By Jerry Markon and Philip Rucker
Washington Post Staff Writers
Wednesday, June 30, 2010; A01
Richard and Cynthia Murphy raised two children in a colonial house with maroon shutters on a winding street in suburban New Jersey. Cynthia, a vice president at a financial services firm, tended hydrangeas out front. Katie, 11, and Lisa, 7, rode pink bicycles around a nearby cul-de-sac.
Neighbors noticed that Cynthia had a slight accent -- Scandinavian, she told them.
It seemed like a model upper-middle-class life. But according to federal prosecutors, the house on Marquette Road was owned by the "Moscow Center," an intelligence arm of the Russian government. U.S. officials say Richard and Cynthia Murphy -- probably not their real names -- were deep-cover Russian agents, two of 11 operatives who until their arrests this week lived for years like ordinary Americans while secretly reporting to Moscow.
"It's just staggering," said venture capitalist Alan Patricof, who suspects he is the unnamed businessman described by authorities as having been targeted by Cynthia Murphy. "It's off the charts."
Patricof, a longtime confidant of Bill and Hillary Clinton, knew Murphy through the Manhattan firm Morea Financial Services, a tax service where she worked and he was a client. Although he said they discussed only business, intercepted communications from the suspect's superiors mentioned a "New York-based financier" as a possible source of information about U.S. foreign policy and White House intelligence, according to the criminal complaint in the case.
Details that emerged Tuesday about the alleged spies' lives added to the mystery of a network that prosecutors say extended from Manhattan to Seattle and the heart of the Washington area. Though utterly unremarkable to their neighbors, the suspects allegedly buried stashes of money and wrote messages in invisible ink as they sought to collect tidbits about U.S. policy and secrets.
On closer inspection, there seemed to be hints that something was going on. The suspect known as Anna Chapman, who operated an online real estate company in New York, revealed on her Facebook page that she was educated in Moscow and belonged to an organization of Russian-speaking professionals. Another suspect, adjunct college professor Juan Lazaro, was recorded on an FBI wiretap describing his childhood to the woman who lived as his wife.
"We moved to Siberia . . . as soon as the war started," the Yonkers, N.Y. resident said, according to the complaint.
FBI agents arrested 10 people in the United States on Sunday, including the Murphys and three suspects in Arlington County. On Tuesday, as officials in the United States and Russia sought to prevent the case from harming relations between the two countries, the 11th person charged in Manhattan federal court was arrested on the Mediterranean island of Cyprus as he was about to fly to Budapest.
Attorneys for the suspects either could not be reached or declined to comment.Nothing classified
Unlike famous spies such as Aldrich H. Ames and Robert P. Hanssen, who did incalculable damage to U.S. national security, those charged this week were ordered not to seek classified data, some federal officials said.
"They were here under deep cover, as a network in case Russian intelligence ever needed anything," said one law enforcement official, who like others quoted in this report spoke on the condition of anonymity because the investigation is continuing. "The idea was that they would become so Americanized that no one can ever find any connection between them and Russia."
Indeed, the alleged agents lived in the suburbs, went to parties and rooted for American sports teams. Eight men and women, authorities say, were "paired off" by Russian intelligence as married couples, and at least three of those four couples had children in the United States.
Two of those arrested in Arlington, a couple known as Michael Zottoli and Patricia Mills, took their young son on walks each evening in Seattle, where they lived until last year, neighbors said. Zottoli worked for an investment firm; Mills was a stay-at-home mom. The family lived in a neat and carefully decorated fifth-floor apartment.
"How would you ever think somebody next door would be involved in something like this?" said John Morrison, a neighbor. "You wouldn't think a spy would care about what color curtains or about making things look nice."
Mikhail Semenko, the third Arlington resident, helped neighbors at his apartment complex dig out after last winter's massive snowstorms. On his Facebook page, he lists a New Jersey Devils hockey player as one of his "likes."
"He's warm, not calculating," said Slava Shirokov, a co-owner of the Virginia travel agency where Semenko worked. "It's straight from a movie."
(In a strange twist of Washington's spy history, the strip mall that houses the travel agency has a Hollywood connection to Hanssen, the FBI agent who spied for Russia: A film crew working on "Breach," a movie about Hanssen, set up shop in the parking lot several years ago, the mall manager said.)Hidden clues
But beneath the carefully constructed exteriors, there were indications of what authorities say was the suspects' real purpose in the United States: to infiltrate academic, policymaking and government-connected circles. Semenko, for example, often attended events sponsored by embassies and nongovernmental organizations.
Donald Howard Heathfield, an international business consultant who lived with his "wife," Tracey Lee Ann Foley, and their two teenage sons in Cambridge, Mass., sought membership in more than 30 professional, academic and business associations -- including one linked to the Department of Homeland Security, according to his page on LinkedIn.
More direct hints emerge in court documents. When agents covertly searched Foley's bank safety deposit box in 2001, they found a series of photographic negatives of her. The name of the company that produced the negatives had been excised on all but one. Authorities identified the producer of the final negative as TACMA, a Soviet film company, court documents said.
The Murphys, the New Jersey couple, argued to their Russian handlers that they should own their Montclair home, according to encrypted communications intercepted by federal investigators. The handlers responded that the director of Russian foreign intelligence "had personally determined that the center would own the Montclair house but would permit the NJ conspirators to live in it," court documents say.
The Murphys pushed. "From our perspective, purchase of the house was solely a natural progression of our prolonged stay here," they said. "It was a convenient way to solve the housing issue plus to 'do as the Romans do' in a society that values home ownership."
Back on the Murphys' leafy street, neighbors on Tuesday expressed bewilderment at the charges. They said Richard, who worked at home, was often seen walking his daughters to the bus stop in the morning.
"The tragedy is what's going to happen with these kids," said neighbor Alan Sokolow.
Rucker reported from New Jersey. Staff writers Paul Schwartzman, Maria Glod, Jason Horowitz and Kevin Sieff and staff researchers Julie Tate and Meg Smith contributed to this report.