the Justice Department said.
The arrests flabbergasted many of the defendants' neighbors. In a case that seemed to have come straight out of a Cold War spy novel or a Hitchcock thriller, many of the defendants lived what seemed to be utterly ordinary suburban lives - saying goodbye to their kids at the bus stop, taking pride in their well-kept lawns and flower beds, making small talk with the neighbors, even holding Fourth of July parties.
In Montclair, N.J., neighbors of a woman who called herself Cynthia Murphy said that they detected an accent, and when they asked where she was from, she said Belgium. Chapman, a young redhead, posted a number of pictures of herself on social networking sites, including a photo of her at the Statue of Liberty and a seductive, pouty shot of her in a lacy baby-blue outfit.
The court papers allege that some of the ring's members were husband and wife and that the spies used invisible ink, coded radio transmissions and encrypted data, and employed Hollywood methods such as swapping bags in passing at a train station.
The alleged deep-cover agents are known as "illegals" in the intelligence world because they take civilian jobs instead of operating inside Russian embassies and military missions.
Federal agents said in court papers that almost all members of the group had been under surveillance for some time.
One suspect, Vicky Pelaez, a reporter and editor for the Spanish-language newspaper El Diario/La Prensa, had been videotaped taking bags of money from a Russian official as early as 2000, the FBI said. Others had their phones tapped, their homes searched and their computer hard drives copied by FBI agents years ago.
All the suspects were allowed to go about their lives, though under close watch.
Donald Heathfield, who worked for a management consulting firm and lived in Cambridge, Mass. - home to Harvard and MIT - had ties to several organizations involved in forecasting emerging technologies. "He hung around the world of futurists," said retired George Washington University professor William Halal.
The two were business partners in TechCast, a think tank that tries to predict the shape of tomorrow's technologies, and had also been members of a board at the Lifeboat Foundation, a nonprofit organization that encourages scientific advancements. Prosecutors said that in 2004, Heathfield met with an employee of the U.S. government "with regard to nuclear weapons research."
Another of those arrested, Mikkail Semenko, worked at Travel All Russia, a small travel agency in Arlington, Va., that is in the same building as a U.S. military recruitment center. Colleagues in the office described him as clumsy and quirky, but smart. They said he spoke five languages.
The agency's marketing manager, Slava Shirokov, said he had known Semenko since they were students together at Amur State University in Russia. Shirokov said Semenko had majored in Chinese studies and spent several years in China after graduating. After moving to the U.S., he got two master's degrees from Seton Hall University in 2008, one in diplomacy and international relations and one in Asian studies.
"He was always interested in languages, global politics and other cultures," Shirokov said. "He liked to go to banquets to meet people. He did a lot of that in New York, he did a lot of this here. We always thought he is networking in order to land the jobs of his dreams. ... He said, `My dream job would be something in international relations, an NGO or something like that."'
A number of the suspects had interests in finance.
One couple, who went by the names Michael Zottoli and Patricia Mills, had taken an advanced finance course at the University of Washington when they were living in Seattle, according to their former instructor, Ufuk Ince. Cynthia Murphy earned a master's degree in business administration from Columbia University this year.
Chapman lived close to the New York Stock Exchange and described herself in numerous Web postings as being on the hunt for investment opportunities in the U.S. and Russia.
Russian officials initially denounced the arrests as "Cold War-era spy stories" and accused elements of the U.S. government of trying to undermine the improving relationship between Moscow and Washington. But the White House and Prime Minister Vladimir Putin expressed confidence that the arrests would not damage ties between the two nations.
Bruce Riedel, a former CIA officer and a senior fellow at the Brookings Institution Saban Center, said it was a "classic KGB-style" operation, in which Russian intelligence officials plant moles and "hope that they will produce something years and maybe even decades later."
"They're trying to get someone into a position of influence, where someone becomes the friend of, let's say, the president of a think tank who may become a Cabinet member in the next administration," Riedel said. "And then you have someone who not only can ask that Cabinet member questions, but might be able to influence what they're doing."
Waldomar Mariscal, the 38-year-old son of Pelaez, scoffed at the allegations Tuesday outside Pelaez's home in Yonkers, N.Y.
"This looks like an Alfred Hitchcock movie with all this stuff from the 1960s," he said. "This is preposterous."
Michael Zottoli, 40, and Patricia Mills, 31, took an advanced finance course at UW while living in Seattle, according to their former instructor, Ufuk Ince.
Some espionage experts believe this new detail suggests the couple was after the secrets of Seattle's high-tech industry.
But Donald Hellmann, professor of international studies at the University of Washington, doesn't buy it.
"If you want serious information, there are huge numbers of ways than having students attend business school," he said.
A more plausible explanation, according to Hellmann, is this: Zottoli and Mills moved to Seattle and enrolled as business students to develop the perfect cover story. After they graduated, they'd move to Washington, D.C., where they'd wait as many years as necessary before starting their spy work.
"They weren't doing anything here but creating a cover, which allowed them to operate with some impunity back there," said Hellmann.
Zottoli and Mills rented at least five apartments around Seattle - two in First Hill and three in Capitol Hill - before moving to Arlington, Virginia in October 2009.
John Evans, resident manager at Belmont Court Apartments on Capitol Hill, said the couple lived in unit 502 from 2008 to 2009, and made no trouble.
"They were the nicest people. In fact, I wish they had stayed on as tenants. They were really good tenants," Evans said. "They never led me to believe there was anything illegal happening."
Zottoli, who claimed he was a U.S. Citizen born in Yonkers, New York, and Mills, who purported to be a Canadian citizen, are married. Zottoli has been in the U.S. Since 2001, investigators said, and Mills has lived in the country since 2003.
According to court documents, Zottoli and Mills' Seattle apartment was searched in February 2006, the document said.
In each of the three searches, investigators found "a set of computer disks ('Password-Protected Disks')," which "contain a steganography program employed by the SVR," the document said.
The search of the Seattle apartment turned up a radio for receiving short-wave radio transmissions and spiral notebooks, "some pages of which contain apparently random columns of numbers," the document said, adding, "the spiral notebook contains codes used to decipher radiograms as they came in."
The couple is not accused of stealing any classified documents.
Hellmann believes that's because while Zottoli and Mills may have been making contacts and collecting information, someone else was doing the dirty work.
"There are all kinds of interesting ways to do it," he said. "You'd send technically competent people or you'd bribe somebody who worked there."
Investigators said the defendants often received packages containing money, as well as a flash memory cards containing computer data.
On June 8, 2006, Mills "traveled to the vicinity of Wurtsboro, New York, with Zottoli, where Zottoli dug up a package containing money that had been buried in the ground by Metsos (another defendant)," the complaint said.
Zottoli and Mills were arrested at their current home in Virginia, where they appeared before a magistrate on Monday. The couple and eight others were arrested across the Northeast and charged Monday with failing to register as foreign agents, a crime that is less serious than espionage and carries up to five years in prison. Some also face money laundering charges. An 11th suspect was arrested in Cyprus, accused of passing money to the spies over several years.
Prosecutors said several of the defendants were Russians living in the U.S. under assumed names and posing as Canadian or American citizens. It was unclear how and where they were recruited, but court papers said the operation went back as far as the 1990s.
Co-defendants had interests in science, finance
All for the sake of a cover story or not, it appears the nine other suspected members of a Russian spy also had academic interests.
One hobnobbed with academics and entrepreneurs who shared his interest in cutting-edge science. Another spoke five languages, went to embassy parties and was fascinated by global politics. A third held herself out to be a venture capitalist and hit the networking circuit, looking for investment opportunities.
The 11 people arrested and accused of being members of the spy ring operating under deep cover in America's suburbs appear to have been part of a slow and patient plan by Moscow to cultivate contacts in the U.S. who could yield vital competitive information - not necessarily on weapons or U.S. strategic planning, but on finance, business and technology, intelligence experts say.
"This is a long-term investment by an intelligence service to lead those individuals there, give them general assignments and see what they can pick up," said John Slattery, a deputy assistant director of counterintelligence at the FBI who retired in 2008 and is now an executive with BAE Systems Intelligence and Security.
"Although they aren't trained intelligence professionals, they are available and on call for assignments such as: Can you go attend this meeting? Can you go attend this trade show? Can you contact this person? Could you maybe enroll in this university? And then elevate the access as they go."
The FBI finally moved in to break up the ring because one of the suspects - apparently a woman who called herself Anna Chapman, who was bound for Moscow, according to court papers - was going to leave the country, the Justice Department said.
The arrests flabbergasted many of the defendants' neighbors. In a case that seemed to have come straight out of a Cold War spy novel or a Hitchcock thriller, many of the defendants lived what seemed to be utterly ordinary suburban lives - saying goodbye to their kids at the bus stop, taking pride in their well-kept lawns and flower beds, making small talk with the neighbors, even holding Fourth of July parties.
In Montclair, N.J., neighbors of a woman who called herself Cynthia Murphy said that they detected an accent, and when they asked where she was from, she said Belgium. Chapman, a young redhead, posted a number of pictures of herself on social networking sites, including a photo of her at the Statue of Liberty and a seductive, pouty shot of her in a lacy baby-blue outfit.
The court papers allege that some of the ring's members were husband and wife and that the spies used invisible ink, coded radio transmissions and encrypted data, and employed Hollywood methods such as swapping bags in passing at a train station.
The alleged deep-cover agents are known as "illegals" in the intelligence world because they take civilian jobs instead of operating inside Russian embassies and military missions.
Federal agents said in court papers that almost all members of the group had been under surveillance for some time.
One suspect, Vicky Pelaez, a reporter and editor for the Spanish-language newspaper El Diario/La Prensa, had been videotaped taking bags of money from a Russian official as early as 2000, the FBI said. Others had their phones tapped, their homes searched and their computer hard drives copied by FBI agents years ago.
All the suspects were allowed to go about their lives, though under close watch.
Donald Heathfield, who worked for a management consulting firm and lived in Cambridge, Mass. - home to Harvard and MIT - had ties to several organizations involved in forecasting emerging technologies. "He hung around the world of futurists," said retired George Washington University professor William Halal.
The two were business partners in TechCast, a think tank that tries to predict the shape of tomorrow's technologies, and had also been members of a board at the Lifeboat Foundation, a nonprofit organization that encourages scientific advancements. Prosecutors said that in 2004, Heathfield met with an employee of the U.S. government "with regard to nuclear weapons research."
Another of those arrested, Mikkail Semenko, worked at Travel All Russia, a small travel agency in Arlington, Va., that is in the same building as a U.S. military recruitment center. Colleagues in the office described him as clumsy and quirky, but smart. They said he spoke five languages.
The agency's marketing manager, Slava Shirokov, said he had known Semenko since they were students together at Amur State University in Russia. Shirokov said Semenko had majored in Chinese studies and spent several years in China after graduating. After moving to the U.S., he got two master's degrees from Seton Hall University in 2008, one in diplomacy and international relations and one in Asian studies.
"He was always interested in languages, global politics and other cultures," Shirokov said. "He liked to go to banquets to meet people. He did a lot of that in New York, he did a lot of this here. We always thought he is networking in order to land the jobs of his dreams. ... He said, `My dream job would be something in international relations, an NGO or something like that."'
A number of the suspects had interests in finance.
One couple, who went by the names Michael Zottoli and Patricia Mills, had taken an advanced finance course at the University of Washington when they were living in Seattle, according to their former instructor, Ufuk Ince. Cynthia Murphy earned a master's degree in business administration from Columbia University this year.
Chapman lived close to the New York Stock Exchange and described herself in numerous Web postings as being on the hunt for investment opportunities in the U.S. and Russia.
Russian officials initially denounced the arrests as "Cold War-era spy stories" and accused elements of the U.S. government of trying to undermine the improving relationship between Moscow and Washington. But the White House and Prime Minister Vladimir Putin expressed confidence that the arrests would not damage ties between the two nations.
Bruce Riedel, a former CIA officer and a senior fellow at the Brookings Institution Saban Center, said it was a "classic KGB-style" operation, in which Russian intelligence officials plant moles and "hope that they will produce something years and maybe even decades later."
"They're trying to get someone into a position of influence, where someone becomes the friend of, let's say, the president of a think tank who may become a Cabinet member in the next administration," Riedel said. "And then you have someone who not only can ask that Cabinet member questions, but might be able to influence what they're doing."
Waldomar Mariscal, the 38-year-old son of Pelaez, scoffed at the allegations Tuesday outside Pelaez's home in Yonkers, N.Y.
"This looks like an Alfred Hitchcock movie with all this stuff from the 1960s," he said. "This is preposterous."
Learn about changes coming to commenting