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Russian spies living among us: Inside the FBI's "Operation Ghost Stories"

"The FBI Declassified": The Spies Next Door
"The FBI Declassified": The Spies Next Door 43:25

Through never-before-seen footage and in-depth interviews,  "The FBI Declassified" takes you inside the minds of heroic federal agents and analysts as they reveal how they solved some of the biggest cases of their careers. Watch Tuesdays at 10/9c on CBS.  

Produced by Resa Matthews and Anthony Venditti

Around 2000, FBI agents learned there were multiple sets of Russian spies in the United States, posing as Americans. "Operation Ghost Stories was probably the largest FBI counterintelligence investigation in history," says Alan Kohler, assistant director of the FBI's Counterintelligence Division.

The spies were trained in Russia to assimilate into everyday American life by getting married, obtaining jobs and raising families, while also sending encoded messages back home, the FBI agents say. The spies lived double lives.

For more than a decade, FBI agents bugged the spies' homes, followed their travels, and ultimately cracked their secret communications network.

"They went to school with Americans. They went to July 4th parties with their neighbors," says Kohler. "And never once did anybody suspect they would be Russian spies."

Counterintelligence agents say the Russian spies got jobs they believed would allow them access to people in powerful positions. Their mission was to gather sensitive information that would be sent back to Moscow, which could potentially be used to damage U.S. national security.

Every move they made was monitored. FBI agents recorded several exchanges where the Russians passed large amounts of cash to each other in public places – to help finance their operations – and one instance where $60,000 was buried at a highway rest stop, to be retrieved later.

Could the FBI stop the spies before sensitive secrets got into the hands of the Russian government?

"You're always wondering, what are you missing?" says Ricci. "Do they have contacts? Do they have access to classified information? … The risks…were astronomical." 

THE SPIES NEXT DOOR

Todd Shelton | FBI Special Agent: When we first realized that we may have … Russian intelligence officers … operating in the United States … that became a critical threat that we needed to address.

Todd Shelton: We look to use every tool in the FBI investigative toolbox. Wiretaps, electronic monitoring, intercepts of electronic communication … to learn … exactly what we were facing.

By 2000, the New York office of the FBI was leading an unprecedented investigation into Russian intelligence agents living in the United States potentially threatening national security. 

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For more than a decade, the FBI focused on four couples living in a NYC suburb, Washington, DC, the Boston area, and Montclair, New Jersey. FBI agents bugged the spies' homes, followed their travels, and ultimately cracked their secret communications network. CBS News/FBI

Todd Shelton: Initially we focused on … Juan Lazaro and Vicky Peláez, who are living in Yonkers, New York. … We had Michael Zottoli and Patricia Mills, who had operated for a long time in the state of Washington and relocated to suburban Washington, D.C. We had Donald Heathfield and Tracey Foley, who were working and operating in and around Boston. … We identified Richard and Cynthia Murphy, who were then living in Montclair, New Jersey.

Todd Shelton: The Murphys had two children born in the United States.

Leon Panetta | Former CIA director: Their children have no idea. … Keeping the children in the dark about what they're doing is a way to make sure that you keep their identity as secure as possible.

The spies' identities, or backstory – known as a legend – was determined long before they set foot on American soil. 

Maria Ricci | FBI Special Agent: I don't have firsthand knowledge on when Richard and Cindy met … and became a husband and wife couple. … I do know that traditionally … trained intelligence officers … are paired up … at Headquarters back in Moscow.

Their new identity required new IDs and credentials.

Todd Shelton: Richard and Cynthia Murphy are both fabricated people. They had a forged U.S. birth certificate from the state of Pennsylvania and the state of New York, respectively.

Todd Shelton: We were able to find some of the original documentation … through clandestine searches.

Todd Shelton: The intelligence work -- it's not all James Bond and sports cars. It's nitty-gritty analysis. How did they learn how to do this? Where did they get the documentation? The inks were studied. The papers were studied.

With fake IDs and their backstory memorized, their assignments were to blend in with Americans.

Maria Ricci: When they first come to the United States, they're armed only with a birth certificate. They had to build a life here.

Maria Ricci: Richard Murphy began his career as a computer consultant. … He went to New School and got a degree … in public policy. And then he ended up becoming a stay-at-home dad. His wife, Cindy, she was a financial planner and then ultimately got her MBA at Columbia University.

Maria Ricci: This is the business card from Marea Financial … This is Cindy Murphy's Columbia University ID card.

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Cynthia and Richard  Murphy lived in Montclair, N.J., where they were raising two children born in the U.S.. "If you didn't know better, you would think this is the typical American family living out the typical American dream in the typical American neighborhood," Agent Shelton said. FBI

Todd Shelton: Cynthia Murphy … really takes on a prominent role in the intelligence activities of that couple. Her work at a financial services industry gave them intelligence of value to the economists in Russia.

Todd Shelton: In economic circles, financial circles, social circles, if you're looking for ways to show civil discontent, you might want a pulse of what's going on in the country at the time.

Todd Shelton: And … her attendance to Columbia was a huge opportunity for gaining access to the up and coming professionals in the U.S.

Maria Ricci: Over the course of the investigation after observing and listening to them for so long … they were constantly talking about how to gain access to people in political circles and policy making circles.

Todd Shelton: One of the things that makes intelligence officers so lethal is that they … get a significant amount of training in how to develop and recruit people, how to spot and assess weaknesses in people.

Maria Ricci: Cindy Murphy was … reporting on people who were interested in potentially obtaining jobs with the CIA. That was of significance to us.

Also, of significance were the spies the Russians had placed in Boston: Tracey Foley and Donald Heathfield. 

Maria Ricci: Donald Heathfield and Tracey Foley had two children, two boys, who were born in Canada.

Todd Shelton: Tracey Foley was a realtor.

Alex Coon: I was managing a real estate company here in the Boston area, and Tracey Foley worked for me. … She was probably one of the hardest working and most competent agents that I had.

Todd Shelton: We saw a number of things develop with Heathfield and Foley that caused us to be concerned.

Todd Shelton: Heathfield had attended the Kennedy School of Government at Harvard. After graduating he remained active in the alumni circles. He really used that as a platform to gain access to people that might ultimately be in positions of authority.

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In Cambridge, Massachusetts, Donald Heathfield and his wife, Tracey Lee Ann Foley, lived on a residential street just blocks from Harvard University. They had two teenage sons who were born in Canada. Heathfield received his master's degree in public administration from Harvard's Kennedy School of Government in 2000, which Agent Shelton believes he used "as a platform to gain access to people that might ultimately be in positions of authority." Foley worked for a real estate company. FBI

Craig Sandler: I met Donald Heathfield … at the Kennedy School.  … If there was a deep interest in … setting public policy, or … running the government, those are the people you found there.  

Craig Sandler: My impression of Don is that he was … professionally very well put together.  He had an interesting mind and he was interesting to talk to.

Todd Shelton: Heathfield had developed his own company called Future Map … in which he had a software program that he thought could help with strategic forecasting. … He would market this to people that he thought might be interested in it, large corporations, the military, defense.

Agents suspected that Heathfield's software was nothing more than a ploy to get close to someone inside the U.S. government.

Todd Shelton: It caused him to have access to a variety of people who would indeed have the types of information we believe that the Russians would value. … One of the people was a member of the U.S. government with information related to nuclear technology. … We knew that Heathfield was trying to gather information about how one would join the State Department.

Maria Ricci: We got information that he was in contact with somebody who could potentially be significant to the Russians and a problem for the United States. … With every step that they got closer, that risk became greater.

MONEY SWAPS AND DEAD DROPS 

Alan Kohler  | FBI Supervisory Special Agent: In 2004 … the spies … became more aggressive. … The Russians … wanted them to be more productive. They wanted them to target people with more value.

That's when the FBI's pursuit of this Russian spy network suddenly took an alarming turn.

Maria Ricci: Donald Heathfield … in Boston … was getting close to people who were nuclear experts. … We worked very hard at ensuring that those relationships did not progress.

Maria Ricci: Sometimes it was a question of putting somebody else in his path that would be of interest to him. Sometimes it was just a question of maneuvering a little bit.

It wasn't long before the FBI discovered a vital new link in the spy network: a Russian operative named Christopher Metsos had been dispatched from Moscow to assist the spies.

Todd Shelton: Christopher Metsos played a critical role in providing money and items of tradecraft to the … intelligence officers … operating in the United States.

"Tradecraft" includes the techniques, methods and technologies that a spy uses to gather intelligence.

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Russian operative Christopher Metsos had been dispatched from Moscow to assist the spies. He is seen here under FBI surveillance in Queens, New York in 2001. FBI

FBI agents quickly realized Christopher Metsos was sent to distribute a secret cache of money to subsidize the Russian operatives.  So, the FBI followed the money. The Russians used a "brush pass."

Todd Shelton: A brush pass would be a quick and clandestine exchange of items.

Todd Shelton: In May 2004, FBI surveillance was able to document a brush pass … between Metsos and the Russian government … at the Forest Hills, Long Island Railroad Station.  

Todd Shelton: A credentialed, diplomat of the Russian Federation is moving down the stairs while Metsos is moving up the stairs. Each man carries an identical bag, which they exchange midpoint on the stairs. … Inside the bag, we believe to be a significant amount of U.S. currency.

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In May 2004, FBI surveillance was able to document a brush pass --  a quick and clandestine exchange of items --  between Christopher Metsos and a credentialed, diplomat of the Russian Federation. Each man carries an identical bag, which they exchange midpoint on the stairs. … Inside the bag, we believe to be a significant amount of U.S. currency FBI

Alan Kohler: That was concerning to us because it -- it let us know that the Russians felt like they could freely travel into the United States and conduct operational activity right underneath our noses.

Todd Shelton: Now, Christopher Metsos, flush with the currency he's just received from the Russian government, moves to a restaurant in Queens later that same day.

There, Metsos met with Richard Murphy -- the spy who studied public policy and lived with his wife and children in New Jersey.

Maria Ricci: They walked together to a restaurant in Sunnyside and they sat at the table by the window and they were there for approximately two hours. … We recorded it. We also had FBI agents … in the restaurant next to them.

At the table, Metsos passed Murphy $175,000. And there was another $60,000 that came with a very specific set of instructions.

Todd Shelton:  The Russians … told Metsos to drive upstate New York and bury it. … Through a GPS device … we affixed to the rental car that Metsos was driving, we see the car go north out of New York City to a rest stop in Wurtsboro, New York.

Agents quickly identified where the money was hidden.

Todd Shelton: A small number of agents … went up to the rest stop and … Digging down a short way, they found … bundles of money that were buried in what is known … as a dead drop.

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At  a rest stop in Wurtsboro, New York, the FBI located bundles of cash, seen here wrapped in silver duct tape, buried in a dead drop. FBI

Alan Kohler: A dead drop is a cache of, typically, money. It could be weapons, it could be a radio communication device that is literally buried in the ground, hidden in a hollow tree … waiting for it to be picked up by a recipient at another time.

Agents re-buried the money and set up a camera.

Todd Shelton: We … immediately set up a new intelligence operation where the FBI would lie in wait, to see who ultimately would come and collect that money.

Back in the suburbs of New Jersey, Richard Murphy, flush with $175,000, made a plan to disperse some of the cash to a fellow Russian operative in New York City.

Maria Ricci: Richard Murphy … had an operational cell phone. And fortunately for us … we were already compromising that cell phone. He utilized this cell phone to … set up a brush pass in Columbus Circle.

In June 2004, the FBI staked out Columbus Circle and watched as Murphy tried to find the other operative, whom he had never met.

Ed Foley | FBI Special Agent: In the video, you see … Richard Murphy go up to a -- a gentleman.

Maria Ricci: Richard Murphy was supposed to say … "Uncle Paul sends his love" and the response was supposed to be "Isn't it nice to be Santa Claus in May."

Ed Foley: The gentleman kind of looks at him like, you know, you're crazy. You know, I don't know what you are talking about.

Maria Ricci: Richard Murphy approached a couple of people trying to locate this man.

Finally, Murphy located his target, Michael Zottoli, the spy based in Washington.

Maria Ricci: They walk across the street and Richard Murphy passes a bag … to Michael Zottoli … with $75,000.

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FBI surveillance of a money passs between Michael Zottoli [wearing backpack] and Richard-Murphy in New York City's Columbus Circle. FBI

Witnessing these exchanges of cash was significant.  Now the FBI knew how Russia was paying the spies.

Alan Kohler: It wasn't transferred in from a Russian bank … it wasn't in rubles. It was just in hundred dollar bills.

The next move was to figure out how the spies were communicating back and forth with headquarters, known as Center, in Moscow.

Maria Ricci: One of the priorities of the squad and the team was, can we do a covert entry? Can we get into the Murphy residence and find out how they are communicating with Center?

Maria Ricci: We waited until they were on vacation. … We conducted countless hours of surveillance … and determined the best way of entering the residence.

Alan Kohler: As the cases grow, we're able to get more intrusive techniques. … Bugging phones, putting microphones in houses. … We go in as cleaning crew, as Con Ed. … Often we pose as what we're not.

Maria Ricci: When we entered the Murphy home, one of the things we found was what we call the tradecraft box.

The tradecraft box is the spies' tool kit.

Maria Ricci: We found notebooks with codewords. … We found an odd piece of paper that had Alt-Control-E and then a 27-character password … And we found a bunch of floppy disks. … Initially when we looked at the discs, they appeared to be blank.

Until a prompt for that 27-character password appeared.

Maria Ricci: We inserted the 27 characters. It was a little bit of trial and error … but ultimately, we figured out the order. And we were able to enter the system.

Todd Shelton: Immediately when he hit the enter key, a window came up. Whoop! [gestures with his hands]. And they knew that they were into something big.

Not only had the FBI found a way into the spy ring, they made an extraordinary discovery: how the operatives communicated by embedding hidden messages in images.

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The Russian operatives communicated by embedding hidden messages in images, like these photographs. FBI

Todd Shelton: This is a sophisticated software system designed to … hide digital messages. 

Maria Ricci: It was a total game changer.  … From that point … we were able to read every message Richard and Cindy Murphy sent to Center, and every message Center sent back to Richard and Cindy Murphy.

Todd Shelton: For the first time, rather than being on the outside, looking in … we're reading in almost real time exactly what's happening.

Alan Kohler: So, we knew where to go, where to set up.

But just months later, a potential arrest across the border in Canada threatened to undo the entire FBI operation.

Todd Shelton: Sometimes, even the most sophisticated of intelligence operations can be undone by just some stroke of bad luck.

THE SHIFTING LANDSCAPE

Alan Kohler: We were racing against the unknown. We didn't know when or if the Russians were going to make a decision to pull the intelligence officers back, but we had to plan accordingly.

In early 2006, just as the FBI was closing in on the American spy ring, the surprise discovery of a Russian operative by Canadian intelligence threatened to shut down the FBI's investigation.

Alan Kohler: Our concern was the Russians would worry about …  the safety of the … spies …  that were based in the United States and would start to pull them back to Russia.

Maria Ricci: What do we do if every single one of … them … starts making a run for the border? If we wanted to arrest them, could we?

The FBI had advance warning that an arrest in Canada could take place any day. So, agents pulled an all-nighter, preparing a criminal complaint with the U.S. Attorney's Office in the Southern District of New York to arrest the spies

Todd Shelton: There was a serious sense of urgency that we needed to be prepared.

As it turned out, the Russian spy in Canada did not get arrested until months later.  In June 2006, the Washington-based spies Michael Zottoli and his wife showed up in New York. 

Maria Ricci: They don't do what normal tourists do. They do not go to see a Yankees game. They do not go to see a Broadway show. Instead, they go to Home Depot and they buy a shovel. … That was a very strong indicator to us that his next stop was going to be Wurtsboro, New York. 

Their hunch was dead on. They drove straight to that rest stop north of New York City, where two years earlier that stash of cash had been buried.

Maria Ricci: We had cameras there, and so we were able to capture Michael Zottoli going into the woods and digging up $60,000. … It's amazing.

After the Canadian spy was arrested, Russian intelligence did not end up recalling any of the U.S. based operatives. But something did change:  Christopher Metsos, the spy handler, disappeared.

Maria Ricci: As a result of the arrest in Canada … Christopher Metsos never came back to the U.S. after that.

With Metsos now out of the picture, the Russians needed a new way to distribute money. The solution? Have an official Russian diplomat working in New York hand it over to one of the spies.

Todd Shelton: In June of 2009, on the North White Plains station of Metro North Railroad, we see the … New Jersey conspirator … Richard Murphy, conduct another brush pass with a Russian diplomat.

Alan Kohler: When they were being sent instructions on where to meet, we were reading those instructions at the same time. So, we knew where to go, where to set up.

Ed Foley: That was my favorite location of all the meets, because … it really challenged us. There were cameras everywhere. … it was like a movie shoot. 

Ed Foley: We saturated the area with … multiple covert vehicles, rental vehicles, people out with dogs in the park.

Todd Shelton: We saw … Richard Murphy … take a circuitous route to access the station … which we believe was specifically to help him identify any surveillance that might be following him. You'll see him looking around. 

Ed Foley [in tunnel at train station]: You see him standing. … He checks his watch. He takes a deep breath. He tugs on his collar. And then he performs the act.

Todd Shelton: They don't even stop on the stairs. It really was a pretty seamless transition for such a large package.

The FBI learned Richard Murphy had in his possession $300,000 in cash and a flash drive containing a new covert communication system.

Alan Kohler: The brush pass in 2009 between Richard Murphy and another … Russian diplomat from the Russian mission … was actually quite significant for us.

Maria Ricci: It established that there was direct contact between the … intelligence officer … and … an official of the Russian government.

The FBI later followed Richard Murphy to Brooklyn, where he again met fellow Russian spy Michael Zottoli.

Maria Ricci: Richard Murphy was going to pass a $150,000 … and the flash drive containing the new covert communication system … to Michael Zottoli.

Maria Ricci: Instead of doing a quick meeting, they bought a cup of coffee … and they sat on a park bench for two hours.

Ed Foley: What's supposed to be a quick meeting … lasted quite a while. So long that the battery on the old mini camera started flashing … I'm thinking I'm not going to get the shot.

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The FBI later followed Richard Murphy to Brooklyn, where he again met fellow Russian spy Michael Zottoli. FBI

Todd Shelton: Near the conclusion of that meeting, we see Murphy reach into his backpack. He removes a … parcel, placing it into the bag and another small object, which we believe to have been that thumb drive. … And he hands those to Michael Zottoli. … Now we have another key link in the chain that we can ultimately use to forge a criminal charge of conspiracy.

As the FBI prepared charges to finally arrest the Russian spies, there was yet another surprise.

Alan Kohler: In 2009 a new breed of … intelligence officers … arrived in the United States, and that was in the form of Anna Chapman and Mikhail Semenko.

Todd Shelton: We saw this as a new threat. These were legitimate people with legitimate access to the United States.

Maria Ricci: Mikhail Semenko, he started out on a student visa. … Really smart kid. He knew five languages fluently.

Todd Shelton: He's in Seton Hall University. Again, another flag for us, a tie to an educational institution that provides fertile ground for spotting and assessing.

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Anna Chapman and Mikhail Semenko. were a new generation of spies. FBI

Todd Shelton: Anna Chapman -- young, hip, pretty. … She was a real estate professional. She opens a company called Property Finders. … it allows her to mix and mingle with people of wealth who may want to be looking for real estate in New York.

Maria Ricci: She was networking and going to a lot of parties and meeting a lot of people. … and I think she was probably going to stay in New York and be part of the financial center.

This new generation of spies also came with a new set of tools.

Todd Shelton: Anna Chapman …  has a piece of tradecraft -- a dedicated laptop computer specifically designed for her to load in intelligence reports, which could be transmitted to a corresponding laptop in the possession of a Russian diplomat, who also was an intelligence officer.

Maria Ricci: The video that you see is her shopping inside the department store. And … the Russian intelligence officer … being outside. … He … pretended to be on the phone. … She was bouncing from department to department. And … her laptop was in that red, white and black bag that she was carrying, and his laptop was in a briefcase.

Maria Ricci: And when those two computers were within a certain … proximity of each other, they would … be able to send a quick burst message back and forth.

Todd Shelton: We documented multiple occasions where this electronic exchange had happened.

This latest Russian technology shut the door on the FBI's ability to crack the new spies' communications.

Maria Ricci: We weren't able to … obtain those messages.

Todd Shelton: We see the change in the tactics being employed … with Semenko and Chapman.

Concerned that national security could be at greater risk, intelligence agencies had to act fast.

Leon Panetta: I was very impressed with … the fact that … we knew what the hell was going on here. But at the same time -- it raised a lot of questions in my mind about how many of these people do we not know about.

FALSE FLAGS

Alan Kohler: In counterintelligence, nothing happens by accident. … Everything has to happen for a reason.

By 2009, the FBI had been watching the Russian spy network for nearly a decade.  The Bureau worried about potential access to nuclear secrets, government officials and efforts to recruit new spies.  Now the FBI's concern grew with the arrival of that new generation of operatives.

Todd Shelton: Mikhail Semenko and Anna Chapman, both … Russian nationals … had entered the U.S. with the hidden job of conducting intelligence work on behalf of the Russian government. … They were younger … that provided potential new sources of access.

Todd Shelton: They have credentials that'll hold up to scrutiny. And it's a new threat that we sought to counter.

Alan Kohler: The decision was made that we were gonna take down the network in 2010.

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FBI Agents Maria Ricci, Todd Shelton, Alan Kohler and Ed Foley. CBS News

Alan Kohler: There were numerous challenges that we faced to make this happen. There were political issues. … We had just hit the reset button with Russia. So, Russia was our friend again.

Todd Shelton: We were fully aware that this was not a typical case. And the repercussions of our action could impact U.S. foreign policy.

Todd Shelton: There was a briefing conducted with the then-director of the CIA, Leon Panetta.

Leon Panetta:  My Russian section at the CIA … asked the FBI to come over and brief me. … They described what the situation was. … And then they showed me some of the surveillance they were doing, to kind of prove the point. … "We have verified that they are planted agents by Russia and that they continue to maintain close contact with the Russians."

Todd Shelton: It was a head spinning time for us. … Once the decision was made to arrest, and we started to move forward in the planning process, one of the key things that came about was identifying …  a window in which to act.

Alan Kohler: The summer of 2010 … specifically that last week in June, was really going to be the only time that we anticipated having all the … spies … in the country together.

Todd Shelton: If we miss that opportunity, it would be several months before we again found ourselves with all the U.S.-based … Russian intelligence officers … currently in the United States. … Everything really hinged on the final weekend.

That weekend, President Obama and Russian President Dmitry Medvedev were both attending international summits in Canada.

Alan Kohler: The last few days before the arrest was kind of a crazy time. … All the officers involved in headquarters went up 24/7 on all of our subjects. We had airplanes following them around.

Ed Foley: We used just about our entire physical surveillance cadre. … And it was the full court press.

The FBI had prepared criminal charges against the original four couples -- now they needed to get charges on the newest operatives: Anna Chapman and Mikhail Semenko. Agents in New York and D.C. initiated what's called a "false flag."

Alan Kohler: Essentially, a false flag is where an FBI undercover agent poses as a Russian intelligence officer and gives the target a task.

Todd Shelton: An overt act which we can document … an intelligence officer … as working on behalf of the Russian government.

On Saturday, June 26, 2010, an undercover FBI agent, posing as a Russian official, met with Mikhail Semenko in Washington, D.C.

Todd Shelton: The undercover agent gave him $5,000 wrapped in a newspaper and tells him that I need you to … load a dead drop … in a suburban Virginia park.

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In a Virginia park, the FBI documents Michael Semenko load a dead drop. FBI

Todd Shelton: Semenko takes the money, and the following day the FBI documents him through video surveillance. … He crawls down underneath the bridge and slides this newspaper back deep into the rafters of the bridge and then leaves.

Meanwhile in New York City, another FBI undercover agent also playing a Russian government official, met with Anna Chapman at a coffee shop. First, he got Chapman to admit that she was using her laptop to communicate with the Russian government; then to his surprise, she gave it to him.

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Surveillance video shows Russian spy Anna Chapman, wearing sunglasses, meeting with an undercover agent in a New York coffee shop  on  June 6, 2010.  AP/FBI

Todd Shelton: That was a great break. She's handing over the evidence, identifying what it was and how she's used it. That's huge.

To further strengthen the case, the FBI agent then asked Chapman to pass off a fake passport to another operative.

Alan Kohler: Chapman … accepted the offer to hand a fake passport to somebody else. And Semenko agreed to put some money underneath a bridge in Virginia. And that was enough for us to get the complaint and the charges against both of them.

But those summits in Canada put the arrests on hold.

Todd Shelton: It was the request of the administration that we delay our arrest until the U.S. President was back in the United States and the Russian president was away from North American airspace.

Ed Foley: Sunday, June 27th, 2010, I'll never forget. It was hot. I was in New Jersey … covering the Murphys. … We've come so far in 10 years and we don't need any screw ups at this point.  

Maria Ricci: We were waiting for the go ahead in Montclair. … This was the moment.  This was the moment that we've been working for, for so long. … So, there was a ton of pressure on us.

Todd Shelton: As things unfold during the day … we're in close communication with all of the offices.

Todd Shelton: That night, just before 11:00, the Boston conspirator Donald Heathfield had plane tickets to depart from Logan with one of his children to a European visit. So, we had a very short window in which to react. 

Alan Kohler: I was very concerned that it was going to fall apart.

THE SPY SWAP

Alan Kohler: The moment of the arrests was … the moment we've all been waiting for … for years. … Decades.

Todd Shelton: We were in the Strategic Information Operation Center at FBI headquarters. As soon as we know the Russian president is out of North American airspace, the U.S. president is back in the United States … we … move to affect the arrests.

ERICA HILL | "CBS Evening News," June 28, 2010: Tonight, we're learning of ten arrests here in the U.S. The suspects accused of being secret agents for Russia.

BOB ORR | CBS NEWS: A throwback to the cold war. Phony names, cryptic codes, money drops…

WBZ BOSTON NEWS REPORT: A husband and wife from Cambridge are in federal custody tonight. They're accused of being Russian spies.

Maria Ricci: There's like this incredible surge of emotion coming from all directions. This amazing excitement about accomplishing something this massive after so long.

Alex Coon: I got a call … it was around 9:30 at night on my phone and … the person on the other line said … "Are you Alex Coon, the manager?" And I said, "Yeah, absolutely." And they said, "Do you know that Tracey Ann Foley, who works for you, was just arrested for being a Russian spy?" … I – I - I thought it was a prank.

Craig Sandler: A friend of mine … said, "Craig, do you know a guy named Don Heathfield?" … "Sure. He's a good guy. Why?" … And my friend said, "Well, he's been arrested as a Russian spy." … I can't really properly describe what a strange feeling it is to have everything that you think you know about a person be upended.

FBI Richard Murphy arrest
Richard Murphy is taken into custody by the FBI outside his Montclair, New Jersey, home. FBI

In Montclair, New Jersey, neighbors of Richard and Cynthia Murphy were also stunned.

Elizabeth Lapin: The night of the arrests, I have to say, everybody was in the streets. It was almost like a carnival.

Stanley Skolnik: Crowds were gathering. There were cars parked everywhere. FBI, police. … Nobody could possibly have understood that there was, going on in this neighborhood, a spy ring. It was completely a shock.

Ed Foley: When you're working somebody for so long, you kind of get to know them. … The Murphys were my favorite. We watched their kids be born.

Maria Ricci: They were … toddlers when I first joined the case and I watched them grow up into really great, beautiful young ladies. … [emotional] Those two little girls, definitely -- definitely impacted me. [pauses] That was hard. … In a lot of ways, I feel like I [laughs] knew them better than I know some members of my own family.

APTOPIX US Russia Spy Arrests
The FBI arrested the 10 on June 27 charging them with acting as unregistered foreign agents for Russia.  U.S. Marshals via AP

With the 10 spies in custody, talks quickly began between the U.S. and Russia about a spy swap. Four western spies were being held in Russian prisons. Now the U.S. wanted them freed.

Leon Panetta: I called my Russian counterpart, a guy named Fradkov. … And I said, "So we've picked up these 10 individuals. …They're your people." … He said, "Yes, they are my people." Everybody in the room kind of said, "Wow!" You know, he's admitting that … these were spies. … From that point … it became a negotiation.

Leon Panetta: We agreed to set up an exchange in Vienna.

KATIE COURIC | CBS EVEING NEWS: Tonight: A spy for a spy. The biggest U.S.-Russia spy swap since the Cold War.

After being interrogated, the spies, along with most of their children, were put on the same plane. Only the sons of the New York spies, who were older, were allowed to stay in the U.S.

Todd Shelton: Up in the front of the plane, there were members of U.S. intelligence. Farther back in the plane were all the … Russians.

After secretly and silently watching the Russian spies for years, the agents could now chat with them.

Alan Kohler: Some of them were very sullen. Some of them were very philosophical about it.

Todd Shelton: Richard Murphy was frustrated. I think that … he … thought that he was a victim of someone else's mistake.

Todd Shelton:  Michael Zottoli seemed very easygoing. … One of the FBI people on the plane … asked him, you know, "How long would you have stayed?" And Zottoli's response was, "I would have stayed forever. I mean, I liked it there. We had a great life."

Todd Shelton: As an intelligence official, the number of opportunities you have to talk directly to your adversary … that's not much. … It really was a surreal experience.

Alan Kohler: There was a certain feeling of closure … talking with them and seeing them and knowing this was it.

BOB ORR | "THE EARLY SHOW": On an airport tarmac in Vienna, Austria, the spy swap was completed …

Leon Panetta: Russia was delivering the four individuals we wanted to the same location. And they literally passed each other on the runway. … It was right out of the movies [laughs].

Back in Russia, the spies were given a hero's welcome. Some were even rewarded with high-profile jobs working for state-run agencies. Anna Chapman launched a career in television and modeling. In the U.S., the mood was decidedly different.

Leon Panetta: I don't think there's any question that … this operation protected our national security. … The whole purpose of these 10 spies was to be able to penetrate sensitive positions.

Maria Ricci: A lot of people ask me about this case, and they say, "Well, they never conducted espionage." And my response is, if they had, that would have been the single greatest failure of my career." My job was to ensure that they were not able to get close enough to commit espionage.

Todd Shelton: If you have a well-executed counterintelligence operation, nothing's taken. Nothing's stolen.

Alan Kohler: The thing about counterintelligence is we're never really going to defeat our adversaries. … All we can do … is beat them back.

Todd Shelton: At FBI headquarters … we were thinking, what's the next threat? How long do we have before the Russians replace this network with another? And how are we going to get on that network and have a success similar to Ghost Stories? 

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