THIS STORY HAS BEEN FORMATTED FOR EASY PRINTING

10 in US held as spies for Russia

Cambridge couple arrested in sweep; Allegedly cultivated ties to policymakers

By Shelley Murphy and Maria Sacchetti
Globe Staff / June 29, 2010

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They allegedly used invisible ink, passed coded messages, and made cash deliveries by swapping identical bags while passing one another in the stairwells of train stations.

In a case that conjured images of a seemingly bygone era of international espionage, 10 alleged Russian Federation agents, including a married couple living in Cambridge’s Harvard Square, were arrested Sunday on charges that they infiltrated American society by using stolen identities while on deep-cover assignments to spy on US policy makers.

The Cambridge couple, who go by the names of Donald Howard Heathfield and Tracey Lee Ann Foley and identified themselves as Canadians when they arrived in the United States in 1999, were arrested Sunday night by the FBI at their home on Trowbridge Street.

They are among 11 people — including three other married couples in New York, New Jersey, and Virginia, and an alleged Russian agent who remains at large — charged in complaints unsealed yesterday in US District Court in Manhattan.

An FBI affidavit said Heathfield, Foley, and the others are agents of the SVR, the foreign intelligence organ of the Russian Federation. An encrypted message indicated that their mission was “to search and develop ties in policymaking circles’’ and send intelligence back to Russia, it stated.

According to the affidavit, Heathfield in 2004 reported to his Russian director that he had made contact with someone who worked for a US government research facility “on issues of strategic planning related to nuclear weapon development.’’ The next year he reported establishing contact with a former high-ranking US national security official.

“I’m absolutely floored,’’ said Paul Hesselschwerdt, president of Global Partners Inc., a Cambridge-based consulting firm where Don Heathfield has worked since 2000 as a sales consultant. “He’s a good person. He’s lived in the United States for a long time. We’re just completely shocked.’’

Heathfield went from full time to freelance in 2006, Hesselschwerdt said. He did one training workshop last year for a Lexington company, then a workshop this year in France.

Boston lawyer Robert Sinsheimer, who represents Foley, said, “She seems like a frightened, concerned mom.’’ Heathfield’s lawyer could not be reached for comment last night.

The couple made a brief appearance yesterday in US District Court in Boston, speaking in French to their two sons, ages 16 and 21, seated nearby. US Magistrate Judge Jennifer Boal ordered them held without bail until a detention hearing Thursday.

The arrests served as a reminder that two decades after the end of the Cold War and despite the Obama administration’s declared effort to “reset’’ relations with Moscow, Russia and the United States remain suspicious rivals. Spying between the two countries with the largest nuclear arsenals remains a fact of life, said John E. Pike, director of Globalsecurity.org, a military information website.

“They’re the only other country on the planet that can wipe out civilization,’’ Pike said. “They are one of the few countries on the planet that could pose a military challenge to us.’’

But while Washington’s intelligence effort centers on Russia’s military secrets, the Kremlin’s spies on US soil are usually after trade secrets.

The FBI affidavit said the alleged spies have been under surveillance for a decade by law enforcement officials who tailed them, bugged their conversations, tracked their electronic messages, and conducted surreptitious searches of their property.

They are charged with conspiring from the 1990s to the present to serve as agents for a foreign government.

Also charged are Richard and Cynthia Murphy of Montclair, N.J.; Michael Zottoli and his wife, Patricia Mills, formerly of Seattle and now of Arlington, Va.; Juan Lazaro and his wife, Vicky Pelaez, of Yonkers, N.Y.; Anna Chapman of New York; Mikhail Semenko of Virginia; and Christopher Metsos, who is believed to be overseas. The suspects, except for Chapman and Semenko, are also charged with money laundering.

In federal court in Manhattan yesterday, Assistant US Attorney Michael Farbiarz said the charges are “the tip of the iceberg,’’ said Yusill Scribner, a spokeswoman for the US attorney in New York.

All of their expenses — including housing, utilities, insurance, and educational costs — were covered by the Russian intelligence agency, the FBI said.

At Global Partners in Cambridge, Heathfield was viewed as a sophisticated international sales consultant, fluent in English and French, with a sharp intellect and great people skills. With his impeccable manners and charm, Heathfield capably handled projects at home or overseas, Hesselschwerdt said.

“When we needed him to deliver something, he did it,’’ Hesselschwerdt said.

The Heathfield he knew was French-Canadian, with a mother in Montreal, who had lived in the United States for years. He was so fluent in English he could have been mistaken for an American.

He liked to ski, and one of his children attended George Washington University. The couple donated money to the university during the 2008-09 school year.

The company website describes Heathfield as a “manager, entrepreneur, and scholar’’ focused on global business.

Hesselschwerdt said Heathfield also went to Harvard, and the Harvard Crimson reported that he graduated from the Kennedy School with a master’s in public administration.

The documents unsealed yesterday in New York offered a starkly different portrait of Heathfield and his wife.

In addition to establishing contacts in the US government’s nuclear research and national security networks, they allegedly received a directive from Moscow Center in April 2006 ordering them to gather information on US policy on the use of the Internet by terrorists.

They were also asked to probe US policies in Central Asia, problems with US military policy, and “Western estimation’’ of Russian foreign policy.

In May 2006, the couple allegedly sent a message to Moscow focusing on a new CIA boss and the 2008 presidential election.

The investigation appeared to intensify this year as one of the suspects, Chapman, allegedly sat in a Manhattan coffee shop, using a laptop to communicate on a wireless network with another alleged Russian operative who was driving in the vicinity.

Hours after Heathfield and his wife appeared in court yesterday, neighbors on their quiet side street voiced shock.

“I didn’t have a clue about that at all,’’ said Montse Monne-Corbero. “They were my neighbors, and they were nice people. I thought they were from Europe.’’

She described Foley as courteous, very nice and pretty.

Monne-Corbero said Foley recently told her that the family was moving and “ ‘you’re going to have new neighbors.’ ’’

David Filipov and John R. Ellement of the Globe staff and Globe corrrespondent Stewart Bishop contributed to this report. Shelley Murphy can be reached at shmurphy@globe.com.

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