Accused Russian Spy Confessed, Prosecutors Say

July 1, 2010— -- One of the alleged Russian spies arrested this week has admitted he works for that country's covert intelligence service, prosecutors said in court papers filed today as part of an effort to persuade a federal judge to deny bail to the group accused of being foreign agents. Several of those arrested have allegedly been tracked using fake passports, collecting cash in brush passes from Russian intelligence agents, and recorded rehearsing messages for their Russian handlers, the court filing says.

"There is little need here for speculation as to what will happen if the defendants are permitted to walk out of the court," the nine-page petition filed with U.S. Magistrate Judge Ronald L. Ellis said. They will flee."

The documents reveal significant new details about the case the U.S. has built against the nine defendants, who have been accused of being foreign agents without registering – a far less serious crime than espionage. Several of the defendants were making their first court appearances today.

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For instance, prosecutors said they intercepted a message in 2009 from Moscow Center to the New Jersey conspirators that "the only goal and task of our Service and of all of us is the security of our country … Only to reaching this goal you were dispatched to US, settled down there, gained legal status and were expected to start striking up usefull [sic] acquaintances, broadening the circle of your well placed connections, gaining information and eventually recruiting sources."

The letter submitted by Preet Bharara, the U.S. Attorney for the Southern District of New York, revealed they had been bugging the Yonkers home of one alleged conspirator, who used the name Juan Lazaro, since 2002. Officials said after his arrest, he confirmed to federal agents that Lazaro was not his real name, that his Yonkers house had been paid for by Russian intelligence services, and that, although "he loved his son, he would not violate his loyalty to 'the Service' even for his son." Lazaro refused to provide his real name.

Prosecutors also said in the filing that they had decrypted a May, 2008 message in which the New Jersey woman who called herself Cynthia Murphy advised her handlers that there were "three major ways for [Richard Murphy] to start [his] career for Service's purposes," one of which was, among other things, to get involved in "dem./rep. campaing [sic] HQ in your area."

Hillary Clinton

Among Murphy's contacts was financier Alan Patricof, who said in a statement Wednesday that he retained Murphy's financial services firm more than two years ago, met with Murphy a few times, and spoke with her frequently on the phone. "We never—not once—discussed any matter other than my finances and certainly she never inquired about, nor did we ever discuss, any matters relating to politics, the government, or world affairs," Patricof said.

Patricof raised at least $100,000 for Hillary Clinton's presidential campaign in 2008, according to figures compiled online by Public Citizen.

Clinton spokesman P.J. Crowley told ABC News there is "no reason to think that the Secretary was a target of this spy ring," and added that the secretary of state has not been contacted by investigators.

"This is like playing six degrees of Kevin Bacon," Crowley said. "There may be a connection there, but it doesn't have any real meaning."

The lawyer for one of the suspects told a judge Thursday that the only thing his client had infiltrated are "neighborhoods, cocktail parties and the PTA," according to the Associated Press. The attorney for the man who called himself Donald Heathfield and his wife, Tracey Lee Ann Foley, of Cambridge, Mass., appeared in federal court in Boston on Thursday for a bail hearing. Afterwards, the lawyer, Peter Krupp, told reporters he considered the evidence revealed so far against his client "extremely thin."

The primary case prosecutors made in trying to prevent the defendants from being released at bail was based on two factors. One was that a key defendant, released on bail in Cypress, has already fled. Police on Thursday searched airports, ports and yacht marinas to find the man, who was using the name Christopher Metsos, after he failed to show up Wednesday for a required meeting with police, according to AP.

In addition, prosecutors said all of the defendants, prosecutors argued, were well trained at spy tradecraft and could easily disappear under false identities. And the defendants wouldn't even have to travel far, the prosecutors argued. They would need only to make it to the Russian consulate in New York City to find refuge from American justice, prosecutors said.

Among Murphy's contacts was financier Alan Patricof, who said in a statement Wednesday that he retained Murphy's financial services firm more than two years ago, met with Murphy a few times, and spoke with her frequently on the phone. "We never—not once—discussed any matter other than my finances and certainly she never inquired about, nor did we ever discuss, any matters relating to politics, the government, or world affairs," Patricof said.

Patricof raised at least $100,000 for Hillary Clinton's presidential campaign in 2008, according to figures compiled online by Public Citizen.

Clinton spokesman P.J. Crowley told ABC News there is "no reason to think that the Secretary was a target of this spy ring," and added that the secretary of state has not been contacted by investigators.

"This is like playing six degrees of Kevin Bacon," Crowley said. "There may be a connection there, but it doesn't have any real meaning."

The lawyer for one of the suspects told a judge Thursday that the only thing his client had infiltrated are "neighborhoods, cocktail parties and the PTA," according to the Associated Press. The attorney for the man who called himself Donald Heathfield and his wife, Tracey Lee Ann Foley, of Cambridge, Mass., appeared in federal court in Boston on Thursday for a bail hearing. Afterwards, the lawyer, Peter Krupp, told reporters he considered the evidence revealed so far against his client "extremely thin."

The primary case prosecutors made in trying to prevent the defendants from being released at bail was based on two factors. One was that a key defendant, released on bail in Cypress, has already fled. Police on Thursday searched airports, ports and yacht marinas to find the man, who was using the name Christopher Metsos, after he failed to show up Wednesday for a required meeting with police, according to AP.

In addition, prosecutors said all of the defendants, prosecutors argued, were well trained at spy tradecraft and could easily disappear under false identities. And the defendants wouldn't even have to travel far, the prosecutors argued. They would need only to make it to the Russian consulate in New York City to find refuge from American justice, prosecutors said.