Russian Spy Ring

8/9/2019 Russian Spy Ring

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Approved:MICHAEL FARBIARZ/GL KOPP/JASON SMITHAss i s t an t United Sta tes AttorneysKATHLEEN KEDIANTr i a l Attorney , Counterespionage Sect ion,Na t iona l Secur i ty Divis ion , Department of Jus t i ce

Before: HONORABLE RONALD L. ELLISUnited Sta t e s Magis t ra te JudgeSouthern Dis t r i c t of New York- - - x

UNITED STATES OF AMERICA: -v.-

ANNA CHAPMAN, andMIKHAIL SEMENKO,

Defendants . - - - xSOUTHERN DISTRICT OF NEW YORK, s s . :

SEALEDCOMPLAINTViola t ion of18 U.S.C. ,371

COUNTY OF OFFENSE:NEW YORK

AMIT KACHHIA-PATEL, being d uly sworn, deposes and sayst ha t he i s a Spec ia l Agent with the Federa l Bureau ofInves t iga t ion ("FBI") and charges ~ fol lows:

COUNT ONE

Conspiracy to Act as Unregistered Agents o f a Foreign Government1. From in or about the 1990s, up to and inc lud ing

the presen t , in the Southern Dis t r i c t of New York and elsewhere ,ANNA CHAPMAN and MIKHAIL SEMENKO, the defendants , and othe rsknown and unknown, unlawful ly , wi l l fu l l y a nd knowin gly , d idcombine, consp i re , confedera te , and agree t oge the r and with eachothe r to commit an of fense ag ain st the Uni ted Sta t e s , to wi t , tovio la te Sect ion 951 of Ti t l e 18, United Sta t e s Code.

2. It was a pa r t and an ob jec t of the conspiracy t h a tANNA CHAPMAN and MIKHAIL SEMENKO, the defendants , and othe rsknown and unknown, unlawful ly , wi l l fu l l y and knowingly, would andd id ac t in th e United Sta tes as agents of a fore ign government,spec i f i ca l ly the Russian Federat ion, without p r io r n o ti fi ca ti on


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to the Attorney General , as required by law, in vio la t ion ofTi t l e 18, United Sta t e s Code, Sect ion 951.

Overt Acts

3.i l l e g a l objec twere committedelsewhere:

In fu r the rance o f th e consp iracy and to e f f ec t thet h e reo f , the fol lowing ove r t ac t s , among othe rs ,in the Southern Dis t r i c t of NewYork and

a. On or about June 26, 2010, ANNA CHAPMAN, thedefendant , met with an i n d iv i dua l pu r po r ti ng to be a RussianGovernment o f f i c i a l in Manhattan, New York, a t which she(CHAPMAN) rece ived a f r audulen t passpor t .

b. On or about June 26, 2010, MIKHAIL SEMENKO,the defendant , met with an i nd iv id u al p u rp o rt in g to be a RussianGovernment o f f i c i a l in Washington, D.C.

(T i t l e 18, United Sta tes Code, Sec t ion 371.)The bases fo r my knowledge and the foregoing charges

are , in pa r t , as fo l lows:4. I have been a Spec ia l Agent with th e FBI fo rapproximately f i ve years . C urren tly , I am ass igned to the

Counte r in te l l igence Divis ion w ith in the New York Fie ld Off ice ofthe FBI. The focus of my coun te r in t e l l i gence e f fo r t s has been onthe fore ign i n t e l l i gence a c t i v i t i e s of th e Russian Federat ion. Ihave learned th e fac t s conta ined in t h i s Complaint from, amongothe r sources , my per sona l pa r t i c i pa t i on in t h i s i nves t iga t ion ,my di scuss ions with othe r law-enforcement a ge nts , se arc he s t h a t Ihave conducted, surve i l lance t h a t I have conducted, and my reviewof documents, video and audio r ecord ings , and o th e r e v id ent ia rymate r i a l s . Because t h i s Complaint i s being submit ted fo r thel imi ted purpose of es t ab l i sh ing p ro ba ble c au se ; it does notinc lude every fac t t ha t I have le arn ed d urin g the course of t h i sinves t iga t ion . Fur the r , any s ta tements r e l a t ed here in arere la te d in subs tance and in pa r t only .h THE "ILLEGALS" PROGRAM

5. The FBI has conducted a mul t i -year inves t iga t ionof a network o f United Sta tes-based agents of the fo re ign

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i n t e l l i gence organ of the Russian Federat ion ( the "SVR U ).l Thet a rge t s of the FBI 's inves t iga t ion inc lude cover t SVR agents whoassume f a l s e i d en t i t i e s , and who are l iv ing in the United Sta teson long- term, "deep-cover u assignments . These Russian sec re tagents work to hide a l l connect ions between themselves andRussia , even as they ac t a t the di rec t ion and under the cont ro lof the SVR; these sec re t agents are t yp ica l ly ca l l ed " i l l ega l s . uAs se t fo r th in more de t a i l in the a t t ached Complaint, seeAttachment A, which i s incorporated by r ef er en c e h er ei n, i l l ega l sreceive ex tens ive t ra in ing by the SVR before being ass igned to afore ign country under a f a l s e id en ti ty to opera te on behal f ofRussia. See Complaint ~ 8-9 (descr ibing i l l e g a l s ' t r a in ing , anduse of f a l se i d en t i t i e s ) .

6. The SVR also operates a subse t of i l l ega l s - whoperform the same work as i l l ega l s , but opera te in fore igncountr ies under t h e i r t rue names. This ~ u b s e t of i l l ega l s i sgenera l ly t r a in ed in roughly the same t r a de -c r a f t as the othe ri l l ega l s ( in c lud ing agen t- to - agen t communications, inv i s ib lewri t ing, and th e use of a cover profess ion) , but t h e i r t ra in ingi s ty p ic a ll y s h o rt er . In a dd it io n, th es e i l l ega l s are no tgenera l ly pa i red w ith a no th er i l l e g a l .

7. The FBI ' s inves t iga t ion has revealed t h a t anetwork of i l l e g a l s ( the " I l l e ga l s U ) i s now l iv ing and opera t ingin the United Sta t e s in the serv ice o f one pr imary , long-termgoal : to become su f f i c i en t l y "Americanizedu such t h a t they cang a th er i nf ormat io n about the United Sta t e s fo r Russ ia , and cansuccess fu l ly r e c r u i t sources who are in , o r are ab le to .i n f i l t r a t e , United Sta tes pol icy-making c i r c l e s .

8. The SVR spe l led ou t the purpose of the I l l ega l s 'presence in America in a 2009 message to two co-consp i ra to rs whoare named as defendants in the at tached Complaint . Tha t mes sage ,which was sen t by Moscow Center , has been decrypted by the FBIand reads , in pa r t , as fol lows:

You were s en t to USA fo r long-term se rv i ce t r i p . Youreduca t ion , bank accounts, ca r , house e tc . - a l l theseserve one goa l : f u l f i l l your main miss ion, i . e . tosearch and develop t i e s in pol icymaking c i r c l e s in USand send i n t e l s [ i n t e l l i gence repor t s ] to C[ente r ] .

1 The SVR headquar ters in Moscow i s known as "MoscowCenter U or "Center . u3


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9. Based on the fac t s s e t fo r th below, I bel ievet h a t ANNA CHAPMAN and 'MIKHAIL SEMENKO, th e defendants , are par tof the subse t of I l l ega l s who, as desc r ibed above in Paragraph7, opera te under t h e i r t rue names.10. I am aware t h a t fede ra l law r eq u ir es in d iv id u al swho are ac t ing as agents fo r fo re ig n governments to no t i fy theAtto rn ey Genera l of the United Sta t e s . The Department of

Jus t ice ("DOJ") mainta ins f i l e s of a l l i nd iv idua l s who haver eg i s t e red as agents o f fore ign governments. A recen t ly conducted review of DOJ f i l e s ind ica tes t ha t ANNA CHAPMAN andMIKHAIL SEMENKO, th e defendants, have never no t i f i ed the DOJt h a t he or she i s an agent of the Russian Federat ion.I I . MEANS AND METHODS OF THE CONSPIRACY:

COVERT COMMUNICATIONS BY PRIVATE WIRELESS NETWORKS

11. To fu r the r the aims of the conspiracy , MoscowCenter has ar ranged fo r the defendants c la nd e sti ne ly tocommunicate with the Russian Federat ion. In pa r t i cu la r , theconsp i ra to rs have used a number of methods of sec re tcommunications. See Complaint I I I .A . As s e t fo r th below, theseinc lude cover t communications by means of pr iva te wire lessnetworks.

12. In genera l terms, cover t communication v ia ap ri va te w i re le ss network i s a form of e lec t ron ic communicationthrough pai red l ap top computers. Such cover t communicationu t i l i z e s temporary wire less networks t h a t spr ing up between twoc ompu te rs a nd can be used to t ransmit data between them. Theway th i s system t yp i ca l l y works i s as fo l lows: a ~ a p t o pcomputer ("LAPTOP A") i s pre-conf igured to c rea te i t s ownpr iva te wire less loca l area network. This wire less network i sprogrammed to only communicate with another spec i f i c laptop("LAPTOP B"), based on LAPTOP B 's Media Access Control ("MAC")address . 2 Once LAPTOP A t ra nsmits th e s igna l to es t ab l i sh i t sown p r iva t e wi re l e s s network, it wi l l be " jo ined" by LAPTOP Bwhen LAPTOP B comes within a cer ta in p h ys ic al d is ta nc e of LAPTOPA. Once the two laptop computers are both on the p r iva t ewire less network, they can communicate with each other by

2 A MAC address i s a unique iden t i fy ing number ass ignedby a manufac turer to e l ec t ron ic communications devices , such aslaptop computers and Wi-Fi network ca rds . All computers t ha taccess the i n t e rne t through a wire less network do so by publ ic lybroadcas t ing t h e i r MAC addresses via rad io t ransmission in orde rto l oca te a device c.onnected to the i n t e rne t .

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exchanging d a t a . The d a t a can be encrypted so t h a t it can onlybe read w ith t h e a i d o f s p e c i a l i z e d decrypt ion s o f t w a r e , s i m i l a rt o t h a t used t o d e c r y p t messages hidden through steganography,as d e s c r i b ~ d i n t h e Complaint a t t a c h e d h e r e t o .

ANNA CHAPMAN'S USE OF PRIVATE WIRELESS NETWORKS13. Since i n o r about January 2010, law-enforcement

a g e n t s , a c t i n g p u r s u a n t t o j u d i c i a l o r d e r s , conducteds u r v e i l l a n c e o f ANNA CHAPMAN, the defendant , a t v a r i o u sl o c a t i o n s i n New York C i t y . On approximately t e n Wednesdaysbetween January 2010 and June 2010, law-enforcement agentsobserved CHAPMAN i n t h e p h y s i c al v i c i n i t y o f an i n d i v i d u a l("Russian Government O f f i c i a l #1") who has, on m u l t i p l eoccasions , been observed e n t e r i n g t h e Russian Mission t o t h eUnited Nations i n Manhattan. Based on my t r a i n i n g , experience,and p a r t i c i p a t i o n i n t h i s i n v e s t i g a t i o n , I b e l i e v e t h a t on eacho f t h e s e t e n o c c a s i o n s , CHAPMAN and Russian Government O f f i c i a l#1 c o v e r t l y exchanged e l e c t r o n i c communications v i a a p r i v a t ew i r e l e s s network, as d e s c r i b e d a b ~ v e .

14. S e t f o r t h below a r e c e r t a i n examples o fWednesdays on which ANNA CHAPMAN, t h e defendant , and RussianGovernment O f f i c i a l #1, were i n t h e v i c i n i t y o f each o t h e r , i no r d e r t o exchange e l e c t r o n i c messages c o v e r t l y .

a. On January 20, 2010, law-enforcement agents ,a c t i n g p u r s u a n t t o j u d i c i a l o r d e r s ,performed video s u r v e i l l a n c e on a c o f f e eshop l o c a t e d near the i n t e r s e c t i o n o f 47 thS t r e e t and 8 Avenue i n Manhattan, New York(th e "C offee Shop"). CHAPMAN was s e a t e dn e a r t h e window o f t h e Coffee Shop and hadwith h e r a bag (th e "T ote Bag"). A f t e rapproximate ly t e n minutes , I observed aminivan pass by t h e window o f t h e CoffeeShop. Based on my c o n v e r s a t i o n s witha n o t h e r law-enforcement a g e n t , I know t h a tRussian Government O f f i c i a l #1 has beenobserved d r i v i n g t h e minivan, recognized byi t s l i c e n s e p l a t e , on a number o f occas ionssubsequent t o January 20, 2010. As p a r t o ft h e s u r v e i l l a n c e o p e r a t i o n , law-enforcementa g e n t s u t i l i z e d a commercia l ly a v a i l a b l et o o l t h a t can d e t e c t t h e p r e s e n c e o fw i r e l e s s ' networks. The a g e n t s d e t e c t e d t h epresence o f a p a r t i c u l a r network ( the "ADHOC NETWORK") with two a s s o c i a t e d MAC

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addresses ("MAC ADDRESS A" and "MAC ADDRESSB"). Based on my t ra in ing , exper ience , andpar t i c ipa t ion in t h i s i nves t iga t ion , Ibe l i eve t h a t on January 20, CHAPMAN (fromthe Coffee Shop) and Russian GovernmentOff i c i a l #1 (from the m inivan) used t h e i rl ap top computers (which bore "MAC ADDRESS A"and "MAC ADDRESS B") to c rea t e the AD HOCNETWORK and to use it to communicate withone another .

b . On March 17, 2010, law-enforcement agents ,ac t ing pursuant to j ud ic i a l order s ,per fo rmed v id eo surve i l lance on a book s to relo ca ted in the v i c in i t y of Greenwich andWarren St ree t s in Manhattan ( the "BookSto re " ) . CHAPMAN was i n s ide the Book Store .At the same t ime , Russian GovernmentOff i c i a l #1 was across the s t r e e t from theBook S to re , c arry in g a b r i e f c a s e . Iobserved CHAPMAN pu l l a l ap top out o f theTote Bag. CHAPMAN s tayed in th e Book Storefo r approximately t h i r t y minutes ; RussianGovernment Off i c i a l #1 was in the v i c in i t yo f the Book Store (but outs ide) f o approximately twenty of those t h i r t yminutes . As par t of , the surve i l lanceopera t ion , law-enforcement agents ut i l i z ed acommercia l ly ava i l ab le t oo l t ha t can de tec tthe presence of wire less networks. Lawenforcement agents were ab le to de tec t apa r t i cu la r MAC address - MAC ADDRESS A - a tthe t ime t h a t CHAPMAN was observed poweringon her l ap top computer; law-enforcementagents were also able to d e t e ~ m i n e t h a t th ee l ec t ron ic device assoc ia ted with MACADDRESS A c re ate d th e AD HOC NETWORK.Approximately t h ree minutes a f t e r thecrea t ion of the AD HOC NETWORK, anothere lec t ron ic d ev ic e w ith MAC ADDRESS B wasd et ec te d jo in in g the AD HOC NETWORK.

c . On Apr i l 7, 2010, law-enforcement agen t s ,ac t ing pursuant to j ud i c i a l orders ,performed surve i l l ance on Russian GovernmentOf f i c i a l #1 s t a r t ing from th e po in t t h a t hel e f t h is o ff ice in mid-town Manhattan.According to a law-enforcement agent who was

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The i nd iv idua l seen driving the Car has been i den t i f i ed as aRussian government o f f i c i a l ("Russian Government Of f i c i a l #2).3The Car remained in the parking lo t fo r approximately twentyminutes and then drove away. Within a few minutes, SEMENKO l e f tthe Restaurant .

16. According to Specia l Agent-I , on June 5, 2010,during the surve i l lance of MIKHAIL SEMENKO, the defendant , lawenforcement a ge nts , p ursu an t to j ud i c i a l order , u t i l i z ed thesame commercial ly avai lab le too l t h a t can detec t the presence ofwire less networks as descr ibed above, t h a t was used during thesurve i l lance opera t ions on ANNA CHAPMAN, th e d efe nd an t. Thedevice was able to de t ec t the presence of two MAC addresses onan ad hoc network during the t ime t h a t SEMENKO and RussianGovernment Off i c i a l #2 were in the vic in i ty of each othe r insidethe Restauran t and i t s parking lo t , respec t ive ly . Therefore,based on my t r a i n ing , exper ience , and pa r t i c i pa t i on in t h i sinves t iga t ion , and as fu r the r informed by SEMENKO's s ta tementsto an undercover agent descr ibed below, I be l i eve t h a t SEMENKOwas t ry in g to u t i l i z e the pr iva te wire less networ k s ys tem tocommunicate with Russian Government Off ic ia l #2.I I I . ANNA CHAPMAN'S JUNE 26, 2010 MEETING WITH AN UNDERCOVER

AGENT POSING AS A RUSSIAN GOVERNMENT OFFICIAL17. As s e t fo r th in g rea t e r de t a i l below, on June26, 2010, an FBI under cove r a ge nt ("DC-I"), p ur po rtin g to be aRussian consu la te employee, arranged a meeting with ANNACHAPMAN, the defendant , in Manhattan, New York, a f t e r t e l l ingher t h a t it was urgent to meet with her in order to provide

something to her . During t h i s meeting, among other t h ings : (a )CHAPMAN and DC-l discussed her "Wednesday" c ov er t la pto pcommunication sess ions , see supra I I .Ai (b ) CHAPMAN provided DC-I with her laptop computer, which apparent ly was having

3 Law-enforcement o f f i ce r s have observed the person whoappears to be Russian Government Off i c i a l #2 en ter ing and leav ingthe Russ ian Mi ss ion . In addi t ion , law-enforcement o f f i c i a l s haveobta ined from the United Sta t e s Department of Sta t e the v isaapp l ica t ion of an i nd iv idua l i d en t i f i ed as a "second sec re ta ry"o f the Russian Mission. The photograph of the app lican t in tha tv is a a pp lic at io n i s a photograph of Russian Government Off i c i a l#2. Furth ermor e, Ru ss ia n Government Off i c i a l #2 wasobserved , in 2004, engaging in a b ru sh -p as s w ith a co-conspi ra tornamed as a defendant in the Complaint a t a t r a in s t a t i on inFores t Hil l s , New York. See Complaint lJIlJI 53-54.

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t echn ica l d i f f i cu l t i e s , so t ha t it could e i the r be f ixed , orsen t back to Moscow; and (c) UC-l provided CHAPMAN with apasspor t bear ing a f i c t i t i o u s name, which DC-l i n s t ruc t edCHAPMAN to provide to another i l l e g a l , who was based in New Yorkand who, unl ike CHAPMAN, was opera t ing in a fa l se name.

18. On June 26, 2010, a t approximately 11:00 a .m. ,DC-l placed a consensual ly- recorded te lephone ca l l to ANNACHAPMAN, the defendant . 4 In t h a t ca l l , which was conducted inRuss ian , DC-l s ta te d th at he needed to meet with CHAPMAN t h a tday, in order to provide her with something.19. Late r t h a t day, a t approximately 12:30 p.m. , ANNACHAPMAN, the defendant , placed a te lephone c a l l to DC-I, which

was i n t e rcep ted pursuant to a j ud i c i a l order . In t h a t c a l l ,which a lso was conducted in Russian, CHAPMAN s ta te d th a t itwould be d i f f i c u l t to meet t h a t day, and asked whether it wouldbe p oss ib le to meet the next day i ns t ead . DC-l s ta te d th at themeeting was urgent , but agreed to meet with CHAPMAN thefol lowing morning. At approximately 1:00 p.m. , CHAPMAN againplaced a c a l l to DC-I, which c a l l was also in te rcep ted . pursuantto a j ud i c i a l order . In th is th i rd c a l l , which was a lsoconducted in Russian, CHAPMAN s ta te d th at she would r e tu rn toNew York from Connect icut fo r a meeting with UC-1 and would ca l lUC-1 a t approximate ly 4:00 p.m. UC-l di rec ted CHAPMAN to meeta t a pa r t i c u l a r cof fee shop in downtown Manhattan, ~ e York.

20. At approximate ly 4:30 p.m. , DC-l met with ANNACHAPMAN, the defendant , a t the prev ious ly agreed upon loca t ionin Manhattan. T his mee tin g was recorded by a hidden recordingdevice worn by DC-I. At the ou t se t of t h i s meeting, DC-1i d en t i f i e d himse l f as the person who had spoken with CHAPMAN onthe phone ea r l i e r in the day. At the beginning of the meeting,DC-1 and CHAPMAN spoke to each o the r in Russian, bu t then DC-1sugges ted t h a t they speak in Engl ish so as to draw l e s sa t t en t ion to themselves . Based on my review of the recording ofthe meet ing, 1 have l ea rned the fol lowing:

a . UC-l asked, "Te l l me how i s everything? How areyou d o i n g ? ~ CHAPMAN rep l ied , "Everyth ing i s coolapa r t from c o n n e c t i o n . ~ Based on my t r a i n ing ,exper ience , and p a rt ic ip a tio n in t h i si nves t iga t ion , I be l i eve t h a t t h ~ s i s a r e f e rence

Certa in o f the recorded conversa t ions r e f e r r ed to int h i s Complaint were conducted in Russian. The quota t ions anddesc r ip t ions o f these c onv e rs at io n s a re based on pre l iminaryt r ans l a t ions o f the conver sa t ions , and are sub jec t to rev is ion .9


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to the t e chn i ca l d i f f i cu l t i e s with the l ap top - t o la pto p c ov ert communica ti ons be tween CHAPMAN andRussian Government Off i c i a l #1.

b. CHAPMAN s t a t ed , ~ j u s t need to ge t some morein format ion about you before I can t a l k . " UC-1rep l ied , ~ work in the same department as you,but I work here in th e c on su la te . Okay. My namei s Roman. My name i s Roman, I work in theconsu la te . "

c . UC-1 s t a t ed , ~ T h e r e i s a s itu at io n t ha t I needyour help with tomorrow, which i s why it's notl ike regu la r emai l contac t or websi te con tac t andt h i s could no t wai t un t i l your Wednesdays, youknow." U C - ~ then asked, ~ W h e n was th e l a s tWednesday t h a t you .... So t h i s Wednesday, nowyou wi l l do i t ? " CHAPMAN rep l i ed ~ n o , " buts ta te d th a t it would be ~ n e x t Wednesday."

d. UC-1 s t a t ed , ~ know you are having some problemswith the connect ions . I am not the t echn ica l guy.... I don ' t know how to f ix it, bu t if youtell me, I can pass it up. But , bas i ca l l y I knowyou are going back to Moscow in two weeks.So, ah when you go back they wi l l sit down withyou and t a lk o f f i c i a l l y about your work, yourperformance, ah-but , fo r now I j u s t wanted to seehow you are doing, how every th ing i s going andthen I have a t ask fo r you to do tomorrow."

e . UC-1 then explained , ~ [ T ] h i s i s not l i k e , th i s isnot l ike the Wednesdays with the notebooks, t h i si s d i f f e r en t it i s , it i s the nex t s t ep . You areready fo r the nex t s t ep . Okay?" CHAPMANrep l ied , ~ O k . "

f . UC-1 s t a t ed , ~ T h i s had to ge t done, okay, becauseI wi l l expla in . There i s a person here who i sj u s t l i k e you okay. But, unl ike you, t h i s personi s not here under her r ea l name... So she wasin th e count ry and to do t h a t we have to give hernew documents. Understand? So, I have thedocuments fo r you to give to her tomorrowmorning. Once you do t h a t , once you g ive her thedocument t h a t ' s it." CHAPMAN r ep l i ed , "Okay."UC-1 s t a t ed , ~ S o , I have it. I can show you, butt h i s i s what I mean by next s t ep because t h i s i snot laptop t o . l ap top , t h l s i s person to person .

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She i s j u s t l ike you OK." CHAPMAN then asked," Is she in New York?" UC-1 then asked, "Are youready fo r t h i s s tep?" CHAPMAN r ep l i ed , "Shi t , ofcourse . "

g. UC-1 asked, "So, t e l l me the notebooks? Are youstill having a problem with the notebook? Withth e connect ion?" CHAPMAN rep l ied , "Yes. Ithought you were f ly ing back so it i s a l r i gh t . "UC-1 s t a t ed , "Do you want me . . . wel l [ s ic] cangive it to consula te if you want them to look a tit or you can wait and t ake it home yourse l f toMoscow." CHAPMAN s t a t ed , " I t would be moreconvenient if I gave you it." Late r , in thecourse of the meeting, CHAPMAN provided thelap top computer to DC-1 (he rea f t e r the "Laptop") .Based on my t ra in ing , exper ience , andpa r t i c i pa t i on in t h i s inves t iga t ion , I bel ievet h a t the Laptop i s the computer, which was bese tby t echn ica l d i f f i c u l t i e s and which was used fo rl ap top- to - lap top cover t communications betweenCHAPMAN and Russian Government Off i c i a l #1.

h. UC-1 descr ibed to CHAPMAN where she would need togo the next day a t 11:00 a.m. to meet with theperson descr ibed above in subparagraph ( f ) . UC-1expla ined t h a t the purpose of the meeting wouldbe fo r CHAPMAN to convey a p as sp or t b ea rin g af i c t i t i o u s name ( the "Fraudulent Passpor t " ) . DC1 provided the Fraudulent Passpor t to CHAPMANdur ing the meeting. As he did so , DC-1 s t a t ed :" [ s ]o t h i s i s th e p as sp ort . This i s the person,th i s is not her r ea l name bu t you can c a l l hert h i s name if you wish . Okay, t h i s i s what shelooks l i k e . So, she wi l l come to you, give herthe passpor t and you a re done."

i. UC-1 then s t a t ed , "When you are done, I need youto come back here to t h i s loca t ion . . . so t h a tI know t h a t everything i s okay.... You can ' tsee from here , bu t when I walk ou t there i s ac i t y map . . . . Go to the map a f t e r you aredone. Come up to the map and, I wi l l give youthe th ing , a l l you do i s [p lace a pos ta l ] stamp,a l l you do i s put it on the s id e of the map l i k eyou are looking a t the map . . . . Ju s t come toth e map and put it on the side and then I wi l lcheck it and I wi l l know t h a t every th ing i sokay." .

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j . UC-l th en d es cr ib ed how she (CHAPMAN) wouldre co gn iz e th e person ("1-1") to whom she(CHAPMAN) was to give th e F ra ud ule nt P ass po rt.1-1, UC-l expla ined, "wi l l come to you so , so theway t h a t she wi l l know you i s , you j u s t hold t h i sin your hand l ike t h i s . Ju s t hold it in yourhand and she wi l l come to you." At the t ime t h a tUC-l sa id th i s to CHAPMAN, he (UC-l) provided her(CHAPMAN) with a magazine to hold , so t ha t 1-1would recognize her (CHAPMAN) a t th e meetingwhere the Fraudulent Passpor t was to be handedover .

k. UC-l then s ta ted tha t I - I "wi l l t e l l you . . .' excuse me, but haven ' t we met in Cal i fornia l a s tsummer?' And you wi l l say to her , 'No, I th inkit was the Hamptons." CHAPMAN asked, "TheHamptons?" UC-l s t a t ed , "The Hamptons and tha ti s it. That i s how you know and you j u s texchange, j u s t give her the document [ tha t i s ,the F raudu le nt P a ss po rt ] and then a ft e r th is Ineed you to come back, pu t the stam p and thena f t e r t h i s it i s a l l normal schedule , okay, youcan go back to Wednesday." UC-l then askedCHAPMAN to repeat a l l of h is ins t ruc t ions to her,which CHAPMAN subs tan t i a l ly did . Speci f ica l ly ,CHAPMAN confirmed, "Okay, tomorrow a t 11, I amgoing to be s i t t i ng a t one of the benches, she i sgoing to ask me i f she saw me in Cal i fo rn ia . Iam going to say no, it was in the Hamptons. Iwi l l take the documents, tell her to s ign. Iwi l l hold the j ourna l , t h i s i s how she wi l lrecognize me and I got back and pu t the [posta l ]s tamp."

1 . CHAPMAN-asked, "You're pos i t i ve no one i swatching?" UC-l rep l ied , "You know how long ittook me to ge t here? Three hours . So here I amcomfor table . But when you go, you know, beca re fu l . " Based on my t r a i n ing , exper ience , andpa r t i c ipa t ion in t h i s i nves t iga t ion , I bel ievet h a t CHAPMAN understood " th ree hours" as are fe rence to the t ime t h a t UC-l had spentconducting c i rcu i tous " su rve i l l ance de tec t ionrou t e s , " to insure t ha t he was not beingfol lowed.

m. Toward the end of the meeting, UC-l s t a t ed ," [Y ]ou r c o ll ea gu e s back in Moscow, they know you12


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a r e doing a good job and they w i l l tell you t h i swhen they see you. So keep it up."

21. At approximately 6:00 p.m. , about an hour a f t e rt h e meeting d e s c r i b e d above i n Paragraph 21 concluded, lawenforcement agen ts c onduc ti ng s u r v e i l l a n c e o f ANNA CHAPMAN, thedefendant , observed t h e fo l lowing: CHAPMAN e n t e r e d a CVSPharmacy s t o r e l o c a t e d i n Brooklyn, New York. T h e r e a f t e r ,CHAPMAN e n t e r e d a Verizon s t o r e i n Brooklyn, New York. CHAPMANthen l e f t t h e Verizon s t o r e , e n t e r e d a Rite Aid Pharmacy, andthen r e t u r n e d t o t h e Verizon s t o r e . After CHAPMAN l e f t t h eVerizon s t o r e f o r t h e second t ime, law enforcement agentsobserved t h a t she threw a Verizon bag (the ~ V e r i z o n Bag") i n t ot h e garbage. A f t e r CHAPMAN l e f t t h e v i c i n i t y , law enforcementagents r e t r i e v e d t h e Verizon Bag t h a t CHAPMAN had j u s td i s c a r d e d . I n s i d e t h e bag, t h e agents found t h i fol lowingi tems, among o t h e r s :

a . The Verizon Bag conta ined a customer agreementf o r t h e purchase o f a Motorola c e l l p h o n e . Thecustomer agreement was i n the name o f ~ I r i n eKutsov," and i n d i c a t e d a customer address o f "99Fake S t r e e t . "

b. The Verizon Bag a l s o conta ined t h e packaging f o ra ~ T r a c f o n e " c a l l i n g card , and f o r a Verizonc a l l i n g c a r d . Based on my t r a i n i n g ande x p e r i e n c e , and my involvement i n t h i si n v e s t i g a t i o n , I know t h a t both o f t h e s e c a l l i n gcards may be used t o make i n t e r n a t i o n a l c a l l s .

c . The Verizon Bag a l s o conta ined an unopenedc ha rg in g d ev ic e f o r the Motorola c e l l p h o n ei n d i c a t e d on t h e cus tomer agreemen t .

.22. Based on t h e foregoing o b s e r v a t i o n s by t h es u r v e i l l a n c e a g e n t s , as w e l l as my t r a i n i n g , e x p e r i e n c e , andp a r t i c i p a t i o n i n t h i s i n v e s t i g a t i o n , I b e l i e v e t h a t ANNACHAPMAN, t h e defendant , fo llowin g h er meeting with UC-l, e n t e r e da s e r i e s o f s t o r e s t o av oid b ein g followed o r s u r v e i l l e d . Ont h e s e same b a s e s , I b e l i e v e t h a t her use o f a f a l s e name andaddress i n t h e customer agreement form, as wel l as h e r throwingo f t h e cellphone c h a r g e r , suggest t h a t CHAPMAN was seeking t ouse the Motorola ce l lphone only t e m p o r a r i l y so as t o avoidd e t e c t i o n o f her c o n v e r s a t i o n s .

2 3 On June 27, 2010, ANNA CHAPMAN, t h e defendant ,d i d n ot appear a t t h e d e s i g n a t e d t ime a t t h e l o c a t i o n agreedupon i n t h e meeting with UC-l.

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VI. MIKHAIL SEMENKO'S JUNE 26 , 2010 MEETING WITH AN UNDERCOVERAGENT POSING AS A REPRESENTATIVE OF THE RUSSIAN GOVERNMENT

24. On or about June 26, 2010, an FBI undercoveragent ( " U C - 2 ' ~ ) , who was posing as an agent of the RussianGovernment, placed a ca l l to MIKHAIL SEMENKO, the defendant , a ta ce l lu l a r te lephone number used by SEMENKO. That ca l l wasrecorded pursuant to jud ic ia l au thor iza t ion . At the beginningof th e con versa t ion , UC-2 asked SEMENKO, "could we have met inBei j ing in 2004?" SEMENKO responded, "Yes, we m ight hav e, bu t Ibel ieve it was in Harbin." UC-2 and SEMENKO th en a rra ng ed tomeet a t approximately 7:30 p.m. near the in te rsec t ion of lothSt ree t N.W., and H St ree t N.W. in Washington, D.C. (The"Washington St ree t Corner") . During the conversa t ion, which wasrecorded by a hidden device, UC-2 asked SEMENKO whether SEMENKOremembered " the s ign ," and SEMENKO responded t h a t he did . Basedon my t r a i n ing , exper ience, and pa r t i c i pa t i on in t h i si nves t iga t ion , I bel ieve t h a t SEMENKO was af f i rming t h a t heremembered what objec t he was supposed to ca r ry during any in -person meet ing with an SVR opera t ive in order to allow theopera t ive to i den t i fy SEMENKO.

25. At approximately 7:28 p.m. on June 26, 2010, UC-2saw MIKHAIL SEMENKO, the defendant , a t the Washirigton St ree tCorner. SEMENKO stood a t the Washington St ree t Corner fo rapproximately two minutes before UC-2 walked up to him. Themeeting between UC-2 and SEMENKO was recorded by a hiddenrecording device worn by UC.:...2. Afte r UC-2 approached SEMENKO,UC-2 r epea ted the phrase t h a t he had used dqring the te lephoneconversa t ion e a r l i e r tha t day, asking SEMENKO whether the tw omen could have met in Beij ing during 2004. SEMENKO againresponded t h a t it was poss ib le , but t h a t the meeting had been inHarbin. UC-2 and SEMENKO then exchanged greet ings in Russianand walked t o g e t h e ~ to a nearby park ( the "Washington Park") .In the Washington Park, UC-2 ~ n SEMENKO sa t t oge the r on a p ~ r kbench where they t a lked to one another fo r approximately 30minutes . Among o the r things, UC-2 and SEMENKO had the fol lowingdi scuss ions :

a . UC-2 to ld SEMENKO t h a t he wanted to d i scussSEMENKO's at tempted communication a t theRestauran t on June 5, 2010. UC-2 to ldSEMENKO t h a t UC-2 b elie ve d th e communicationat tempt had no t been s ucc es sfu l, to whichSEMENKO responded " I got mine." SEMENKOfu r ther expla ined t h a t equipment he had beenusing fo r the commun icat ion hada u toma ti ca ll y tu rn ed i t s e l f o ff a t the end

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o f t h e communications s e s s i o n , which SEMENKOs t a t e d was a s i g n t h a t t h e 'communication wass u c c e s s f u l . SEMENKO f u r t h e r e x p l a i n e d t h a t ,when he t u r n e d t h e equipment on again a f t e rit had s h u t down, he ~ s a w t h e s t u f f [he]r e c e i v e d , " and a l s o s a i d t h a t when ' thecommunication went through he was ~ l i k e .. t o t a l l y happy."

b . UC-2 asked SEMENKO whether he had seen "ouro f f i c e r " dur ing t h e June 5, 2010 at temptedcommunicat ions. SEMENKO responded, "no, Iam not supposed t o look, though - I 'm notsupposed t o be looking o u t . "

c . UC-2 asked SEMENKO t o d e s c r i b e t h e s t e p sSEMENKO took during t h e June 5, 2010a t t e m p t e d communicat ion. SEMENKO explainedt h a t he had p o s i t i o n e d h i s communicat ionsequipment so t h a t it was "open" and so t h a tit was f a c i n g " t h e r i g h t d i r e c t i o n . "SEMENKO f u r t h e r s t a t e d t h a t , p r i o r t o t h ecommunicat ion, he r e s t o r e d h i s equipment t o" d e f a u l t s e t t i n g s , " which SEMENKO expla inedwas n e c e s s a r y if SEMENKO had "used [ theequipmsnt f o r [ h i s o f f i c e ] . " In d e s c r i b i n ghow he p r e p a r e d d a t a f o r t r a n s m i s s i o n v i at h e ad hoc network, SEMENKO s t a t e d , " I j u s tc r e a t e t h e f i l e , Zip it .... "

d. UC-2 asked SEMENKO who had t r a i n e d SEMENKOt o use h i s communi ca ti ons equipmen t asd e s c r i b e d above, and SEMENKO responded, " t h eCenter guys, t h e Center g u y s . " L a t e r i n t h ec o n v e r s a t i o n , UC-2 asked SEMENKO how mucht ime SEMENKO had s p e n t i n t h e " C e n t e r , " andSEMENKO responded, "ahh ... a week." WhenUC-2 i n d i c a t e d t h a t he was s u r p r i s e d t h a tSEMENKO could have been t r a i n e d on h i scommunicat ions equipment i n only one week,SEMENKO responded t h a t he had p r e v i o u s l yr e c e i v e d an a d d i t i o n a l tw o weeks o ft r a i n i n g .

e . SEMENKO and UC-2 a l s o d i s c u s s e d t h e s a f e t yo f SEMENKO's communicat ions equipment.S p e c i f i c a l l y , UC-2 t o l d SEMENKO t h a t , " a sf a r as t h e computer goes , [he should] bec a r e f u l with it, [because] it i s very

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sens i t ive . u SEMENKO responded t h a t he knewthe equipment was sens i t ive , and t h a t he wasbeing ca re fu l with it. In response to aques t ion from UC-2 about how he was keepingh is communications equipment s a fe , SEMENKOresponded t h a t he did not have anyth ing t h a tlooked susp ic ious , and t h a t he (SEMENKO) wasth e only person using the communicationsequipment . SEMENKO fu r the r s t a t ed t ha t theone o th er th in g he had was "a book,b as ic al l y l ik e othe r books ." Based on myt r a in ing , exper ience, and par t i c ipa t ion int h i s inves t iga t ion , I be l ieve t h a t SEMENKOwas say ing t h a t there was noth ing suspic iousabout th e outward appearance of h iscommunica tions equipment, and t h a t th e onlyothe r i tem he possessed fo r t h a tcommunication was a book, which was l a rge lyi nd i$ t ingu i shab le from othe r books .

f . UC-2 asked SEMENKO what he would do with h iscommunications equipment if "something goesdown. u SEMENKO responded t h a t he woulde rase the hard dr ive of the communicationsequipment . Based on my t r a in ing ,experience , and p a rt i ci pa tio n in t h i si nves t i ga t i on , I be l ieve t h a t SEMENKO wassaying t h a t , if he were sub jec ted toscru t iny by law-enforcement or in t e l l igencepersonnel , he would e rase th e hard dr ive ofthe communications equipment.

g. UC-2 asked SEMENKO about th e p re -a rr an ge dmeet ing places t h a t SEMENKO had within theUnited Sta t e s fo r use when SEMENKO rece iveda pa r t i cu l a r s igna l . SEMENKO responded t h a th is only meeting place fo r such occas ionswas the Russian Consulate in New York City .SEMENKO fu r the r explained t h a t , al though theWashington St ree t Corner had been proposedas a po t en t i a l meeting s i t e , it had neverbeen approved - presumably by Center .

26. Afte r th e discussions descr ibed above, UC-2handed SEMENKO a folded newspaper i ns ide which an envelopeconta in ing $5,000 in cash was concealed. UC-2 to ld SEMENKO,"There i s an envelope in th e re ; t he re i s money in it. The moneyhas to go to a park in Arl ing ton tomorrow. It has to be t he rebetween 11:00 a.m. and 11:30 a.m. U SEMENKO then asked UC-2 fo r16


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a d es cr ip tio n o f the loca t ion where the money was to bedel ivered, and UC-2 gave SEMENKO a map which showed thelo ca tio n, in clu din g information about a pa r t i cu la r spotunderneath a bridge where SEMENKO was to de l ive r and hide themoney ( the "Drop Si t e " ) . Af te r SEMENKO ind ica ted t h a t he hadmemorized the informat ion from the map, he gave it back to UC-2to be des troyed.

27. At the end of the June 26, 2010 meeting betweenUC-2 and SEMENKO, UC-2 asked SEMENKO whether he had any l a s tconcerns . SEMENKO responded t h a t he wanted UC-2 to " f igure out"the problem with the communications v ia the p r iva t e wire lessnetwork. The meet ing concluded with SEMENKO asking UC-2 whetherhe was now going to repor t the communications problem to "them."

28. On or about June 26, 2010, the FBI i n s t a l l edvideo su rve i l l ance cameras in the vic in i ty of the Drop Si t e .The footage recorded by those cameras r e f l e c t s the fol lowing:a . At approximately 11:00 a .m. , MIKHAIL

SEMENKO, the defendant , approached the areaof the Drop Si te by crossing over the br idgeunderneath which the Drop Si t e i s loca ted .SEMENKO's face i s c l ea r l y vi s ib l e in thefootage from one of the cameras, and SEMENKOcan also be seen carrying a white bag.

b. Video footage recorded a t approximately11:06 a.m. shows SEMENKO removing from thewhite bag the newspaper conceal ing anenvelope conta ining $5,000 t h a t UC-2 hadgiven to SEMENKO th e p rev io us day. Thatfootage also shows SEMENKO plac ing thenewspaper in the Drop Si t e .

c . At approximately 11:07 a .m. , SEMENKO i s seenfo r the l a s t t ime on th e v id eo fo ota ge fromthe vic in i ty of the Drop Si t e . The footagedoes not r e f l e c t SEMENKO leav ing the area bycross ing back over the br idge on which hehad or ig ina l ly arr ived .

29. At approximately 11:50 a .m. , FBI a ge nts s ea rc hin gthe Drop Si t e recovered the newspaper t h a t MIKHAIL SEMENKO, thedefendant , had ,p laced t he re , and which UC-2 had given to SEMENKOthe previous day. When the agents opened the newspaper, theyfound it to c on ta in th e envelope conta in ing $5,000 t h a t had beenin sid e the newspaper when UC-2 had given it to SEMENKO theprev ious day.

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WHEREFORE, deponent prays t h a t a warran t be issued fo rthe a r r e s t s of ANNA CHAPMAN and MIKHAIL SEMENKO, th e defendants ,and t h a t they be a r re s t ed and imprisoned, or ba i l ed , as th e casemay be.

S w o ~ to before me th i s""l...1 day of June, 2010~ NITED STATES MAGISTRATE JUDGE

SOUTHERN DISTRICT OF NEW YORK

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Approved, 1h..-eU- ' - " ' ~MICHAEL FARBIAR GLEN KOPP/JASON SMITHAss i s t an t United Sta t e s AttorneysKATHLEEN KED IANTr i a l At to rney , Coun te re sp ionage Sect ion ,Nat ional Secur it y D iv is ion , Department of Ju s t i ce

Before : HONORABLE JAMES L. COTTUnited Sta tes Magis t r a t e JudgeSouthern Dis t r i c t of New York- - - - - - - - - - x

UNITED STATES OF AMERICA-v . -

DEFENDANT #1,a /k / a "Chr is topher R. Metsos ,"DEFENDANT #2,a /k / a "Richard Murphy,"DEFENDANT #3,a /k / a "Cynthia Murphy,"DEFENDANT #4,a /k / a "Donald Howard Heathf i e ld , " :DEFENDANT #5,a /k / a "Tracey Lee Ann Foley ,"DEFENDANT #6,a /k / a "Michael Zot to l i , "DEFENDANT # 7 ,a /k / a "Pa t r i c i a Mills , "DEFENDANT #8,a / k / a " J u a n Lazaro , " andVICKY PELAEZ,

Defendants .- - - x

SOUTHERN DISTRICT OF NEW YORK, s s . :

SEALEDCOMPLAINTViola t ions of18 U.S.C. 371,1956

COUNTY OF OFFENSE:NEW YORK

MARIA L. RICCI, being du ly sworn, deposes and sayst h a t she i s a Spec ia l Agent with the Federa l Bureau ofInves t iga t ion ("FBI") and charges as fol lows:


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COUNT ONE

Conspi racy to Act as Unregis te red Agents of a Fore ign Government1. From in o r about the 1990s, up to and i nc lud ing

the -p r e sen t , in the Southern Di s t r i c t of New York and el sewhere ,DEFENDANT #1, a /k / a "Chr is topher R. Metsos ," DEFENDANT #2, a / k / a"Richard Murphy," DEFENDJl..NT #3, a /k / a "Cynthia Murphy," DEFENDJl.NT#4, a / k / a "Donald Howard Heathf ie ld ," DEFENDANT #5, a /k / a "TraceyLee Ann Foley ," DEFENDANT #6, a /k / a "Michael Zot to l i , " DEFENDANT#7, a / k / a "Pa t r i c i a Mil l s , " DEFENDANT #8, a / k / a "Juan Lazaro ,"and VICKY PELAEZ, the defendant s , and o the r s known and unknown,un lawfu l ly , wi l l fu l l y and knowingly , d id combine, conspire ,confede ra t e , and agree toge the r and with each o the r to commit ano ffe ns e a ga in st th e United S ta te s , to wi t , to v io l a t e Sec t ion 951o f Ti t l e 18, United S t a t e s Code.

2. It was a pa r t and an ob jec t of the consp iracy t ha tDEFENDANT #1, a /k / a "Chr is topher R.Me t so s , " DEFENDANT #2, a /k / a"Richard Murphy," DEFENDANT #3, a /k / a "cynth ia Murphy," DEFENDANT#4, a / k / a "Donald Howard Hea th f ie ld , " DEFENDANT #5, a /k / a "TraceyLee Ann Foley," DEFENDANT #6, a /k / a "Michael Zot to l i , " DEFENDANT#7, a /k /a " Pa tr ic ia Mil l s , " DEFENDANT #8, a /k l a "Juan Lazaro ,"and VICKY PELAEZ, t he d ef en da nts , and o ther s known and unknown,un lawfu l ly , wi l l fu l l y and knowingl y, would and d id ac t in th eUnited S t a t e s as agents of a fo re ign government, sp e c i f i c a l l y th eRuss ian Federa t ion , without p r i o r no t i f i c a t i on to th e A tto rn eyGenera l , a s required by law, in v io la tio n of Ti t l e 18, Uni tedS ta t e s Code, Sec t ion 951.

(T i t l e 18, United S t a t e s Code, Sec t ion 371. )COUNT TWO

Conspi racy to Commi t Money Launder ing3 . From in o r about the 1990s, up to and inc lud ing

th e p re sen t , in th e Southern Di s t r i c t of New York and e lsewhere ,DEFENDANT #1, a /k / a "Chr is topher R. Metsos ," DEFENDANT #2, a /k / a"Richard Murphy," DEFENDANT #3, a / k / a "Cynthia Murphy," DEFENDANT#4, a /k / a "Donald Howard Hea th f ie ld , " DEFENDANT #5, a / k / a "TraceyLee Ann Foley ," DEFENDANT #6, a / k / a "Michael Zo t t o l i , " DEFENDANT#7, a / k / a "Pa t r i c i a Mil l s , " DEFENDANT #8, a /k / a "Juan Lazaro , "and VICKY PELAEZ, t he d ef en da nts , and o the r s known and unknown,un lawfu l ly , wi l l fu l l y and knowi ng ly d id combine, conspire ,con fede ra te and agree toge the r and with each o th e r to v io l a t eSec t ions 1956 (a) (1 ) (A) ( i) and 1956 (a) (1) (b) ( i ) o f T i t l e 18 ,Uni ted S ta t e s Code.

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4. It was a pa r t and an objec t of the conspi racy t ha tDEFENDANT #1, a/Kia ~ C h r i s t o p h e r R. Metsos," DEFENDANT #2, a /Kia~ R i c h a r d Murphy," DEFENDANT #3, a /Kia "Cynthia Murphy," DEFENDANT#4, a/Kia "Donald Howard Hea thf ie ld , " DEFENDANT #5, a /Kia ~ T r a c e yLee Ann Foley," DEFENDANT #6, and a /Kia ~ M i c h a e l Zo t to l i , "DEFENDANT #7, a /Kia ~ P a t r i c i a Mil l s , " DEFENDANT #8, a /Kia "JuanLazaro," and VICKY PELAEZ, t he d ef en da nts , and othe rs known andunknown, in an of fense involving and a f f ec t i ng i n t e r s t a t e andfore ign commerce, knowing tha t the proper ty involved in ce r t a inf in a n cia l t ra n s ac ti on s , to wit , t r an s fe r s of thousands of do l l a r sin cash, de l i ve ry of Automated Te l l e r Machine ("ATM") ca rds , andthe purchase and ren ta l of res idences , among o th er th in gs ,r epresen ted the proceeds of some form o f unlawful a c t i v i t y ,unlawful ly, wi l l f u l l y and knowingly, would and d id co nd uct an dat tempt to conduct such f in a n ci al t ra n s ac ti on s which in f ac tinvolved th e proceeds o f spec i f i ed unlawful ac t iv i ty , to wit ,fe lony v io l a t i on s of the Foreign Agents Regis t ra t ion Act of 1938,Ti t l e 22, United Sta te s Code, Sec t ions 612(a) and 618, with thein ten t to promote the car rying on o f th e spec i f i ed unlawfulac t iv i ty , in v io l a t i on of Ti t l e 18, United Sta tes Code, Sec t ion1956 (a) (1 ) (.p..) ( i) .

5. It was also a pa r t and an objec t of the conspi racyt h a t DEFENDANT #1, a/Kia ~ C h r i s t o p h e r R. Metsos," DEFENDANT #2,a/Kia ~ R i c h a r d Murphy," DEFENDANT #3, a /Kia ~ C y n t h i a Murphy,"DEFENDANT #4, a/Kia "Donald Howard Heathf ie ld , l J DEFENDANT #5,a/Kia "Tracey Lee Ann Foley, II DEFENDANT #6, a /k / a "MichaelZot to l i , " DEFENDANT #7, a /k / a ~ P a t r i c i a Mills , " DEFENDANT #8,a/Kia "Juan Lazaro , " and VICKY PELAEZ, t he d ef en da nt s, and o ther sknown and unknown, in an o ff en se i nv o lv in g and a f f ec t i ngi n t e r s t a t e and fore ign commerce,knowing t h a t th e proper tyinvolved in c er ta in f inanc ia l t r ansac t ions , to wit , t r a n s f e r s ofthousands o f do l l a r s in cash, del ivery of ATM cards , and th epurchase and r en ta l of res idences , among o th er th in gs ,r ep re se nte d th e proceeds of some form of unlawful a c t i v i t y ,unlawful ly , wi l l f u l l y and knowingly, would and did conduct andat tempt to conduct such f in a n ci al t ra n sa c ti on s which in f ac tinvolved th e proceeds of spec i f i ed unlawful ac t iv i ty , to wit ,fe lony v io l a t i on s of the F ore ign Agents Regis t ra t ion Act o f 1938,Ti t l e 22, United Sta te s Code, Sec t ions 612(a) and 618, know ingt h a t th e t r an sac t i on s were des igned in whole and in p a r t toconceal and d i sgu i se th e natu re , the lo ca tion , th e source , th eowners hip a nd th e control of th e proceeds of spec i f i ed unlawfula c t i v i t y , in v io la tio n of Ti t l e 18, United Sta tes Code, Sec t ion1956 (a) (1 ) (B) ( i) .(Ti t le 18, Uni ted Sta te s Code, Sec t ions 1956(a) (1 ) and 1956(h) . )

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The bases fo r my knowle dge a nd the foregoing chargesare , in pa r t , as fol lows:

6. I have been a Spec ia l Agent with the FBI fo rapproximate ly e igh t years . Cur ren t ly , I am assigned to theCoun te r in te l l igence Divis ion with in the New York Field Off ice o fthe FBI. The focus of my coun te r in t e l l i gence e f fo r t s has been onthe fore ign in te l l igence ac t i v i t i e s of the Russian Federa t ion . Ihave le arn ed th e facts conta ined in t h i s Complaint from, amongo th er s ou rc es, my personal pa r t i c i pa t i on in t h i s inves t iga t ion ,my d iscus s ions with o the r law-enforcement a ge nt s, s ea rc he s t h a t Ihave conducted, survei l lance t h a t I hav e condu ct ed , and my reviewof documents, video and audio record ings , and o the r ev iden t ia rymater i a l s . Because th i s Complaint i b ein g s ubm itt ed fo r thel imi ted purpose of es t ab l i sh ing probable cause, it does no tinclude every f ac t t ha t I have lea rned during the course of t h i sinves t iga t ion . Fur ther , any s ta tements r e la ted here in arere la te d in subs tance and in pa r t only .

INTRODUCTION

THE "ILLEGALS" PROGRAM7. The FBI has conducted a mul t i - yea r i nve s t i ga t i onof a network of United States-based agents of the fore igni n t e l l igence organ of the Russian Federa t ion ( the "SVR"). 1 Thet a rge t s of the FBI ' s i nves t iga t ion i nc lu de c ov ert SVR agents whoassume f a l s e i d en t i t i e s , and who are l i v ing in the United S ta t e son long- te rm, "deep-cover" ass ignments . These Russian s ec r e tagents work to hide a l l connect ions between themselves andR uss ia , even as they ac t a t the d i r e c t i on and under the cont ro l

of the SVR; th ese s ec re t agents a re t yp ica l ly ca l led " i l l ega l s . "8. " I l l ega l" agents of th e SVR genera l ly r ece ive

extens ive t r a in ing before coming to the United Sta tes . Thist r a in ing has t yp i ca l l y fo cu se d on, among other th ings : foreignlanguages; agen t - to - agen t communications, inc luding the use ofbrush-passes;2 shor t -wave rad io opera t ion and i nv i s ib l e wri t ing ;the use of codes and c ip he rs , i nc lu d in g the use of encrypted

The SVR headquarters in Moscow i s known as "MoscowCenter" o r "Center . "

2 A b ru sh -p as s (a lso knownc landes t ine , hand- to-hand de l iveryone person walks pas t another in a

4

as a " f l ash meeting") i s theo f i tems o r payments - made aspubl ic p lace .


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Morse code messages; the crea t ion and use of a cover pro fess ion ;coun te r - su rve i l l ance measur es ; concealment and des t ruc t ion ofequipment and mater ia ls used in connection with t h e i r work asagents ; and the avoidance of de tec t ion dur ing t h e i r work asagents .

9. Upon complet ion of t h e i r t r a in ing , Russian i l l e ga lagents are genera l ly provided with new - f a l se - i d en t i t i e s ; ani l l e g a l ' s fa l se iden t i ty i s re fe r red to as h is " legend ." Thec or ne rs to ne s o f an i l l e g a l ' s "legend" are fa l se documents. Thesefa l se documents concern, among other th ings , the i d en t i t y andc i t i zensh ip of the i l l ega l . Through the use of these f raudulen tdocuments, i l l ega l s assume i d en t i t i e s as c i t i zens o r l ega lr es iden ts of the coun t r i es to which they are deployed, includ ingthe United Sta t e s . I l l ega l s wi l l sometimes pursue degrees a tt a rge t - count ry un ive r s i t i e s , obta in employment, and j o in r e levan tp r of es si ona l a s so c i at ion s ; these ac t i v i t i e s deepen an i l l ega l ' s"legend." I l l ega l s of ten opera te in pa i r s - being placedtoge the r by Moscow Center while in Russia , so t h a t they can l i v et oge ther and work together in a host count ry , under the guise ofa married couple . I l l eg a l s who are placed t oge ther and co-hab i tin th e c ou ntry to which they are ass igned wi l l of ten havec h il dr en t og e th e r; t h i s fu r the r deepens an i l l e g a l ' s " legend ."

10. The FBI 's i nve s t i ga t i on has revealed t h a t anetwork of i l l ega l s ( the " I l l ega l s" ) i s now l i v ing and opera t ingin the United S ta t e s in the se rv ice of one primary, long-termgoal : to become su f f i c i en t ly "Americanized" such t h a t they canga ther in format ion about the United Sta tes fo r Russia , and cansuccess fu l ly r ec ru i t sources who are in , or are ab le toi n f i l t r a t e , Uni ted Sta tes policy-making c i r c l e s .

11. The SVR has spe l led out the purpose of theI l l e ga l s ' presence in America in a 2009 message to DEFENDANT #2,a /k / a "Richard Murphy" and DEFENDANT #3, a /k / a "Cynthia Murphy,"the defendants . That message, which was sen t by Moscow Center ,has been decrypted by the FBI and reads , in p ar t , as fo l lows :

You were sen t to USA fo r long-term service t r i p . Youreduca t ion , bank accounts, car , house e tc . - a l l theseserve one goa l : f u l f i l l your main miss ion , i . e . tosearch and develop t i e s in pol icymaking c i r c l e s in USand send i n t e l s [ in te l l igence repor ts ] to C[enter] .

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!h . THE DEFENDANTS312. CHRISTOPHER R. METSOS, the defendant , purports tobe a Canadian c i t i zen . FBI inves t iga t ion has revealed t ha t

METSOS does no t re s ide in the United Sta t e s . However, METSOShas , in the pas t , t r ave led to the United Sta tes r egu la r ly , andhas met a t l e a s t one of the o ther defendants on numerousoccasions in New York Ci ty .

13. RICHARD MURPHY, the defendant , purpor ts to be aUnited Sta tes c i t i zen , born in Ph i l ade lph ia , Pennsylvania .RICHARD MURPHY i s married to CYNTHIA MURPHY, the defendant ;CYNTHIA MURPHY purpor t s to be a United Sta t e s c i t i zen , born inNew York, New York under the name UCynthia A. Hopkins. H RICHARDM p R P ~ Y ~ p CYNTBIA MURPHY ( co l lec t ive ly , the UNew JerseyConspirators H ), p re vi ou sly l iv e d toge the r in Hoboken, New Je r seyin an apar tment (UHoboken Apartment"); s ince the f a l l of 2008,they have l i ved in a house in Montcla i r , New Jersey (UMontclairHouse H ) . The New Jersey Conspi ra tors have l i ved in the UnitedSta tes s ince th e mid-1990s.

14. D O N ~ ~ D HOWARD HEATHFIELD, the defendant , purpor tsto be a na tura l i zed United Sta tes c i t i zen , born in Canada.HEATHFIELD i s marr ied to TRACEY LEE ANN FOLEY, the defendant , whopurpor ts to be a na tura l ized United Sta tes c i t i z en , born inCanada. HEATHFIELD and FOLEY (co l l ec t ive ly , the UBostonConspirators H ) l i ve together near Boston, Massachuset t s . Unt i lt h i s month, HEATHFIELD and FOLEY had long l ived in a townhouse(UBoston Townhouse"). HEATHFIELD and FOLEY have l ived in theUnited Sta tes s ince 1999.

15. MICHAEL ZOTTOLI, the defendant , purpor ts to be aUnited Sta tes c i t i zen , born in Yonkers, New York. ZOTTOLI i smarr ied to PATRICIA MILLS, the defendant , who purpor ts to be aCanadian c i t i zen . ZOTTOLI and MILLS ( co l l e c t i ve ly , the USeat t leConspi ra tors") , have l ived together over the year s in a number ofl oc at io ns , in cl ud in g in a Sea t t l e , Washington apartment (uSeat t leApartm ent"). D uring October 2009, ZOTTOLI and MILLS moved fromSea t t l e to an apar tment in Arl ington, Virg in ia (uArl ingtonApartment") . ZOTTOLI has l ived in the United Sta tes s ince 2001,

For ease of re fe rence , each of the defendants , with theexcept ion of VICKY PELAEZ, i s r e f e r r ed to here ina f t e r by the nameby which he o r she i s known in the United Sta t e s , as i f t ha tassumed name were t he d ef en da nt 's t rue name. For example,DEFENDANT #1, a / k / a "Christopher R. Metsos , " the defendant , i sre fe r red to he r e i n a f t e r as CHRISTOPHER R. METSOS, the defendant .

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and MILLS has l ived in the United Sta tes s ince 2003.16. JUAN LAZARO, th e d ef en da nt, purpor ts to be a

c i t i zen of Peru, born in Uruguay. LAZARO i s marr ied to VICKYPELAEZ, the defendant , who i s a United Sta tes c i t i zen born in Peru. LAZARO and PELAEZ, ( co l lec t ive ly , the "YonkersConspira tors") , l i ve toge ther in Yonkers, New York in a house("Yonkers House") . LAZARO and PELAEZ have each l iv ed in theUnited S ta t e s fo r o ve r tw en ty year s .

17. I am aware t ha t f edera l law r eq ui re s in d iv id ua lswho are ac t ing as agents fo r fo re ig n governments to not i fy theAt to rn ey Gene ra l of the United Sta t e s . The Department of Jus t i c e("DOJ") mainta ins f i l e s of a l l i nd iv idua l s who have reg i s t e red asagents of foreign governments. A recent ly-conducted review ofDO J fi le s in dic ate s th at none of th e d ef en da nts enumerated in thei ns t an t Complaint has ever not i f i ed the DOJ t ha t he or she i s anagent of th e Russian Federa t ion .

THE INVESTIGATION18. In the course of i nve s t i ga t i ng the ac t i v i t i e s in

the United s t a t e s of th e d ef en da nts , th e FBI has used a var ie tyof i nves t iga t ive methods. For ex ample, the FBI, ac t ing pursuantto j ud i c i a l order s , has conducted extens ive e lec t ron icsurve i l l ance of the defendants - includ ing the cover t placemento f m i cr ophone -t yp e l i s t en ing devices in ce r t a i n of thedefendants ' res idences ; the cover t placement of video cameras inpubl ic l oca t i ons and in hotel rooms; and the monitor ing andrecording of the phone ca l l s and e -m ai ls o f ce r t a in of thedefendants . In addi t ion , and among o the r t h ings , the FBI has ,pursuant to j u d i c i a l orders , conducted numerous searches . Forexample, th e FBr has su r r ep t i t i ous l y en te red ce r t a in of thedefendants ' r es idences ; photographed evidence and copiede l ec t r on i c media while i n s ide ; and then l e f t th e re sid en ce inques t ion . This Complaint descr ibes evidence obta ined in thecourse of ce r t a i n of these j ud ic ia l ly -au thor ized c landes t iner e s iden t i a l searches - in pa r t i cu l a r , searches t ha t wereconducted a t th e Boston Townhouse, on or about Ju ly 29, 2006("2006 Boston Search") ; the Sea t t l e Apartment , on or aboutFebruary 17, 2006 ("2006 Sea t t l e Search") i and the HobokenApartment, on or about JUly 27, 2005 ("2005 New Jersey Search")

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I I . OVERT ACTS IN FURTHERANCE OF THE CONSPIRACy419. I n f ur th e r an c e of t h e conspiracy and t o e f f e c t the

i l l e g a l o b j e c t s t h e r e o f , t h e fol lowing o v e r t a c t s , among o t h e r s ,were committ ed i n t h e Southern D i s t r i c t of New York andelsewhere:

a . On o r about January l 4 , 2000, i n a South Americancountry, VICKY PELAEZ, t he d ef en da nt, r e c e i v e d apackage c o n t a i n i n g money from a r e p r e s e n t a t i v e oft h e Russian government.

b. On o r about May l 6 , 2004, i n Queens, New York,CHRISTOPHER METSOS, t h e defendant , r e c e i v e d a bag,c o n t a i n i n g money, from an o f f i c i a l a s s o c i a t e d witht h e Manhattan-based Permanent Mission o f theRussian F e d e r a t i o n t o t h e United Nations (URussianMission") .

c . On o r about. June 20, 2004, i n Manhat.tan, New York,RICHARD MURPHY, t.he defendant , met with MICHAELZOTTOLI, t h e defendant , and gave him (ZOTTOLI)money t h a t he (MURPHY) had r e c e i v e d from METSOS.d. On o r about September 23, 2004, i n Hoboken, New

J e r s e y , CYNTHIA MURPHY, t h e d efe nd an t, a dv is edRICHARD MURPHY, as t o how he could e f f e c t i v e l yg a t h e r information i n t h e United S t a t e s f o rp r o v i s i o n t o Moscow Center .

e . During 2004, DONALD HOWARD HEATHFIELD, t h edefendant , met with an employee o f t h e UnitedS t a t e s Government with r e g a r d t o n u c l e a r weaponsr e s e a r c h .

f . On o r about October 3, 2004, T P ~ C E Y LEE ANN FOLEY,t h e defendant , d i s c u s s e d with HEATHFIELD a methodf o r sending s e c r e t messages t o Moscow Center .

g. On o r about June 8, 2006, PATRICIA MILLS, t h edefendant , t r a v e l e d t o t h e v i c i n i t y of wurtsboro,New York, with ZOTTOLI, where ZOTTOLI dug up apackage c o n t a i n i n g money t h a t had been b u r i e d i nt h e ground by METSOS.

4 The conspirac ies charged in Count One and Count Two arer e f e r r e d t o h e r e in a f t e r c o l le c t i v e l y a s uthe c o n s p i r a c y . "8


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h. On o r about August 25, 2007, JUAN LAZARO, thedefendant , in a South American c ou ntr y, re ce iv ed apackage conta in ing money from a r epresen ta t ive ofthe Russ ian government.

i . On o r about September 26, 2009, in Brooklyn, NewYork, RICHARD MURPHY gave MICHAEL ZOTTOLI moneyt h a t he (MURPHY) had received from an o f f i c i a lassoc ia ted with the Russian Mission.

I I I . MEANS AND METHODS OF THE CONSPIRACYSECRET COMMUNICATIONS20. To f u r t he r the aims of the conspiracy , MoscowCenter has arranged fo r the defendants c la n de st in e ly t ocommunicate with the Russian Federa t ion . In pa r t i cu l a r , the

conspi ra tors have used , among o ther s , the s e c r e t communicationsmethods descr ibed below - steganography and rad iograms.1 . STEGANOGRAPHY21. Steganography i s the process of sec re t ing data inan image. Moscow Center uses s teganograph ic sof tware t h a t i s notcommercial ly ava i l ab l e . The sof tware package permi t s th e SVR

c landes t ine ly to i n s e r t encrypted data in images t h a t a re loca tedon pub l i c ly - ava i l ab l e webs i tes without the da ta be ing v i s ib l e .The encrypted da ta can be removed from the image, and thendecryp ted , us ing SVR-provided sof tware . S imi l a r l y , SVR-providedsof tware can be used to e nc ry pt d at a, and then c l andes t i ne ly toembed the da ta in images on publ ic ly -ava i lab le webs i t es .

22. As i s s e t fo r th below, ce r t a i n o f th e I l l ega l shave communicated with Moscow Center by means o f s teganography.In each of the t h re e j u d ic ia ll y -a u th o r iz e d r e s i d en t i a l searchesre fe renced above ( the 2006 Boston Search, th e 20'06 Sea t t l eSearch, and the 2005 New Je r sey S ea rc h) , la w -e nf or ce m en t agentsobserved and f o r ens i c a l l y copied a se t of computer d i sks("Password-Pro tec ted Disks" ) . Based on subsequent i nve s t i ga t i ona s d esc rib ed below, I b eliev e th at the Password-Pro tec ted Diskscontain a s teganography program employed by th e SVR and theI l l eg a l s .

THE NEW JERSEY CONSPIRATORS23. During th e 2005 New Je r sey Search , l aw-enforcement

agents observed and photographed a piece of paper ; the pape r said"a l t , " "cont ro l , " and "e ," and s e t for th a s t r i n g of 279


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charac te r s . Using these 27 characters as a password, t echnicianshave been able s uc ce ss fu ll y t o access a sof tware program("Steganography Program") s tored on th os e c op ie s of the PasswordProtec ted Disks t ha t were recovered during the 2005 New JerseySearch and a t subsequent searches of the New J e rs e y Con sp ir at or s'r es idence .

24. In the course of the 2005 New Jersey Search , lawenforcement agents also saw, among o ther th ings , a computer j thehard-dr ive of the computer was copied and analyzed. Thisana lys i s led to an e lec t ron ic address book t ha t conta ined l i nksto websi te addresses , as well as in form ation as to var iouswebsi te addresses t ha t the computer 's user had accessed. Theseaddresses , in tu rn , had l ink s to o th er websi tes . Law-enforcementagents v i s i t ed some of the referenced websi tes , and many o ther sas wel l , and have downloaded images from them . Thes e im agesappear wholly unremarkable to the naked eye. But these images(and others ) have been a na ly ze d u sin g the Steganography Program.As a r e su l t of th i s ana lys i s , some of the im ages h av e beenrevea led as . containing readable t ex t f i l e s . These t ex t f i l e s of which the re are w ell over 100 - are re fe rre d to here ina f t e r asthe "New Je r sey Conspira tors ' Elect ron ic Messages."

THE BOSTON CONSPIRATORS25. During the 2006 Boston Sear ch , l aw -en fo rc ement

agents observed and copied numerous computer d i sks . A number ofthe se computer disks con ta ined t r aces of deleted e l ec t r on i cmessages. Techn ic ia n s r ecove red these "de le ted" messages. Basedon my t r a in ing , exper ience, and pa r t i c i pa t i on in t h i sinves t iga t ion , I bel ieve t ha t th e "de le ted" messages(he re ina f te r , "Boston Conspira tors ' Elect ron ic f1essages") wered ra f t s of messages t ha t were subsequent ly conveyed between MoscowCente r and the Boston Conspira tors , us ing steganography.5

26. I base t h i s conclus ion on a number of f a c t s . Forexample, the Steganography Program was ex t rac ted from a computerd i sk recovered dur ing the 2005 New Jersey Search - and t ha t

5 In add i t ion to the "de le ted" messages desc r ibed above,law-enforcement agents have v i s i t ed websi tes t ha t con ta in images;upon ana lys i s , it has become c l e a r t ha t these images con ta inencrypted t e x t f i l e s . Based on my t r a in ing , exper ience , andpa r t i c i pa t i on in t h i s inves t iga t ion , I be l i eve t h a t t hese t ex tf i l e s contain communications between Moscow Center and th e BostonConsp i r a to r s . These t ex t f i l e s a re r e f e r r ed to he re i na f t e r asth e "Boston Consp i r a to r s ' I n t e r ne t Messages."

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computer disk appears subs tan t i a l ly s imi l a r to one of thecomputer disks recovered dur ing the 2006 Boston Search. Bothd isk s , fo r example, ca l l fo r a 27-charac te r password. Inadd i t ion , and among o the r t h ings , a number of the BostonCon sp ir at or s' E l ec tr on ic Messages appear d ire ct ly to concerncommunication by means of s teganography. For example, onemes,sage, dated December 15, 2004, discussed the pro cess o f"decrypt[ ing]" messages embedded in images; ano ther message,dated February 22, 2005, discussed "decypher [ing] [s ic]" da taembedded in images. Simi lar ly , on or about October 3, 2004, lawenforcement agents , act ing p ursu an t to a j ud i c i a l order ,in t e rcep ted aura l communications taking place in s ide the BostonTownhouse. TRACEY LEE ANN FOLEY, the defendant , was heard sayingto DONALD HOWARD HEATHFIELD, the defendant : "Can we a t t a ch twof i l e s conta in ing messages or not? Le t ' s say fourp ic tu r e s Based on my t r a in ing , exper ience , andpa r t i c i pa t i on in t h i s inves t iga t ion , I bel ieve t ha t t h i s was are fe rence to convey ing messages by means of s teganographyp lac ing " f i l e s conta in ing messages" in " pic tu re s." On o r aboutMarch 7, 2010, law-enforcement ag en ts , a ct in g pursuant to aj u d i c i a l order , in tercep ted au r a l communications ta kin g p la cein s ide the Boston Townhouse. As a f i na l example, in o r aboutMarch 2010, FOLEY and HEATHFIELD were heard discuss ing FOLEY'suse of steganography and the schedule of her communications withMoscow Center .

h RADIOGRAMS27. Radiograms a re coded burs ts of da ta sen t by a

rad io t ra n sm i tt er t ha t can be picked up by a rad io r e ce ive r t ha thas been s e t to the proper frequency. As t ransmi t ted , radiogramsgenera l ly sound l ike the t r ansmis s ion of Morse code. As i s s e tfo r th below, the I l l ega l s have communicated with Moscow Center bymeans of radiograms.

28. For example, as a r e su l t of the 2006 BostonSearch, t echnicians recovered th e Boston Conspira tors ' Elec t ron icMess ag es. App ro ximate ly f iv e o f these messages d es crib e th esending o r r ece ip t of an "RG." Based on my t r a in ing , exper ience ,and pa r t i c i pa t i on in t h i s inves t iga t ion , I bel ieve t h a t "RG"connotes "radiogram."29. In a s imi la r ve in , la rge numbers of th e New Je r sey

Conspi ra tors ' Elec tronic Messages mention the sending o r r e ce ip tof an "RG." For example, a January 2009 mes sage from MoscowCente r fo r the New Jersey Conspira tors reads , in re le va nt pa r t :"PIs , make sure your radioequipment [sic] fo r RG r cp tn i s inorder . We p lan to send a couple of t e s t Rgs[ . ]" Based on my

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t r a in ing , exper ience , and pa r t i c i pa t i on in t h i s i nve s t i ga t i on , Ibe l i eve t ha t "RG" and "Rg" connote "radiogram."

30. Furthermore, d uring the 2006 Sea t t l e Search, lawenforcement agents ente red the Sea t t l e Apartment and observedthe re a rad io t ha t can be used fo r rece iv ing shor t -wave r ad iot r ansmis s ions . In add i t ion , agents observed and photographedsp i r a l notebooks, some pages of which conta in apparen t ly randomcolumns of numbers. Based on my t r a in ing , exper ience , andpa r t i c i pa t i on in t h i s inves t iga t ion , I bel ieve t h a t th e rad io inth e Sea t t l e Apartment was used by the Sea t t l e Conspira tors tor ece ive radiograms - and t h a t th e sp i ra l notebook con ta in s codesused to decipher radiograms as they came in .

31. Fina l ly , th roughout 2003, law-enforcement agents ,ac t i ng pursuant to j ud i c i a l o rd ers , in te rc ep te d au ra lcommunications ta kin g p la ce i n s ide the Yonkers House. On a tl e a s t f ive occas ions in 2003, t h i s au r a l surve i l l ance revealedthe i r r egu l a r e le ct ro n ic c li ck in g sounds assoc ia t ed with th er e ce ip t of coded r ad io t ra n sm i ss io n s. Based on my t r a i n i ng ,exper ience , and pa r t i c i pa t i on in th is inves t iga t ion , I be l ievet ha t the c l ick ing e l ec t r on i c sounds heard in th e Yonkers Housea re the sounds of a rad io t r ansmiss ion being r ece ived from MoscowCenter. In addi t ion , the aura l su rve i l l ance ind ica ted t h a t , ono r about May 6, 2003, JUAN LAZARO, the defendant , t o ld VICKYPELAEZ, the defendant , t ha t he was "rece iv ing" "rad io" "from overt he re . "

SECRET PAYMENTS TO THE CONSPIRATORS1..:.. COMPENSATION OF THE CONSPIRATORS BY MOSCOW CENTER32. To f u r the r the aims of th e c on sp ir ac y, Moscow

Center has ar ranged fo r th e consp i ra to r s c l andes t i ne ly to becompensated fo r t h e i r work on behal f of the Russ ian Federat ion .33. For example, ce r t a in of the Boston Consp i ra to r s '

Elec t ron ic Messages are i temized r epo r t s prepared by the BostonConsp i r a to r s of payments t h a t Moscow C en te r has made to them.One-message reads , in pa r t , as fol lows: "Exchange r a t e used i s 1Euro = $1.29. Got from Ctr . 64500.00 dol l a r s , income 13940,i n t e r e s t 76. Expenses: r en t 8500, u t i l i t i e s 142, t e l . 160, carl e a s e 2180, insurance 432, gas 820, educat ion 3600, payments inFr. 1000, medical 139, lawyers fees 700, meals and g i f t s 1230,mai lboxes , computer supp l i es 460, bus iness (cover) 4900, t r i p tomeet ing 1125."

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34. To c i t e another example, during the summer of2009, the New Jersey Conspira tors argued with th e SVR in a se r i e sof encrypted messages about the s t a t u s of the Montc la i r House,i n to which the New Jersey Conspira tors had r ecen t ly moved. TheNew Jersey Conspi ra tors contended t h a t th ey sh ou ld be permi t tedto own the Montcla i r House; Moscow Center responded t h a t theDirec tor of theSVR had per sona l ly determined t h a t Center wouldown the Montcla i r House, bu t would permi t the New JerseyConspi ra tors to l ive in it. The New Jersey Conspira tors wrote:

In o rde r to preserve pos i t i ve working re l a t ionsh ip , wewould not fu rt he r c on te st your des ire to own t h i s house .. We a re under an impress ion t ha t C. views ourownership of the house as a devia t ion from the o r ig ina lpurpose o f o ur m is sio n he r e . We'd l ike to assu re yout h a t we do remember what it i s . From our per spec t ive ,p urch ase o f the house was so l e l y a na tura l prog ress iono f our prolonged s tay here . It was a convenient way toso lve the housing i s sue , plus to 'do as the Romans do 'in a soc ie ty t ha t values home ownership. [W]ed idn ' t fo rge t t ha t the house was bought under f i c t i t i ou snames.

CLANDESTINE FOREIGN PAYMENTS TO THE CONSPIRATORS35. To rece ive compensation from the SVR, ce r t a i n of

the consp i r a to r s have engaged in c landes t ine meet ings withrepresen ta t ives of the Russian government outs ide of the UnitedSta t e s . The Yonkers Conspira tors have rou t ine ly t r ave led to apa r t i cu l a r South American country ("South American Country") tor ece ive payments from the SVR.

36. During 2002, fo r example, law-enforcement agents ,ac t ing pursuan t to j ud i c i a l o rd ers , i nt erc ep te d au ra lcommunicat ions ta ki ng p la ce i ns ide the Yonkers House. 6 OnFebruary 20, 2002, j u s t a f t e r VICKY PELAEZ, the defendant , hadr e tu rned from a t r ip to the South American Country, JUAN LAZARO,th e defendant , and PELAEZ were recorded engaging in aconver sa t ion about money hidden i n s ide PELAEZ's luggage .

37. On February 23, 2003, pursuant to a j ud i c i a l

Cer ta in of the conversat ions between JUAN LAZARO andVICKY PELAEZ, th e defendants , were conducted in Spanish . To theex t en t those conversa t ions are quoted o r descr ibed here in , thosequota t ions and d es cr i pt io n s a re based on pre l iminary t r an s l a t i onso f th e co nversa tions , and are sub j ec t to re vis io n.

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order , the Yonkers Conspi ra tors were overheard count ing whatsounded l i ke a l arge amount of money. VICKY PELAEZ, thedefendant , who had j u s t re turned from the South American Country,s ta ted , in subs tance , tha t they had e i gh t bags of " ten ," and t h a tshe had div ided up the remaining tw o bags so t ha t they would notbe so bulky. PELAEZ and JUAN LAZARO, the defendant , thendiscussed whether , a f t e r accounting fo r ce r t a in expenses, theyhad "72 ,500" remaining or, as they l a t e r determined, "76." Basedon my t r a in ing , exper ience, and pa r t i c i pa t i on in h isinve s t i ga t i on , I bel ieve t ha t , in the South American Country,PELAEZ picked up e igh t bags, each conta in ing $10,000 (" ten") ,which money was compensation fo r th e Yonkers Conspira tors ' workon beha l f of Russia .

38. Law-enforcement agents have also conducted videosurve i l l ance of the Yonkers Conspira tors in the South AmericanCountry. For example, on o r about January 14, 2000, lawenforcement agents conducted video su rve i l l ance of VICKY PELAEZ,the defendant , mee tin g w ith an i nd iv idua l a t a pub l ic park in theSouth American Country (" the Park") . PELAEZ rece ived a bag fromthe i nd iv idua l during t h e i r meet ing. Afte r h av in g r ev iewed thevideo surve i l l ance , based on my t r a in ing , exper ience , andinvolvement in t h i s inves t iga t ion , and the f a c t s se t fo r th inth i s sec t ion , I bel ieve t ha t the i nd iv idua l gave PELAEZ moneyduring t h e i r meet ing in the Park which represented payment fromthe SVR to the Yonkers Conspira tors . On the same day, on orabout J a ~ u a r y 14, 2000, j ud i c i a l l y - au tho r i z ed in te rcep t ions o ft e l ephon ic communications assoc ia t ed w ith the YonkersConspira tors ind ica te t ha t LAZARO and PELAEZ discussed PELAEZ'smeet ing in the South American Country t ha t i s descr ibed in thepreceding paragraph. During the ca l l , PELAEZ t o ld LAZARO, inpa r t , t h a t "a l l went well . " Based on my t r a in ing , exper ience ,and par t i c ipa t ion in t h i s i nve s t i ga t i on , I bel ieve t h a t PELAEZwas confirming fo r LAZARO t ha t , while in the Park, she hadsuccess fu l ly rece ived funds from a r epresen ta t ive o f the Russiangovernment.

39. In a s imi la r vein , on August 25, 2007, lawenforcement agents observed and video- taped JUAN LAZARO, thedefendant , meet ing with a Russian government o f f i c i a l ("RussianGovernment Off i c i a l #1") . ' The meetin g to ok place in th e Park in

7 A still photo from the surve i l l ance video of the August2007 meet ing between LAZARO and Russian Government Off i c i a l #1has been shown to a United Sta tes o f f i c i a l ("U.S. Off i c i a l #1") .U.S. Off i c i a l #1 i den t i f i ed Russian Government Off i c i a l #1 as aRussian government employee t ha t U.S. Off i c i a l #1 has met and who14


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the South American Country where PELAEZ had rece ived money in2000 from Russian Government Off i c i a l #1. The videotape of themeet ing between LAZARO and Russian Government Off i c i a l #1captured, among o the r th ings: the two men walking toge ther in thepark, s i t t i ng toge ther on a bench, and Russian GovernmentOff i c i a l ~ plac ing a shopping bag in to a p la s t i c bag held byLAZARO. Having reviewed th e v id eo -t ap e footage of the meeting,based on my t r a in ing , exper i ence , and pa r t i c ipa t i on in t h i si nves t iga t ion , I bel ieve t ha t during the mee ti ng , Rus sia nGovernment Off i c i a l #1 gave a payment to LAZARO fo r h is work onbehalf o f Russia . I base t h i s conclusion, in p a r t , on the f a c ttha t p r i o r to LAZARO's t r ip to the South American Country inAugust 2007, j u d ic i a ll y - au tho r i z ed in te r cep t ion s of t e lephoniccommunications ind ica ted t h a t LAZARO was s t ruggl ing f i nanc i a l l y ;a f t e r LAZARO re turned from the South American Country, however,jUd ic ia ll y -a u th o ri zed i nt er c ep ti on s o f t e lephonic communicationsassoc ia ted with the Yonkers Conspi ra tors i nd ica te t ha t LAZAROpaid off n ea rly $8,000 in county and c i ty t axes a l l with in daysof h is r e tu rn from the South American Country.

40 . The t r i p s JUAN LAZARO and VICKY PELAEZ, thedefendant s , have taken to the South American Country h av e servedanother purpose as wel l - pass ing cover t messages to Russiangovernment o f f i c i a l s . On January 8, 2003, shor t ly before a t r i pt ha t PELAEZ took to the South American country , j ud i c i a l l y author ized i n t e rcep t ions of au ra l communications t ak ing placeins ide the Yonkers House captured the fol lowing conversa t ionbetween LAZARO and PELAEZ:

LAZARO:

PELAEZ:

LAZARO:

[WJhen you go [to the South American Country]. I am going to wri t e in ' i n v i s i b l e '. and you ' re going to pass them a l l o f t h a tin a book .Oh, o.k .

I 'm going to give you some blank p i eces ofpaper and it wi l l be there abouteverything I ' v e done .

Based on my t r a in ing , exper ience, and pa r t i c i pa t i on in t h i sinves t iga t ion , I bel ieve t h a t LAZARO was giv ing PELAEZ

i nt ro duc e d h ims e lf to U.S. Off i c i a l #1 as an employee of th eRussian embassy in the South American Country.15


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in s t r uc t ions .about del iver ing a message to Russian governmentof f i c i a l s dur ing her meeting in th e South American Country; t h i smessage, LAZARO indica ted , would be wr i t t en " in i nv i s ib l e " -with i nv i s ib l e ink .USE OF FALSE IDENTITIES41. In furtherance of the conspiracy , the defendants ,

in clu din g b ut no t l imi ted to those enumerated below, have assumedf a l s e i d en t i t i e s .

42. RICHARD MURPHY, t he d ef en da nt , purpor t s to be aUnited S ta te s c it iz en , born in Phi ladelphia , Pennsylvania . On o rabout October 3, 2006, law-enforcement agents , ac t ing pursuant toa j u d i c i a l orde r , searched a bank safe depos i t box loca ted inManhattan, New York. The safe depos i t box i s re gi st er ed i n thename of "Richard J . Murphy." In s ide the sa fe depos it box, lawenforcement agent s observed and photographed a b i r t h c e r t i f i c a t efo r "Richard Joseph Murphy," which b ir th c e rt if ic a te bear s apa r t i cu l a r number ("Murphy Bi r th Cer t i f i c a t e Number"). Localof f i c i a l s in Phi ladelphia, Pennsylvania have caused a search tobe conducted of re le va nt municipal r eco rds . These of f i c i a l sr epo r t t ha t t he re are no records ind ica t ing the exis tence of theMurphy Bir th Cer t i f i c a te Number.

. 43. TRACEY LEE ANN FOLEY, th e defendant , purpor t s tobe a na tu ra l i zed United Sta t e s c i t i zen , and a nat ive of Canada.On o r a bo ut J an ua ry 23, 2001, l aw-enforcement of f i c i a l s , ac t ingpursuant to a j ud ic i a l o rd er, s ea rc he d a safe depos i t box loca ted-in Cambridge, Massachuset ts ("Cambridge Safe Depos i t Box"). TheCambridge Safe Deposi t Box i s re gis te re d in the name of "TraceyLee Ann Foley" and "Donald Howard H ea th fie ld ." In sid e theCambridge Safe Deposi t Box, of f i c i a l s observed and photographed as e r i e s of photographic n eg ativ es ; th e n eg ativ es appear to be ofFOLEY when she was in her 20s. On a l l the negatives o f theyounger FOLEY save one, the name of the company t h a t produced thef i lm on which th e negat ives were pr in ted has been exci sed . Onone n eg at iv e, th e name of the film company remains v i s ib l e . Thename on the f i lm i s "TAClvlA"; based on law-enforcement r esearch Iknow t h a t TACMA was a Sovie t fi lm company.s

44 . DONALD HOWARD HEATHFIELD, the defendant , purpor t s

S The photographic negat ives were presen t in theCambridge Safe Deposi t Box when law-enforcement o f f i c i a l sperformed th e most recent j u d i c i a l l y a u th o riz ed s ea rc h in l a teApr i l 2010.16


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48. Simi la r ly , TRACEY LEE ANN FOLEY, th e defendant ,has t r ave led on a f r audulen t Br i t i sh p asspo rt prepa red for her bythe SVR. One of th e Boston Conspira tors ' In t e rne t Messagesprovided i n s t ruc t i ons fo r FOLEY with r espec t to he r then-upcomingt r i p to Moscow:

I tin er ar y to M. [Moscow] fo r D .j Par i s - Wien (byt r a i n ) , Mar 18 in Wien exch[ange] doc ' s fo r Br i t i shpass [po rt ] - [Moscow] (Mar 19, f l i g h t OS 601 ) . Veryimportant : 1 . Sign your passpor t on page 32. Trainyour se l f to be able to r ep ro du ce y ou r s igna ture whenit's necessa ry . 2. PIs, be aware t h a t you j u s t v i s i t edRussia (see stamps on page 14 - en t ry - Mar 16,depar ture - Mar 17) . I f asked, we suggest you use thefo l lowing s to ry : you flew to Moscow on Mar 16 fromLondon fo r example f l i g h t SU 211 to pa r t i c i pa t e inbusiness t a lk s . (your bus iness i s i nte rn at io n alconsul tancy seminars - pI s , copy sample of yourhusband) on i nv i t a t i on by Russian Chamber of Commerce.In the passpor t you ' l l ge t a memo with recommendation.PIs , des t r oy the memo a f t e r read ing . Be wel l .

IV. THE ROLE OF METSOS - AND RUSSIAN GOVERNMENT OFFICIALS - INDIRECTLY ASSISTING THE NETWORK OF SVR ILLEGALS& METSOS

49. CHRISTOPHER R. METSOS, the defendant , i s a sec r e tSVR agent who i s based abroad, and who has r epea ted ly entered theUnited Sta tes to meet with ce r t a in I l l ega l s and, among o the rth ings , to pay them on beha l f of Moscow Center . On four separa teoccasions dur ing th e p erio d from on or about February 24, 2001through on o r about Apr i l 17, 2005, METSOS and RICHARD MURPHY,the defendant , met t oge the r a t a re s t auran t in Sunnyside , NewYork ("Sunnyside Res tauran t" ) . Pursuant to a s e r i e s of j u d i c i a lorder s , law-enforcement agents conducted audio and v i sua lsurve i l l ance of these Sunnyside Re st au ra n t me e ti ng s.

50. On o r abou t March 31, 2002, CHRISTOPHER R. METSOSand RICHARD MURPHY, th e defendants , met a t the SunnysideRestauran t . Pursuant to a j ud i c i a l order , th e meet ing wasrecorded and video- taped . During the meeting, MURPHY expressed ase r i e s of f ru s t r a t i ons about h is work, to which METSOS responded:"Well , I 'm so happy I 'm not your handler ." METSOS and MURPHYa l so d is cu sse d th e amount of money t h a t MURPHY r ece ived in sa la ryfrom "our o f f i ce , " and, a t the end of the meet ing, METSOS s toodup and sa id : " t h e r e ' s fo r ty [un in te l l ig ib le ] black bag ." Based

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on my t r a in ing , exper ience , and p a rt ic ip a ti on i n t h i si nves t iga t ion , I be l ieve t ha t , a t t h i s meet ing, METSOS gaveMURPHY a bag contain ing $40,000 - as compensation fo r MURPHY'swork on behal f o f Moscow Center .

51. Simi la r ly , on o r about Apri l 17, 2005, CHRISTOPHERR. METSOS and RICHARD MURPHY, the defendants , met a t theSunnyside Restauran t . At the Sunnyside Restauran t , METSOSprovided MURPHY with an ATM card, a personal i d en t i f i ca t i onnumber assoc ia ted with the ATM card , and d i r e c t i ons as to how touse the card . Based on my t r a in ing , exper ience , andpar t i c ipa t ion in t h i s i nve s t i ga t i on , I be l ieve t h a t the ATM cardt h a t METSOS gave MURPHY was to be used to withdraw money from anaccount funded fo r MURPHY by Moscow Center , as compensation fo rMURPHY's work on beha l f of the SVR.THE 2004 BRUSH-PASS: METSOS RECEIVES MONEY FROM RUSSIANGOVERNMENT OFFICIAL #2 AND THE MONEY IS GIVEN TO SVRILLEGALS52. As i s s e t fo r th more fu l ly below, during 2004,CHRISTOPHER R. METSOS, the defendant , was su r r ep t i t i ou s ly handedmoney in New York by a Russian government o f f i c i a l ("RussianGovernment Off i c i a l #2 11 ) , a purported diplomat assoc ia ted with

the Manhat tan-based Russian Mission. 1o METSOS then div ided th i smoney in to tw o por t ions . Fi r s t , METSOS sec re t l y bur ied some ofthe money in ups ta te New York - and two years l a t e r , in 2006, theSea t t l e Conspi ra tors f lew to New York and dug it up. Second,during 2004, METSOS gave some of the money to RICHARD MURPHY, thedefendant ; sho r t l y the rea f t e r , MURPHY gave some o f the money tothe Sea t t l e Consp i ra to r s .

53. On o r about May 16, 2004, pursuan t to a j ud i c i a lorder , law-enforcement agents conducted video su rve i l l ance frommul t ip le cameras pos i t ioned in the immediate v i c i n i t y of the LongI s land Rai l road ' s Fores t H i l l ~ Sta t ion in Queens, New York("Fores t Hi l l s Train Sta t i on" ) . The May 16, 2004 videosurve i l l ance of th e Fores t Hi l l s Train Sta t ion r e f l e c t s t h a t

10 On numerous occasions I law-enforcement off i -cers haveobserved the person who appears to be Russ ian Government Off i c i a l#2 e nte rin g th e Russ ian Mission. In add i t i on , law-enforcemento f f i c i a l s have obta ined from the United Sta t e s Department ofSta t e the v is a a p pl ic a tio n of a pa r t i cu l a r i nd iv idua l . This vi saappl i ca t ion bear s a photograph of Russian Government Off i c i a l #2.According to t h i s visa appl ica t ion , the visa app l i c an t . i s a"second se cre ta ry " o f the Russian Mission.

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CHRISTOPHER R. METSOS, the defendant , and Russian GovernmentOff i c i a l #2, were i n i t i a l l y in the v ic in i ty of the Fores t Hi l l sTrain Stat ion , and t ha t METSOS and Russian Government Off ic ia l #2were each carry ing an a l l -bu t i den t i c a l o range bag . CHRISTOPHERR. METSOS, the defendant , and Russian Government Off i c i a l #2 thenconverged on a s t a i r case a t the Fores t Hi l l s Train Sta t ion .METSOS walked up the s t a i r s i Russian Government Off i c i a l #2walked down the s t a i r s . Toward the middle of the s t a i r s , as theypassed one another , METSOS quick ly handed Russian GovernmentOff i c i a l #2 h is orange bag, and Russian Government Off i c i a l #2quick ly handed METSOS h is o ra ng e bag . METSOS th en c on ti nu edascending the s t a i r s and Russian Government Off i c i a l #2 cont inueddescending the s t a i r s .

54. Based on my t r a in ing , exper ience, andpar t i c ipa t ion in t h i s inves t iga t ion , I be l i eve t h a t RussianGovernment Off i c i a l #2 ' s orange bag conta ined a l a rge sum ofmoney, and t ha t , a f t e r receiv ing the orange bag f i l l ed with themoney, CHRISTOPHER R. METSOS, the defendant , caused th e money tobe given to the New Je r sey Conspira tors and the Sea t t l eConspira tors through the fol lowing sequence of events :

a . On o r about May 16, 2004, hours a f t e r METSOS'smeeting a t the F ore st Hi l l s Tra in Sta t i on withRussian Government Off i c i a l #2, METSOS and RICHARDMURPHY, the defendant , met a t the sunnysideRes tauran t . Pursuant to a j u d i c i a l order , lawenforcement agents conducted audio and videosurve i l l ance of the meeting. During t h i s meeting,METSOS provided MURPHY with a packagewhich METSOSsugges ted contained MURPHY's "cut , " and f u r the r

Russian Spy Ring

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