For more than 50 years, the US and Germany spied on foreign governments through a Swiss company called Crypto AG, a firm secretly controlled by the intelligence agencies.
The company sold encryption devices - machines supposedly built to send secure communications - but the devices could also spy on Crypto's clients. Their customers included Pakistan, India, Syria, Saudi Arabia, and even the Vatican.
Crypto AG isn’t the first - and certainly won’t be the last - firm run by spies, however. Here are a few of the companies set up by cheeky covert operators.
Brewster Jennings & Associates
The CIA set up the Boston-based Brewster Jennings & Associates in 1994 as a front for officers including Valerie Plame, ex-head of operations for the Iraq Joint Task Force. Plame, later outed as a spy in 2003, listed the company as her employer for tax purposes, although the Boston Globe described it as a telephone number and a PO Box. Dun & Bradstreet lists Brewster Jennings as a ‘legal services office’ with annual sales of $60,000 and one employee: CEO ’Victor Brewster.’ The US administration admitted it was a front. The CIA also used the company to investigate an alleged foreign intelligence ring, including Pakistan's ISI, which was attempting to recruit moles to obtain US nuclear secrets, The Sunday Times reported.
The FBI and Australian police were enjoying a few beverages in 2018 when they came up with a plan to catch criminals by creating Anom, an encrypted app company. The FBI reportedly offered a supergrass $100,000 and a reduced prison sentence to help build the tech, using a Trojan master key to decrypt and store data that passed through the app. Anom was used by more than 300 criminal syndicates including Italian organized crime, outlawed motorcycle gangs, and international drug traffickers. Some 800 suspects were arrested in 2021. “Some of the best ideas come over a couple of beers,” said Australia’s top cop Reece Kershaw.
Anom wasn’t the Bureau’s first corporate venture, of course. In the late ‘80s, Michael R. McGowan was an FBI case agent in Philadelphia working in a drug area known as ‘The Badlands’. Traffickers were building hidden compartments inside vehicles to hide drugs from sniffer dogs and the police, so the FBI hired a company to build the Bureau’s own ’load’ cars. They rented a warehouse to use as a showroom and got the word out using an informant. Pretty soon business was booming. The vehicles enabled the FBI to track trafficking routes used by drug gangs all along the Eastern Seaboard. “We probably turned down seven out of every 10 traffickers because we simply had too much business and we could pick and choose which group we wanted to investigate,” McGowan told SPYSCAPE’s True Spies.
Crypto may not have been the only Swiss company linked to US spies. Swiss broadcaster SRF alleged in 2020 that Omnisec AG, Crypto’s main competitor, had ties to the US National Security Agency (NSA) and may have also sold manipulated devices. Swiss cryptologist and professor Ueli Maurer told SPYSCAPE that the NSA approached him in 1989 when he was a young researcher. “I declared that I had no influence on Omnisec's products and that I would not support any kind of manipulations,” Maurer said, adding that he immediately contacted Omnisec’s CEO to warn him. “Afterwards, there was a meeting between NSA representatives, the Omnisec CEO, and me, at which the CEO categorically ruled out any cooperation and very clearly and definitively ended the contact.” Maurer added that he had no information or circumstantial evidence indicating the CEO had further contact with the NSA. Omnisec was liquidated in 2017. The NSA declined to comment.
The US isn’t the only entrepreneurial government. The US Treasury imposed sanctions in 2020 on Iranian cyber threat group APT39, 45 tech staff, and a company known as Rana. “Masked behind its front company, Rana Intelligence Computing Company, the government of Iran employed a years-long malware campaign that targeted Iranian dissidents, journalists, and international companies in the travel sector,” the Treasury said. “Rana advances Iranian national security objectives and the strategic goals of Iran’s Ministry of Intelligence and Security by conducting computer intrusions and malware campaigns against perceived adversaries, including foreign governments and other individuals.”
The FBI operates a fleet of low-flying aircraft equipped with video and cellphone surveillance technology. The Associated Press traced the aircraft back to at least 13 front companies in 2015, including KQM Aviation, NBR Aviation, FVX Research, and PXW Services. (The Bureau said the companies are used to protect the safety of the pilots.) The Drug Enforcement Administration also has its own planes, according to a 2011 Justice Department inspector general report citing the 92 aircraft. Meanwhile, Air America and Southern Air Transport - in the early years - were operated by the CIA, flying combat support missions in the Vietnam War.
Is Aeroflot also a nest of flying spies? Nikolay Alekseevich Glushkov, the former deputy director of Russia’s flagship carrier, described the airline as a “cash cow to support international spying operations”. He was arrested and jailed for three years - found guilty of channeling Aeroflot money through another company - and emigrated to the UK in 2010. His death in 2018 - strangled with a dog lead - is still being treated as a suspected murder. Meanwhile, Dmitry Fedotkin, head of Aeroflot operations in London, was arrested in 2020 after allegedly handing over state secrets to British intelligence. Fedotkin graduated from a Moscow university with an engineering degree as a specialist in transport radio equipment.
Did China kill Nortel, once Canada’s greatest telecom company? In 2000, Nortel had 90,000 staff and a market value of $250bn. By 2009, it was bankrupt. The Canadian Security Intelligence Service - Canada’s CIA equivalent - warned Nortel that Chinese hackers might be stealing data (an accusation China denies). A Nortel email address was forwarding intel to Shanghai Faxian Corp., seemingly a front company with no Nortel links. “It was like a vacuum cleaner approach,” Brian Shields, then a systems security adviser, told Bloomberg. Shields suspects the Chinese government but no one has proven that China or its intelligence agents were behind the hack. Huawei denied any involvement and, legally, poach Nortel’s biggest customers and hired Nortel researchers to take the lead in 5G networks.
Mossad’s Incoda ‘meat factory’
Like the CIA, Israel’s spy agency has been using front companies for decades. Incoda, which claimed to export Ethiopian beef, was a wholly-owned Mossad operation from 1955-1964, according to Yossi Harel, a former military intelligence officer who managed the Incoda factory in Eritrea. In Dangerous Liaison, he describes Incoda as an Israeli intelligence station in Africa. “We had a huge arms cache,” Harel said. “We were only a cover in Mossad deals. When they had to send someone to an Arab country, they did it through us… We transmitted mail to spies in Arab countries in our ships."
Mossad’s Red Sea diving resort was so ingenious Netflix turned it into a 2019 thriller starring Chris Evans as a spy who sets up a diving resort as a cover to evacuate Ethiopian-Jewish refugees to a safe haven in Israel. Gad Shimron, one of the real-life Mossad spies who helped evacuate thousands, told SPYSCAPE’s True Spies podcast that, under the cover of darkness, Mossad operatives would pretend they were off to party with Swedish, Red Cross nurses on Friday evenings. Really they were leaving the resort in a convoy of trucks to collect 200 refugees every week, smuggling them across checkpoints to an Israeli Navy vessel sailing under a foreign flag. “I think it was one of the only cases in the history of the Mossad where a cover company was actually making money,” Shimron recalled fondly.
In Ian Fleming’s Live and Let Die, James Bond poses as a businessman at Universal Export, an MI6 front company. It seems life may imitate art in the polished corners of London’s spy world. Hakluyt, an agency started by ex-MI6 agents, once hired a German intelligence operative to spy on environmental campaigners on behalf of Shell and BP. The Sunday Times reported in 2001 that Mike Reynolds, a Hakluyt director and MI6's former head of station in Germany, employed Manfred Schlickenrieder - code-named Camus - who’d previously gathered intel on radicals like the Red Army Faction. Schlickenrieder allegedly fronted a Munich-based film company, Gruppe 2. He was reportedly a one-man ‘videographer’ who’d spent more than 15 years shooting an unfinished documentary about Italy's Red Brigades.