Cyprus red-faced in disappearance of Russian spy-ring suspect on bail

NICOSIA, Cyprus | Russian money and influence have long made a splash on this Mediterranean resort island, where a suspected Russian spy paymaster vanished after being allowed to walk free on bail.

The ties go right to the top: Russian energy giant Lukoil has a big presence, and the Greek Cypriot president, a communist who studied in Moscow, is expecting an illustrious visitor in October - Russian President Dmitry Medvedev.

Embarrassed authorities searched airports, ports and yacht marinas Thursday for the suspect, identified as Christopher Robert Metsos. Freed on $33,000 bail, he failed to show for a required meeting with police on Wednesday.

There’s no evidence for now that the deep Russian presence in Cyprus played a role in his release, but the Cypriot government is under pressure to explain the bewildering fumble involving a man wanted in the United States for reportedly operating a Russian spy ring there.

Nine others charged in the case faced bail hearings Thursday in federal courts in New York, Boston and Alexandria, Va. A 10th defendant was denied bail on Monday. Most of the suspects are charged with crimes that carry penalties of up to 25 years.

The case, a throwback to the Cold War era, recalls Cyprus‘ own heyday as a place of intrigue, a listening post for spies of all stripes who maneuvered in the Middle East and a convenient transit point for the shady figures of espionage.

Greek Cypriot police examined surveillance video from crossing points on the war-divided island, fearing the suspect may have slipped into the Turkish Cypriot north, a diplomatic no-man’s land recognized only by Turkey.

But the fugitive might feel more at home in the Greek-speaking south, where tens of thousands of Russians own mansions and offshore accounts, read Russian-language newspapers and send their children to Russian schools. Recently, the tourist town of Limassol hosted a Russian festival that was opened by Greek Cypriot President Dimitris Christofias.

Cyprus is a top gateway of foreign investment into Russia and is a popular destination for Russian capital because of low taxes. Cypriot firms have been used as holding companies to avoid taxation in Russia. In recent years, Cyprus took steps to open up bank records so Russian authorities could track tax dodgers.

The political links are tight, too. Mr. Christofias, the only communist head of state in the European Union, earned a doctorate in history in Russia and speaks the language. He has welcomed Russian support for peace talks with the Turkish-speaking north, and his foreign minister met his Russian counterpart last week.

In Nicosia, Justice Minister Loucas Louca admitted that a judge’s decision to release Mr. Metsos “may have been mistaken” and said authorities were examining leads on his possible whereabouts.

“We have some information, and we hope that we will arrest him soon,” Mr. Louca told reporters.

The balding, bespectacled Mr. Metsos, 54, is wanted in the United States on charges that he supplied money to the spy ring that reputedly operated under deep cover in America’s suburbs.

In Washington, the Justice Department expressed disappointment Thursday that Mr. Metsos was freed on bail. “As we had feared, having been given unnecessarily the chance to flee, he did so,” said Dean Boyd, a spokesman for the department’s National Security Division.

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