Russian Spy Ring Aimed to Make Children Agents

Officials say Russian agents Donald Heathfield and Tracey Foley sought to groom son Tim Foley to be a spy.

A Russian spy ring busted in the U.S. two years ago planned to recruit members' children to become agents, and one had already agreed to his parents' request, according to current and former U.S. officials.

When the suspects were arrested in 2010 with much fanfare, official accounts suggested they were largely ineffectual. New details about their time in the U.S., however, suggest their work was more sophisticated and sometimes more successful than previously known.

One of them infiltrated a well-connected consulting firm with offices in Manhattan and Washington, D.C., by working as the company's in-house computer expert, according to people familiar with the long-running U.S. investigation of the spy ring.

The effort to bring children into the family business suggests the ring was thinking long term: Children born or reared in America were potentially more valuable espionage assets than their parents because when they grew up they would be more likely to pass a U.S. government background check.

A spokesman at the Russian embassy in Washington declined to comment. Officials in Moscow have previously acknowledged the spy ring but haven't commented further. All the captured suspects eventually pleaded guilty to acting as secret agents for the Russian government.

Tim Foley was among the children most extensively groomed for a future spy career, officials say. Though he wasn't American-born, his parents lived in the U.S. for more than a decade, under the assumed names Donald Heathfield and Tracey Foley. Mr. Foley was 20 when his parents were arrested and had just finished his sophomore year at George Washington University in the nation's capital.

His parents revealed their double life to him well before their arrest, according to current and former officials, whose knowledge of the discussion was based on surveillance by the Federal Bureau of Investigation that included bugging suspects' homes. The officials said the parents also told their son they wanted him to follow in their footsteps.

He agreed, said the officials. At the end of the discussion with his parents, according to one person familiar with the surveillance, the young man stood up and saluted "Mother Russia." He also agreed to travel to Russia to begin formal espionage training, officials said.

Officials wouldn't say where or when the conversation between Mr. Foley and his parents took place or whether he made it to Russia before the spy group was arrested, though they said he eventually went there. Many details of the investigation remain classified.

Peter Krupp, a Boston lawyer who represented Mr. Foley's father in the case, called the U.S. officials' accounts "crap." The lawyer said it would have been too risky for the parents to reveal the operation to their son.

Mr. Krupp said that since the summer of the spy roundup, Mr. Foley—who wasn't accused of any wrongdoing—has tried to return to the U.S., but unspecified obstacles have prevented him from doing so, and he remains in Russia. Efforts to find him there were unsuccessful. A lawyer who represented Mr. Foley's mother during the U.S. case didn't return calls seeking comment.

Based on their extensive surveillance of the secret agents and their messages to handlers back in Moscow, U.S. counterintelligence officials believe the grooming of Mr. Foley was part of a long-term goal for some of the group's children to become spies when they got older.

At the time of their arrests, the spies had seven children ranging in age from 1 to 20, most U.S.-born, and one agent also had an older son from a relationship before she joined the espionage network. Anna Chapman, the spy who garnered the most attention because of her glamorous looks, didn't have children.

Though U.S. officials believe the ring planned to recruit some members' children, not every child was set along this path. One child, a teenager, was allowed to stay in the U.S. after his parents were arrested, and officials said the son isn't viewed as a risk to national security. His father, who went by the name Juan Lazaro, wanted his son to become a concert pianist, according to a former colleague of the father. A lawyer for the family declined to comment.

Most members of the ring were what are known in espionage parlance as "illegals"—agents who go to a country using a false identity and without official cover such as a diplomatic position. If caught, illegals have to assume their home country won't come to their rescue.

Ring members were trained agents of the SVR, a successor agency to the KGB, according to court documents filed by federal prosecutors in New York. U.S. authorities say they worked under the direction of SVR headquarters, known in the West as "Moscow Center."

Besides the plans to recruit children, the new details about the spy ring show more about what its members were up to.

U.S. officials say one of them, Richard Murphy—whose real name was Vladimir Guryev—worked for several years as the in-house computer technician at a U.S. consultancy called the G7 Group, which advised clients on how government decisions might affect global markets. The firm's experts included its chief executive, Jane Hartley, an active Democratic fundraiser, and Alan Blinder, a former Federal Reserve vice chairman.

The infiltration is further evidence the spying focused on economic secrets as well as military and political information.

Mr. Murphy came to the G7 Group through a temporary-help agency in the early 2000s and stayed about three years, according to Ms. Hartley, who said she eventually concluded he didn't have the technical sophistication the firm required. She said she didn't believe he used his position to steal information.

Mr. Blinder said he didn't believe he knew or even had heard of Mr. Murphy. "My reaction, of course, is surprise. The G7 Group wasn't the sort of place a Russian spy would find interesting," said Mr. Blinder, who is a professor at Princeton University.

A lawyer who represented Mr. Murphy after his arrest said she wasn't aware he had worked for a firm in Manhattan. After Mr. Murphy left the G7 Group, Ms. Hartley sold it, and many of its principals later reformed under a different name.

The spies' false identities, also called "legends," were good enough for them to get jobs and mortgages and start families in America, but they weren't airtight. A background check for a job with the U.S. government or a government contractor might have exposed them. The spies were careful not to try to get too close to the heart of U.S. government, according to interviews and court documents.

Mr. Murphy spoke with an accent and didn't socialize well with his co-workers, according to Ms. Hartley. Difficulties he had blending in at the G7 Group underscore the value agents' children might have had to Moscow, being fully Americanized with flawless English.

One purpose of having such agents in the U.S. was to act as go-betweens for other operatives who might have been more closely monitored by U.S. counterintelligence, the current and former U.S. officials said.

"There was much more to this than just trying to make friends with important people," said one official. "This was a very long-term operation."

After the parents were arrested, the children became an important part of the negotiations between the Russian and U.S. governments.

The admitted secret agents were eventually flown to Austria, where, in a scene reminiscent of a Cold War spy drama, they were swapped on a Vienna airport tarmac for four men who had been imprisoned in Russia, most on charges of spying for the West.

Write to Devlin Barrett at devlin.barrett@wsj.com