Letter from a Málaga City Jail

The following letter (original PDF) was obtained on May 4, 2017 by IRmep via the Freedom of Information Act (release letter PDF) from a classified FBI and Department of Homeland Security dossier. The letter was presumably sourced from an INTERPOL intercept.

It is an appeal for assistance written by convicted felon Richard Kelly Smyth to movie producer and self-confessed Israeli spy Arnon Milchan. Smyth had fled the United States in 1985 after being arrested and charged with smuggling. The letter (and other dossier documents) add details to the 2014 report published at Antiwar.com suggesting Smyth and Arnon Milchan along with Benjamin Netanyahu were knowing participants in the well-documented conspiracy to illegally smuggle krytrons, which can be used as triggers for nuclear weapons, to the Israeli Ministry of Defense via front companies. The letter also confirms Benjamin Netanyahu, the current Prime Minister of Israel, worked as Arnon Milchan’s employee at Heli Trading, the Israeli node of the smuggling network.

Prime Minister Benjamin Netanyahu successfully lobbied Secretary of State John Kerry to grant in 2016 a 10-year resident visa for Arnon Milchan to remain in the United States. The US Department of State currently refuses to release information about their secret negotiations or the State Department’s awareness of Milchan’s espionage activities on behalf of Israel before it granted the visa. – Grant F. Smith, IRmep Director

Thursday, 20 Sep 2001


Ref: Internet page [CENSORED} 18/8/01


Our names have been linked again in the referenced web page. I was surprised how little you’ve changed since the last time I saw you in 1985. I still feel young and vibrant at 72 years since I run a mile every day. My hair is all white and thinning on top.

At present time, I am in prison in Málaga, Spain, awaiting extradition to the USA for exporting krytrons from the US to your company, Heli Trading, Ltd, using a Commerce License rather than a Munitions License. The reason I was arrested: I went to the Málaga Police Station for my non-resident certificate as required by my Málaga bank for my social Security (US pension) bank account. While waiting 2 hours for the certificate, an INTERPOL FAX came in about the old krytron case. I was arrested on the spot and sent immediately to jail. I’ve been in this Spanish prison for three months and 10 days along with murderers, armed bank robbers, drug dealers and drug addicts. It hasn’t been a very pleasant experience with violent outbreaks that could threaten my life at any time. I expect to be extradited to the US within 2 or 3 weeks from today.

I have been living in Málaga, Spain, under a nom d’plume [CENSORED] for 16 years, writing books and software for options trading on the Chicago and London Options Markets, making a good return on what little capital I have. I had to leave behind my multi-million-dollar real estate holdings when I fled the US to Málaga in August 1985. I had been indicted for smuggling krytrons to you at Heli Trading. The US authorities kept asking me to list all the things you had done wrong. I told them I didn’t believe either you or I had done anything wrong. I hadn’t “smuggled” krytrons, I had exported them to you using a perfectly legal Commerce License. The authorities believed it should have been a Munitions License.

I have retained an excellent lawyer named [censored] who is confident he can “plea bargain” my case and get me released with a fine and credit for time spent in prison in Spain.

I have two propositions to make to you which should avoid bringing the case to trial which would be “messy” and you would certainly be called as a witness with all the adverse publicity

My first proposition: pay the $35,000 of [CENSORED]’s fee since I only have less than $10,000 in my Málaga bank account. This would greatly aid me.

The second proposition which would make back the lawyer fee: Set up an account in your name (and non-US address) with Man Financial ltd in London with $100,000 in dollars and £50,000 stipulating that I would be authorized to trade in your behalf using my nom d’plum Jon Schiller, which the head broker, Mr. Duncan Dunn, knows quite well. Man Financial would put the dollars in NY (not traceable to you) and the pounds in London. I would trade OEX naked spreads or covered spreads with the NY funds and the same strategies using SEI (American style FTSE-100 options) in London. These trades are explained fully in my book "The 100% Return Options Trading Strategy," published by Windsor Books of Brightwaters, NY. Many copies have been sold all over the world.

Continuing with this second proposition: 75% of the trading profits would go to you, paid semiannually, and 25% of the trading profits would be paid to me, semiannually. The payment dates would be 1 Jan and 1 Jul each year. Man would send you monthly trading statements; they have a web page for you on the Internet if you or your accountant would like to check the trading results and funds in your account at any time — both the dollars and pounds. You could cancel the options trading at any time you wished.

I would expect that the $35,000 lawyer’s fee would be earned back in about 6 months or less.

Arnon, for old time’s sake, I would greatly appreciate your granting these two propositions.

I was delighted to hear your former employee, Netanyahu, had become Prime Minister of Israel. I heard from someone that [CENSORED] had left. I hope it was false information, since she was such as delightful and intelligent woman to work with.

[CENSORED] Enfermeria

Note: It is not clear from released documents whether any of the proposed financial transactions took place. Richard Kelly Smyth was extradited to the United States in 2001 and sentenced to 40 months in prison and a $40,000 fine. However, because of his advanced age, he was immediately paroled. Israel, despite requests, never returned most of the illegally exported krytrons to the United States. Israel claims the krytrons were not used in a nuclear program.