IT WAS THE middle of the night and the apartment in Hoboken, New Jersey, was dark. Derek Pieper was waiting nervously outside. His job was to be the lookout. The family who lived there in 2005 was on vacation but he had to make sure no nosy neighbors turned up unexpectedly while his colleagues turned over the place. Inside, Maria Ricci and her small team, dressed in black, were hard at work. The team was small because the two-bedroom apartment was. They did not want to literally fall over each other and knock something over. The atmosphere was tense, as it always was. They had to work fast but carefully. Everything would have to be put back exactly where it was. An FBI covert search looks an awful lot like a high-end burglary. But, apart from being legally authorized, the difference was that the aim was not to take anything away that might be missed. The team inside worked their way through the apartment methodically—the couple’s clothing, the toys that belonged to the two girls who shared a room. Then they made their way to the TV in the family room. It sat on a large cabinet. In the cabinet were lots of shoe boxes. Inside one were pictures of family trips. The father of the family liked to take photos and there were plenty more like that. Another box had the school report cards for the two girls who lived in the apartment. The reports were glowing. But one box was different. Inside was a phone, notebooks, and floppy disks. It looked interesting but at the time no one on the team could have known that the contents of that box would transform the investigation into the illegals.
The apartment belonged to the Murphy family. Richard Murphy was supposedly born in Philadelphia. His wife, Cynthia Hopkins, known as Cindy, was from New York. Richard had a round face and was slightly pudgy. He could get grumpy. Cindy was thinner, stylish, with short dark hair. She could appear dour but could turn on a smile when she needed to. They were another pair of illegals, but with different cover than Heathfield and Foley. They arrived in the second half of the 1990s posing as citizens born in America. Doing this had required using fake birth certificates to back up their story. The quality of these certificates, the FBI would later note half-admiringly, was high-class. “They were incredible,” says one agent. Using a fake certificate in America relied on the fact that birth certificates were different in each state and varied from year to year, so an official would almost never spot anything amiss unless they were already suspicious. Additionally, there was no central database to check. But even if they were brilliant fakes, they were still fakes, which meant this couple’s backstory was weaker than Heathfield and Foley’s. When the FBI searched a Manhattan safety deposit box belonging to Richard Murphy, they photographed his birth certificate. They contacted the Philadelphia Bureau of Vital Statistics, who said no record could be found for either Murphy or his supposed father.
Richard Murphy studied international affairs part-time at the New School in New York from 2002 to 2005, a chance to build cover and contacts. In a strange coincidence, his adviser on the faculty was the great-granddaughter of former Soviet leader Nikita Khrushchev. She was puzzled by the young man with an Irish name but a Russian accent. “You know when you meet your countryman even if this countryman speaks a different language and pretends not to be your countryman,” she later said. She found it odd that he never tried to speak Russian to her or ask about her family. As a result, she decided she would not ask about his. Perhaps he was someone who wanted to put his Russian past behind him, she thought. “He was a little dour I must say. He was not always happy, which is a bit Russian because, you know, misery is what we do best.”
The couple moved into the small Hoboken apartment in 2003 with their two daughters, Katie and Lisa. Neighbors suspected nothing. One family, who also had two young kids, got to know them well. Cindy would cook up a lasagna and cakes—once making cookies shaped like the Statue of Liberty. The two families would barbecue together out on the back patio and go ice-skating and hiking together. Richard and Cindy seemed to enjoy each other’s company but were not very “touch-feely,” the other couple thought. An FBI team watching their every move would get to know the couple and the state of their marriage much better than the neighbors, though.
The illegals investigation was tightly held within the FBI. It began with the New York field office because that was where Poteyev had been recruited. But once it became clear it was going to offer insights into illegals operating across the country, headquarters in Washington, DC, took on a coordinating function. Initially it was known as “the backroom cases” to the small group read into the investigation in headquarters. It sat with the FBI’s SVR unit, whose job was to track SVR activities in the United States. Their main office normally had around six to eight people working together. But there was a small back room that had four more pods that people could work out of. This “back room” was where the illegals cases were coordinated from and where all the highly classified materials were kept. This was a counterintelligence case rather than a counterespionage case. The latter were focused on arresting those, normally Americans, who were passing on secrets to foreign powers; the former were more about understanding the activities of a foreign intelligence service operating inside the United States and more rarely led to arrests.
Alan Kohler, a New Jersey native, joined the SVR unit in 2003, having previously served as a spy-catcher in the Washington field office. A year and a half later he was promoted to chief of the SVR unit and decided it was time to give the whole investigation a formal code name (there were separate code names within each field office and for each target). A computer spits out a list of five options a day for the bureau. If you do not like any, then you can log in the next day and get another five and keep waiting it out until you get one you like. Or you can come up with your own and take it to the team for them to approve. An analyst in the SVR unit came up with a list of names and brought it to Kohler. The others are lost to history, but one stood out as her favorite—Ghost Stories. The FBI tries to shy away from a code name that tells you too much about the case it refers to—after all, the whole point of a code name is that it hides the truth. But agents do sometimes like to come up with something a bit clever or that has an inside joke or reference. In this case everyone agreed that Ghost Stories fit perfectly with the world of dead doubles. And so it was settled.
Ghost Stories would be at once one of the largest but also one of the most sensitive counterintelligence investigations in the bureau’s history, revealed in detail here for the first time. The investigation would eventually sprawl across the country, with field offices in Washington, Chicago, Seattle, Boston, as well as New York involved, each passing on news of significant developments through headquarters. The New York field office was the hub for much of the investigative work over the decade. It was where the case had started and many of the illegals would live around the New York region. In 2006, Kohler was promoted to the New York field office to supervise the counterespionage team and became the supervising agent for the illegals cases there, through to the end.
In New York, he would work with two younger officers who would play a key role in the investigation into the Murphys and the wider illegals. Maria Ricci, an Italian-American with an infectious laugh, had grown up in New Jersey. She was not one of those people who had dreamed of being an FBI agent as a child. “If someone said you were going to be an FBI agent, I would have thought it was the most ridiculous thing I’d ever heard in my life,” she says. She had been an English major and then trained as a lawyer, but after five years practicing decided she wanted to work in public service. She applied to join the FBI as a lawyer. She was told there were no openings for lawyers but was asked if she would be interested in being an FBI agent. In 2002, to her surprise, she found herself as an agent with