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Credit to Author: Noah Shachtman| Date: Tue, 25 Feb 2025 11:00:00 +0000<\/strong><\/p>\n Vladislav Klyushin was<\/span> having, by any measure, an awful day. The judge in his case had brushed aside his lawyers\u2019 arguments and his friends\u2019 appeals for leniency. She handed down a tough sentence: nine more years in US federal prison, on top of an order to forfeit a fortune, $34 million.<\/p>\n But if Klyushin was upset about the ruling, he didn\u2019t show it. The then 42-year-old tech executive from Moscow seemed upbeat\u2014quick with a smile on his pinchable cheeks and unerringly polite, just as he had been during his arrest near a Swiss ski resort in March 2021, his months of detention in Switzerland, his extradition to the United States that December, his indictment and trial on hacking and wire fraud charges, and his swift conviction. Klyushin \u201chad a confidence all along that eventually the Russians would get him back,\u201d one of his defense attorneys told me. He seemed certain that his protectors in the Kremlin would spare him from serving out his full sentence.<\/p>\n There were times when that certainty seemed cocksure. America\u2019s federal prison system held 35 Russian nationals. Surely not all of them were getting traded back. His family and friends were distraught. Within less than a year, though, Klyushin was proven right. On August 1, 2024, he was unshackled and put on a plane back to Moscow\u2014one of the 24 people involved in the largest, most complex US-Russian prisoner exchange ever.<\/p>\n You probably heard something about the swap<\/a>. It\u2019s the one that brought Wall Street Journal reporter Evan Gershkovich and former US Marine Paul Whelan home to the United States\u2014and sent back to Russia a Kremlin-linked assassin and a husband-and-wife duo of spies who were so deep undercover that their kids didn\u2019t learn they were Russian until they got on the plane. In coverage of the exchange, Klyushin was treated as a footnote. That was a mistake, if an understandable one. And not just because he was at the center of one of the bigger insider trading cases of all time.<\/p>\n The escalating conflict between the US and Russia has played out in all sorts of ways over the past decade. One American captive was swapped<\/a> just two weeks ago; at least 10 more US citizens<\/a> remain imprisoned in Russia. And now, there\u2019s a Kremlin-friendly occupant of the Oval Office, one who loves to be seen as making deals. One is in global financial markets, with America and its allies walling more and more of Russian industry off from the international economy. There are always creative individuals who can find cracks in that wall, though, and Klyushin sure seems to have been one of them. You don\u2019t have to squint too hard to see his scheme\u2014which ultimately netted $93 million\u2014as a way to bring capital into Russia, despite the global blockade. The contest has also been evident on the streets of Moscow, where a secretive Kremlin security force has grabbed American citizens, who are charged with bogus crimes, and then dangled them in trades for killers, spies, and associates of the Kremlin. It\u2019s kidnapping, hostage taking, and it\u2019s effectively all being done on President Vladimir Putin<\/a>\u2019s orders. Oftentimes, Americans are taken precisely for their value as assets to be later exchanged\u2014to get back people like that assassin, or this financial crook, Klyushin. He wasn\u2019t at the very top of Moscow\u2019s trade list. But Klyushin was much closer, and more important to the Kremlin, than either side was willing to admit.<\/p>\n To the outside<\/span> world, Klyushin had a rags-to-riches, fairy-tale life, with a gauzy wedding video to prove it. In a montage later obtained by US prosecutors, Klyushin dives into a country club pool; his bride-to-be, Zhannetta, sips pink champagne on an outdoor bed draped with chiffon and roses; he picks her up in a white Porsche convertible; she\u2019s gorgeous in her backless gown; he\u2019s handsome, if a little goofy, in his tux and subtle mullet; they dance and laugh and stare meaningfully at the fireworks punctuating the perfect night. \u201cI do not know a more decent person than my husband,\u201d Zhannetta later wrote to the judge in his case.<\/p>\n They had three children, adding to the two Klyushin had from a previous marriage. By all accounts, he was a doting father, a far cry from his own, a man he never met, or his stepfather, who was killed during a car robbery when Klyushin was 14. He emerged from a childhood of poverty to build a number of businesses. First, he was in construction and marketing; later, he ran an IT company called M13, which sold media- and internet-monitoring software to Russian government agencies. Early customers in 2016 included the Ministry of Defense and the office of the presidential administration, where Putin\u2019s propaganda chief became an important proponent of M13. The company\u2019s software was used to keep tabs on hundreds of Telegram<\/a> channels for a Kremlin worried about the \u201cintroduction of unverified or knowingly false information,\u201d according to one local news report.<\/p>\n Klyushin\u2019s rise was rapid, taking in more than $30 million in government contracts in a decade. That confounded some of his professional peers. (\u201cThe company and its owner are unknown to most in the IT community,\u201d a respected Russian business journal noted in 2021.) But it brought him influence and admirers. He supported the arts and rebuilt the roof of the monastery on Moscow\u2019s Lubyanka Street, a few blocks down from the headquarters of Russia\u2019s spy service, the FSB. One friend later hailed Klyushin as an \u201ceco-activist\u201d (for planting \u201cseveral spruces in the yard\u201d) and a \u201cpet-lover\u201d (his \u201cfavourite pet is a dog\u201d). \u201cBroad-minded, well-read, educated,\u201d gushed his family friend and tennis coach. An M13 employee said that a conversation with Klyushin \u201cis like getting a lesson from a guru.\u201d<\/p>\n Moscow is filled with entrepreneurs who get rich by cozying up to the government; Klyushin seemed to reach another, higher level. He and M13 allegedly became so close to Moscow\u2019s power brokers that an independent media outlet suggested he was one of the people behind an anonymous, inside-the-Kremlin<\/a> Telegram channel with nearly 200,000 followers. Klyushin denied the allegation and successfully sued the outlet over the insinuation.<\/p>\n Klyushin\u2019s most consequential professional connection was with Ivan Ermakov, an internationally infamous hacker. It\u2019s unclear when the two men met, but by April 2018 they were friendly enough to go heli-skiing together. Ermakov, a then 32-year-old with large, youthful brown eyes that made him look a decade younger, had recently served in Unit 26165 of Russia\u2019s main intelligence directorate, the GRU. In cybersecurity and political circles, the unit was known as \u201cFancy Bear.\u201d It was notorious for hacking into the networks<\/a> of Hillary Clinton\u2019s presidential campaign and the Democratic National Committee, acts<\/a> that helped throw the 2016 US election to Trump. Ermakov conducted some of Fancy Bear\u2019s break-ins personally, American prosecutors alleged in 2018. This was around when Ermakov and Klyushin were attending the World Cup together in Sochi. Ermakov was indicted again that October for a series of Fancy Bear hacks around the 2016 summer Olympics. Ermakov made it onto an FBI most-wanted list. Klyushin kept a copy of the FBI poster in his iCloud account.<\/p>\n At the time, Ermakov was obtaining information that would be central to Klyushin\u2019s next big business venture: making money in the American stock market. According to encrypted chats later obtained by prosecutors, Klyushin would soon open a brokerage account through a Danish company, which Ermakov and an M13 employee appear to have used to make trades in a broad range of stocks\u2014real-estate firms, natural gas concerns, food service businesses. At first, the endeavor didn\u2019t go well. The chats show transactions being mistimed, information about companies miscommunicated, and price movements misunderstood. \u201cThe market behaves strangely,\u201d says Ermakov. \u201cWe suck,\u201d complains one M13 employee. The trades that did succeed, though, tended to have a common theme: They happened right before the companies released their regularly scheduled public earnings reports. It was as if Klyushin\u2019s contacts had access to privileged information.<\/p>\n Which, prosecutors say, they did.<\/p>\n There are, broadly<\/span> speaking, a few types of insider trading. Some prosecutors have come to call the more prevalent kind \u201cgolfer cases,\u201d along the lines of an executive at a public company passing confidential information on the links to a buddy, who then plays the market. It\u2019s illegal but often relatively constrained: one insider, one company. (Actual golf legend Phil Mickelson paid back more than $1 million in connection with one such case in 2016.)<\/p>\n A rarer, potentially more destructive kind of insider trading involves finding a choke point in the flow of financial information and obtaining confidential data about dozens, hundreds, even thousands of companies at once. That\u2019s what happened in the early 2010s, when a Ukrainian hacker broke into press release distributors like PR Newswire and exfiltrated before-it\u2019s-public information on dozens of different companies. That hack allegedly resulted in around $30 million in illegal profits. For reasons that aren\u2019t entirely clear, Klyushin kept a printout about the PR Newswire hacker in a pink, translucent folder. He\u2014or someone\u2014snapped a photo of the article next to a bottle of ros\u00e9.<\/p>\n Klyushin and Ermakov\u2019s insider trading scheme started, investigators believe, in early to mid 2018. (The details below were drawn from court records, trial transcripts, and evidence submitted during a later trial.) That\u2019s when some awfully strange behavior started occurring in the networks of Donnelley Financial Solutions\u2014a document management firm that prepares earnings reports for big, publicly traded companies. On May 9, the account of a longtime Donnelley employee, Julie Soma, started downloading a flurry of confidential financial reports that had been prepared for client companies. That was something she\u2019d \u201cnever\u201d do, Soma later testified. The browser and operating system information associated with her account\u2019s burst of activity also didn\u2019t match her normal behavior. Plus, all of this was happening late at night, way past the hours Soma typically worked from her home in Richland, Washington.<\/p>\n Several other accounts also displayed atypical behavior, and at least one Donnelley-linked laptop, in London, was found to have a suspicious tool on it. This program, which allowed the computer to be remote-controlled, tried to collect usernames and passwords inside Donnelley\u2019s networks, then cover its tracks by deleting the system logs. Finally, the tool attempted to connect the laptop to a bogus site, \u201cinvestmentcomp.com\u201d\u2014a classic hacker trick to covertly collect data from a victim\u2019s system.<\/p>\n In November, a Donnelley competitor was hit too. At Toppan Merrill, investigators later discovered that a program called DirBuster was making multiple guesses per second to identify file names and network paths. Other malicious software echoed what was happening on the Donnelley machines.<\/p>\n Klyushin\u2019s investments, meanwhile, were expanding. He bought stock in semiconductor manufacturers, roofing suppliers, a firm that makes boats for wakeboarding. At almost every turn, Mikhail Irzak and Igor Sladkov, two associates of Ermakov\u2019s from St. Petersburg, bought those same stocks. (Irzak, Sladkov, and Ermakov were all also indicted.) The volume of their trades often dwarfed Klyushin\u2019s. When he purchased 1,350 shares of Tesla just ahead of its earnings report that fall, the St. Petersburg duo bought 16,300. Klyushin netted an estimated $9,000 from the deal; they got more than $145,000. Prosecutors never established a direct link between Klyushin and Ermakov\u2019s friends from St. Petersburg. But one of those buddies had an internal M13 messaging app in his iCloud account, even though he was never an employee or client of the firm. An economist for the US Securities and Exchange Commission later put the odds of the group\u2019s trading patterns being a coincidence at less than one in a trillion.<\/p>\n The scheme attracted more investors. Ermakov and Klyushin shared their tips with the new clients and took a 60 percent cut of anything those outside investors made. One newcomer ran an audiovisual and IT company; M13 had recently pitched it on a whitehat hacker-for-hire package. Two other investors were described by Klyushin\u2019s attorneys as old friends of his: former mining executive Aleksandr Borodaev and Boris Varshavskiy, who received the \u201cGold Badge of Distinction of Russian Coal\u201d and briefly served as the minister of ecology and natural resources for a region in southern Siberia. \u201cI did the math for Boris,\u201d Klyushin texted Ermakov in May 2019. \u201cThe profit comes to 198% \u2026 Boris earned $989k on $500k \u2026 They don\u2019t even ask why.\u201d (Neither Borodaev nor Varshavskiy was charged in the US. It was not established at trial that either of them knew about the insider trading scheme.)<\/p>\n Ermakov responded with a thumbs-up and three laugh-cry emojis. The pair grew closer\u2014hitting the sauna, going out to dinners with the M13 crew. They texted about their favorite TV shows. Klyushin was really into Billions<\/em>, about a hedge fund manager who made it big off of insider trading.<\/p>\n On July 16, 2019, the Julie Soma account at Donnelley Financial downloaded an upcoming press release from the sneaker company Skechers. The document\u2014one of more than 2,000 files illicitly downloaded using Soma\u2019s credentials\u2014showed that business was booming in the second quarter, well above what the market was expecting. \u201cWe buy SKX today,\u201d wrote Ermakov on the morning of July 18 in the encrypted chat, referring to Skechers\u2019 symbol on the New York Stock Exchange. The St. Petersburg pair snatched up 130,000 shares; Klyushin, almost 50,000; his mining buddies, 77,500. The earnings officially dropped at 4:05 pm ET that day. SKX shot up from $34 to $39. Klyushin\u2019s crew liquidated almost all of their positions immediately.<\/p>\n Klyushin was pumped. \u201cSo \u2026 What did we earn today? Our comrades are wondering,\u201d he wrote in the encrypted group chat, and he posted photos of Borodaev and Varshavskiy. Ermakov, who months earlier was fine texting about the outside investors, was growing wary. He told Klyushin to knock it off. \u201cVlad, you are exposing our organization. This is bad,\u201d he wrote. \u201cThat\u2019s how they get you and you end up as a defendant in a court room.\u201d<\/p>\n A month later,<\/span> former US Marine Trevor Reed was taken to jail in Moscow and sent to a state psychiatric facility. \u201cThere\u2019s blood all over the walls where prisoners had killed themselves or killed other prisoners,\u201d he later told CNN. \u201cThe toilet is just a hole in the floor and there\u2019s, you know, crap everywhere, all over the floor, on the walls. There\u2019s people in there that walk around, they look like zombies.\u201d<\/p>\n A similarly nightmarish story had recently unfolded for Paul Whelan, another former US Marine. He had gone to Russia for the wedding of a buddy when FSB agents burst into his hotel room and accused him of espionage. He was sent to a gulag that housed World War II prisoners and was given a job sewing buttons on winter uniforms. Cold showers were allowed, once a week. Meals consisted of \u201cbread, tea, and a watery fish soup that seemed better suited as cat food,\u201d according to The New York Times.<\/p>\n Reed and Whelan were two of four US citizens arrested by Russian authorities during Trump\u2019s first term, all on what appeared to be the flimsiest of pretenses. The Kremlin made it clear to the White House that some or all of the Americans would be let go\u2014if the US government gave up some notorious Russian criminals in return. Moscow and Washington had been exchanging captured spies for six decades, off and on. This was something different. This had all the hallmarks of a ransom operation.<\/p>\n The SEC, meanwhile,<\/span> was picking up hints that a group of Russians was engaged in awfully strange stock sales\u2014transactions that sure looked like insider trading. It wasn\u2019t long before the FBI was looped in. Special agent B. J. Kang took the case. Best known for spearheading the probe that inspired Klyushin\u2019s beloved show, Billions<\/em>, Kang was already working on another insider trading investigation with two prosecutors at the US Attorney\u2019s office in Massachusetts. Since this seemed like a similar-ish case, he brought them in. Seth Kosto had spent years trying insider trading and bank fraud cases. Stephen Frank, a former Wall Street Journal reporter, led the investigation into the \u201cVarsity Blues\u201d college admissions scandal. Together, the three dug in. Seeing the patterns\u2014multiple trading accounts making parallel moves, the focus on quarterly earnings\u2014the group quickly realized they were observing large-scale fraud. \u201cAnd it was across industries and different kinds of companies,\u201d Frank tells me. \u201cThe immediate thought we had was, \u2018This is likely to be some sort of a hack.\u2019\u201d<\/p>\n After further analysis of the market patterns, it became clear that the illicitly traded companies had something else in common: Their financial filings were all published by either Donnelley or Toppan Merrill. When investigators approached the two companies, executives didn\u2019t believe they\u2019d been hit. The companies launched internal investigations in which their own employees were scrutinized.<\/p>\n The feds, meanwhile, conducted a series of \u201cpen registers\u201d\u2014which reveal the connections between accounts, but not their contents\u2014to try to figure out who in Russia was orchestrating the trades. They zeroed in on the duo from St. Petersburg. Mikhail Irzak claimed to be a marketer. According to public records, Igor Sladkov was a rather prolific entrepreneur, with his hand in restaurants, residential real estate, nonalcoholic beverages, and media buying. The investigators got a warrant to access Sladkov\u2019s iCloud. Inside the account, they found a screenshot of a Snap Inc. announcement about upcoming company earnings\u2014time-stamped from before it was released. It was textbook inside information. \u201cSo: smoking gun,\u201d Frank says. \u201cHe was cooked.\u201d<\/p>\n When the feds examined Sladkov\u2019s WhatsApp account, they saw that he had been communicating constantly with a figure well known to US law enforcement: the twice-indicted former intelligence officer Ivan Ermakov. \u201cYou come across someone who is alleged to have an immense hacking pedigree,\u201d says Kosto. \u201cAll of a sudden, you have a path to explaining: How has this happened?\u201d<\/p>\n At 7:54 am Eastern time on November 6, 2019, the Julie Soma account at Donnelley downloaded a copy of Roku\u2019s third-quarter financial results. The company was going to notably miss its targets. Everyone in M13\u2019s orbit started shorting their Roku shares or trading other financial instruments based on Roku\u2019s stock. As soon as the earnings came out, Roku\u2019s price dropped from about $140 per share to less than $120. Klyushin and his investors cleared nearly $9 million in profits.<\/p>\n Klyushin, though, was getting exhausted. \u201cI am fucking tired rushing all the time. Need a rest,\u201d he texted Ermakov. He consoled himself in Ermakov\u2019s company\u2014and a little retail therapy. Klyushin went apartment shopping with Ermakov, and bought himself a 78-foot, $4 million yacht from a shipyard in Cyprus. \u201cAt this point I want nothing except the boat,\u201d Klyushin texted Ermakov in February 2020. \u201cMy pleasure is the boat and trading.\u201d<\/p>\n \u201cThen you need nothing. Enjoy your life,\u201d Ermakov responded. \u201cI\u2019ve read somewhere that if you keep buying while you have everything, it means you\u2019re unhappy.\u201d<\/p>\n Klyushin answered, \u201cHonestly I get a bigger kick when I check apartments for you, with you, the fact that we can walk home together and have a beer, or play golf, or simply send everyone to hell, knowing that you are close.\u201d<\/p>\n They didn\u2019t know it at the time, but they had only a few months left together to trade. By then, Toppan Merrill had introduced two-factor authentication to its system, effectively locking the hackers out. Donnelley had cut off access to Julie Soma\u2019s compromised account. Employees at Klyushin and Ermakov\u2019s brokerage firm were getting suspicious too. In an April Skype call with an executive at Denmark-based Saxo Bank, Klyushin and another M13 employee asked for more banking privileges. The Saxo executive politely pushed back\u2014and then asked why so many of Klyushin\u2019s best trades seemed to happen right around the release of earnings\u2019 reports.<\/p>\n The M13 employee offered that it was the company\u2019s media-monitoring prowess that gave them the edge. \u201cIt\u2019s, ahem, first mass media. Second social media. And, uh, third, it\u2019s, ahem, information investment sites,\u201d the employee said.<\/p>\n \u201cWe have an application,\u201d Klyushin added, more smoothly, \u201cwhich we are planning to launch onto the international market together with Swiss [investors], which in no way will be connected to the Russian Federation.\u201d That way, M13 will be \u201copen [to] investors from Europe and America.\u201d<\/p>\n If M13 really was developing a specialized program for traders, there\u2019s scant evidence of it. But the idea of recruiting Western investors to trade on ill-gotten tips\u2014that part was true. Klyushin and Ermakov were once photographed at a party with Anselm Schmucki, a Swiss citizen who ran the Russian office of DuLac Capital, a Zurich-based investment firm. \u201cThe goal was to offer this service to international clients\u2014you know, whoever Anselm worked with,\u201d Max Nemtsev, one of Klyushin\u2019s lawyers, tells me.<\/p>\n Schmucki declined to comment for this story. His former business partner, Domino Burki, insists their firm, DuLac, did nothing wrong. As for Schmucki himself\u2014well, Burki can\u2019t be so sure what went on in Moscow. \u201cI just feel that Anselm is not a criminal,\u201d he tells me. \u201cHe was a wheeler-dealer.\u201d (In 2023, the UK foreign secretary and the US Treasury Department sanctioned Schmucki, with the latter claiming he worked with \u201ca company with suspected links to Russian organized crime and money laundering.\u201d The Treasury Department added, \u201cSchmucki controls a global network of shell companies\u201d\u2014at least one of which was based in Edinburgh, Scotland\u2014\u201cand has had close financial relationships with an individual charged with financial crimes.\u201d)<\/p>\n Klyushin\u2019s photo with Schmucki was just one of the hundreds of thousands of files that US prosecutors sifted through as investigators obtained warrants for the iCloud accounts of Ermakov, Klyushin, and the rest of the M13 operation. Other images grabbed their attention too: the screenshot of Ermakov trading with Klyushin\u2019s account; the earnings reports, downloaded days before they became public; the small fleet of Porsche convertibles, like the one he drove in his wedding video; the encrypted chats that were backed up to Klyushin\u2019s iCloud. This was enough evidence for an open-and-shut case, from Ermakov\u2019s warning about ending up in a \u201ccourt room,\u201d which proved criminal intent, to the specific dates, times, and prices of the trades made with stolen information. One other photo stood out: a Russian Medal of Honor, given to Klyushin on June 14, 2020, and signed by one \u201cV. Putin.\u201d<\/p>\n The day after Klyushin got his medal, Paul Whelan, the former US Marine, found himself standing in a glass cage in a Moscow City Court, dressed in a blue-gray sweater. He held up a sign: \u201cSham trial! Meatball surgery!\u201d referring to the manufactured espionage charges against him and the emergency hernia operation he had undergone weeks earlier. He implored then president Trump to save him. Two men in ski masks, plaid shirts, and holstered pistols stood by his side while the judge handed down his sentence: 16 years in a gulag turned labor camp.<\/p>\n A month and a half later, Trevor Reed received his nine-year sentence and was also sent to a horrific facility. He refused to work. They locked him in solitary confinement and eventually took away his books. He went on hunger strike. After that, he told CNN, \u201cI started to get sick. I really at that point was consistently sick until I left. I started to cough up blood, and I coughed up that blood for a period of about three and a half months every day, multiple times a day.\u201d<\/p>\n By the end<\/span> of the summer, the M13 crew had stopped trading off of the Donnelley and Toppan Merrill data, and prosecutors had no way of getting to them while they were in Russia. The hope was that one of them would decide to travel to a place where the government was relatively friendly to the US. Whoever left first\u2014Sladkov, Irzak, Ermakov, Klyushin, you name it\u2014that\u2019s who was getting cuffed; everyone else would become a coconspirator in an insider trading case of stunning scale. \u201cThere was no plan B,\u201d Frank tells me.<\/p>\n Ermakov, already under two US federal indictments, had the good sense to stay in Russia. Klyushin, on the other hand, really wanted to experience the thrill of heli-skiing again. And this time, he had to do it in the Alps. This time, he\u2019d take his wife. They\u2019d celebrate their anniversary.<\/p>\n In the US, prosecutors began preparing their criminal complaint against Klyushin. The FBI reached out to Swiss authorities. On Sunday, March 21, 2021, Klyushin and his wife took off from Moscow in a private jet. \u201cYou\u2019re literally holding your breath,\u201d Frank told CNBC. The Klyushins landed about four hours later at Sion airport, in Switzerland. \u201cHe was actually in ski gear, getting off the plane ready to board a helicopter,\u201d Frank said. \u201cThe Swiss agents were waiting for him. They swooped in.\u201d<\/p>\n This is the point in the story when things get a little murky, a little strange. Klyushin was taken to a jail in Sion in handcuffs and leg irons, according to the local press. He was kept in solitary confinement and held without bail. But \u201che was not afraid or anything. He was in quite a relaxed mood,\u201d says Oliver Ciric, the Swiss lawyer who quickly signed on to Klyushin\u2019s case. Ciric\u2014a multilingual expert on Russian responses to Western sanctions, and, improbably, an honorary consul of the Republic of Vanuatu\u2014told the press that his client was arrested only after he refused advances by British and American intelligence operatives, first in a bar in the south of France and later in Edinburgh, Scotland. The implication was that these alleged spies were trying to pump Klyushin for information about his Kremlin contacts\u2014or recruit him as an agent. It wasn\u2019t a crazy claim, given Klyushin\u2019s proximity to the Putin administration. But Ciric had no evidence to back it up.<\/p>\n On April 7, the Kremlin asked the Swiss to extradite Klyushin back to Moscow. The man was a wanted criminal, the Russians claimed, accused of wide-scale financial fraud. That was odd, given how much the Kremlin was paying Klyushin\u2019s company. Stranger still was Klyushin\u2019s willingness to go along with the extradition request, since he\u2019d presumably have to face the infamously brutal Russian justice system. The American government asked for Klyushin to be sent to the US 12 days later. That request was granted in late June. Everyone involved agreed that the process was unusually quick\u2014high-profile extradition cases can drag on for years. \u201cIt\u2019s completely out of the standard procedures,\u201d Ciric says. \u201cThis is something that we attribute to the pressures, political pressures.\u201d<\/p>\n In June of that year, at a lakeside villa near Geneva, Putin and US president Joe Biden discussed a potential prisoner swap. It was a topic long under discussion, through a number of channels\u2014formal exchanges by diplomats, less formal discussions by a shifting network of outside lawyers and advocates. No agreements were reached that day. But the two countries opened up a new channel, this one between the CIA and its Kremlin counterparts.<\/p>\n After a series of appeals, Klyushin was sent to the US in December and held at Plymouth County jail. A trial date was set for about a year later. For a case of this complexity, that, too, was awfully quick. In part, that\u2019s because of an agreement between the Justice Department, Klyushin\u2019s defense lawyers, and the presiding judge, Patti Saris.<\/p>\n Each side, for their own reasons, wanted to downplay Klyushin\u2019s contacts in Russian government and society. Saris, for her part, was worried that too much talk about these connections could be prejudicial to the jury. The prosecutors, according to Frank, wanted to \u201cfocus on the actual facts of the insider trading.\u201d Klyushin\u2019s American lawyers, meanwhile, did a 180 on the earlier defense of him, never mentioning the supposed approaches by Western intelligence or why those spy agencies might be interested in their client.<\/p>\n So the trial never detailed who Klyushin\u2019s investors were\u2014folks like Aleksandr Borodaev and Boris Varshavskiy, the guy who won the Russian gold medal for mining. Nor did the trial lay out how many Russians benefited from the scheme. It neglected to mention that when Klyushin shared photographs with Ermakov in August 2019 of a safe filled with $3 million in $100 bills, that safe was located inside the Russian Ministry of Defense.<\/p>\n The trial was over in 16 days. Klyushin was found guilty on all charges. Not that he seemed to care.<\/p>\n In 2022, the<\/span> American and Russian governments swapped two sets of prisoners. They traded Konstantin Yaro-shenko, a Russian drug smuggler, for Trevor Reed, and they swapped Viktor Bout, the weapons trader known as the \u201cMerchant of Death,\u201d for the American basketball player Brittney Griner.<\/p>\n Bout was a real-life supervillain, fueling conflicts from Afghanistan to Angola. Yaroshenko had agreed to smuggle 8,800 pounds of cocaine. Griner, on the other hand, had been held for the better part of a year for possession of less than a gram of hash oil. Reed was falsely accused of hitting a Russian cop one time. Of course, everyone was happy to see wrongly detained American civilians let go. But what message did it send to Putin, that he could trade Bout\u2019s freedom for Griner\u2019s? Yaroshenko\u2019s for Reed\u2019s? Doug London, a 34-year veteran of the CIA, says that while the trade was politically popular, it may not have been in the US\u2019s long-term interest. \u201cRussia was emboldened by this,\u201d he tells me. \u201cThey\u2019re just going to take more hostages, and they\u2019re just going to arrest more people.\u201d<\/p>\n Klyushin was convicted on Valentine\u2019s Day, 2023. About six weeks later, on March 29, Russian authorities effectively kidnapped Evan Gershkovich, the Wall Street Journal reporter, and accused him of being a spy. A worldwide outcry ensued. So did talks to make a trade that could bring him home.<\/p>\n Depending on whom you believe, Klyushin was frequently discussed as the negotiators met along their various tracks\u2014or he wasn\u2019t mentioned at all. The Russian oligarch Roman Abramovich was deeply involved, or had nothing whatsoever to do with any talks. The State Department was stitching an international coalition to free the next set of Western prisoners, or was spinning its wheels on the margins. The CIA was leading the talks on the American side, or, as one of 10 sources put it, merely \u201cdelivering the mail\u201d for the Biden White House, which was calling all the shots. Making matters even more complex: Many of the 24 people who were eventually freed in August\u2019s massive prisoner exchange had their own advocates, all trying to negotiate with governments and with one another. One American prisoner even had two sets of representatives, each of which shit-talked the other to me.<\/p>\n The CIA and the White House declined to comment on the record for this story. The State Department\u2014whose top official for hostage affairs is so far from camera-shy that he once starred on a reality show\u2014declined, as well. But after speaking to my sources and reading through the various official leaks, a few common threads emerged. Putin\u2019s top priority, by far, was to get back another one of his killers: a hit man named Vadim Krasikov, who was serving a life sentence for carrying out an assassination in Berlin. (According to Gershkovich, Putin\u2019s Department for Counterintelligence Operations deliberately \u201cused\u201d him and Whelan as trade bait to secure the release of Krasikov.) The Germans were open to it, if some high-profile Russian dissidents were freed. The Russians would agree to that if more of their operatives were released, like that deep-undercover couple in Slovenia\u2014and Klyushin.<\/p>\n It\u2019s not hard to see why; Klyushin was a key contractor for Putin\u2019s propaganda chief, so valued he got a medal from the Russian president himself. Additional hints of Klyushin\u2019s value emerged in the months following his conviction, if you knew where to look. Klyushin\u2019s friends Borodaev and Varshavskiy, the mining types, were put on the US sanctions list as part of the effort to \u201ccurtail Russia\u2019s ability to exploit the international financial system.\u201d Then there\u2019s the broad array of unnamed Russian nationals who benefited from the M13 operation, and the mysterious Russian government official whose safe Klyushin filled up with $100 bills. Take a half-step back, and it\u2019s plain that M13\u2019s hack-and-trade effort was part of an attempt to fund Moscow\u2019s economy through the back door, despite every US effort to shut it.<\/p>\n On July 31, 2024, an official Kremlin news service reported that Klyushin had suddenly gone missing from a US prison database, along with three other Russian nationals. Two of the Russians\u2014a hacker and an electronics smuggler\u2014were soon back behind bars. Klyushin and two others were loaded on a plane by men in baseball hats and balaclavas and were flown first to Ankara, then to Moscow. Meanwhile, Whelan, Gershkovich, and the other prisoners held in Russia were met in a tearful, triumphant scene at Joint Base Andrews in Maryland by family, colleagues, Biden, and Vice President Kamala Harris. \u201cI had on clothes that I had worn in 2018 when I\u2019d been arrested. You know, they hadn\u2019t been washed. They were too big for me,\u201d Whelan told CBS.<\/p>\n \u201cI waved at people that were waving at me, and then I gave the president a salute as the commander in chief.\u201d Whelan continued. \u201cI thanked him for getting us home.\u201d<\/p>\n Watching from afar, Frank admitted to feeling just the tiniest bit conflicted amid the rapture of seeing Whelan and Gershkovich, the best-known of the freed American prisoners, back on US soil. \u201cI was a reporter, and to have a fellow reporter held hostage like that, it\u2019s pretty horrendous. And so I think we were thrilled to have a role in creating the opportunity for him to come home. On the flip side of that, it\u2019s a guy who\u2019s actually a criminal\u201d\u2014Klyushin\u2014\u201cgoing free to get people out who are completely innocent. I think we were gratified that he spent three years in jail at least before he went back,\u201d says Frank, who recently joined a business litigation firm. \u201cBut yeah, there\u2019s obviously a little bit of a mix of emotion.\u201d<\/p>\n In the images of his arrival at Vnukovo Airport, in Moscow, the man Frank chased for the better part of three years looks exhausted, with deep circles under his eyes and his brown hair largely turned to gray. His 5 o\u2019clock shadow is now well past 7:30. Wearing an open-collared khaki shirt and matching pants, Vladislav Klyushin descends the stairs stiffly. He waits for the undercover couple and their kids to receive flower bouquets. Then Klyushin shakes the hand of Vladimir Putin, who gives him a one-armed embrace.<\/p>\n Let us know what you think about this article. Submit a letter to the editor at<\/em> mail@wired.com<\/a>.<\/em><\/p>\n