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Microsoft Says 12th Alleged Russian Spy Was Employee

Microsoft Corp. said the 12th alleged member of a Russian spy ring operating in the U.S. was an employee at the company’s Redmond, Washington, headquarters.

The man, a Russian citizen in his early 20s named Alexey Karetnikov, worked for Microsoft as a software tester for about nine months, a spokeswoman for Microsoft in Moscow, who declined to be identified in line with company rules, said by e-mail today.

Russia’s Foreign Ministry declined to comment on the news when contacted by Bloomberg.

Ten members of the spy ring pleaded guilty to conspiring to serve as unregistered foreign agents on June 8 in a U.S. federal court in Manhattan. They admitted to carrying money or coded messages, secretly communicating with Russian officials and instructing others on how to find information useful to Russia. Their objective was to infiltrate U.S. policy-making circles after constructing false American identities, prosecutors said.

Karetnikov was deported on charges of violating U.S. immigration laws, Itar-Tass reported, citing Matt Chandler, a spokesman for the U.S. Department of Homeland Security. Karetnikov admitted to the violation and agreed to deportation to avoid court proceedings, the state-run news service said.

Software Company

The Facebook page of a person identified as Alexey Karetnikov shows that he is married and graduated from St. Petersburg State Polytechnic University in 2009. He worked for a company called “Neobit” in addition to Microsoft, according to the Facebook page.

A St. Petersburg-based software developer called OOO NeoBIT lists Katernikov’s university among its partners and the Federal Security Service, the main successor to the Soviet-era KGB, among its clients, according to the company’s website.

No one at NeoBIT’s offices answered repeated calls from Bloomberg News.

Strategic Forecasting Inc. said yesterday another member of the ring tried to get the risk advisory group to install software he said his company had developed.

Assumed Names

A man calling himself Donald Heathfield held five meetings with an employee of Austin, Texas-based Stratfor in an effort to get the firm to use his program, Chief Executive Officer George Friedman said in an e-mailed report. Heathfield, who later identified himself as Andrey Bezrukov, was one of 10 people U.S. authorities traded for four Russians on July 9 in Vienna.

“We suspect that had this been done, our servers would be outputting to Moscow,” Friedman said. “We did not know at the time who he was. We have since reported the incident to the FBI.”

Bezrukov and his partner in the network were sentenced to time served and deported after agreeing to give up their home on Trowbridge Street in Cambridge, Massachusetts, and all the funds in four bank accounts. Bezrukov’s partner, who was identified as Tracey Foley at the time of her arrest, told the court her real name was Elena Vavilova.

Bezrukov, Vavilova and the other members of the spy ring are being debriefed at the Foreign Intelligence Service’s compound in southern Moscow, Moskovsky Komsomolets, Russia’s second-biggest newspaper by circulation, reported yesterday, citing unidentified Russian security officials. That process may last weeks, the Moscow-based daily said.

Some of the 10 agents may continue to work with the security service, while others will be free to pursue new careers, Moskovsky Komsomolets said.

To contact the reporters on this story: Anastasia Ustinova in St. Petersburg at austinova@bloomberg.net

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