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Wednesday, July 7, 2010 - 11:39am

Russia Spy Suspects Transferred Amid Talk Of Swap

A federal indictment against 11 people accused of operating under deep cover for the Russian intelligence service was unsealed in a federal district court in Manhattan on Wednesday, as U.S. and Russian diplomats negotiated how the group might be swapped for prisoners being held in Russia.

Five suspects in the case were hastily ordered to New York amid signs that a swap deal was in the works.

The indictment doesn't include any new charges, but it does indicate that federal prosecutors are looking to have the defendants forfeit any assets they had that were linked to the charge of conspiracy to commit money laundering. That might mean that their homes would be turned over to the U.S. government.

Only 9 of the 11 defendants are facing money laundering charges. And none of the suspects has been directly charged with espionage. Instead they face charges of acting on behalf of a foreign government without registering.

The FBI arrested 10 of the 11 people implicated in the alleged spy ring last month. The 11th suspect was arrested in Cyprus and was released on bail. He has subsequently disappeared.

Prosecutors claim that Russian intelligence dispatched the group to the U.S. years ago. Their assignment: to blend in and try to make friends with key policymakers and leaders in the U.S. and, as part of that friendship, glean any information they might have to offer.

Russian officials initially denied that the group was part of their intelligence service. Now, NPR has learned, discussions are underway for an old-fashioned spy swap: the 10 people arrested last month for some unknown number of people accused of spying for the U.S. in Russia.

The first hint of the negotiations came Tuesday when the bail hearing of one of the accused, a journalist named Vicky Pelaez, was postponed without warning. A judge had already ruled that she could be released on $250,000 bail. The government appealed the decision and a ruling was supposed to occur yesterday. Then it didnt.

Sources tell NPR that by then the discussions with Russian officials had already started and having one of the defendants out on bail would have complicated the negotiations.

Officials tell NPR they expect the group will plead to lesser charges and then be deported to Russia. In exchange, U.S. officials have floated a list of names of prisoners in Russia who have been accused of spying for the U.S.

One of the people allegedly under discussion to be part of the exchange is a Russian scientist, Igor Sutyagin, who was accused of passing secrets to the CIA. He was convicted in a Russian court in 2004 of spying for the U.S. He was sentenced to some 15 years in prison.

The indictments unsealed Wednesday included the order to move all the suspects to New York to face charges.

Officials say that, too, could be a key aspect of the spy swap. Having the defendants all in the same place would make moving them to Russia that much easier.

Officials cautioned, though, that discussions were continuing and could break down. [Copyright 2010 National Public Radio]