The Hollow Nickel Case

Podcast Transcript

In 1953, a newspaper delivery boy in Brooklyn, New York, made an odd discovery. One of his customers gave him a nickel that seemed lighter than the others.

When he dropped it, it popped open, exposing a small piece of microfilm.

It was the bizarre beginning of the exposure and discovery of a spy ring in the United States that ultimately contributed to one of the most notable events in the entire Cold War.

Learn more about the Hollow Nickel Case and how a random discovery led to the uncovering of a spy ring on this episode of Everything Everywhere Daily.

The event, which became known as the Hollow Nickel Case, began in an unusual manner.

The story starts on June 22, 1953, when fourteen-year-old Jimmy Bozart was collecting subscription money for the Brooklyn Eagle newspaper at an apartment building at 3403 Foster Avenue in Brooklyn.

One customer paid him with a United States five-cent piece that felt too light. As Bozart fiddled with it, he dropped the coin on the floor. The nickel split apart, and inside he found a tiny piece of microfilm bearing columns of five-digit numbers.

Not knowing what to do, he mentioned the odd coin to a schoolmate whose father was a New York City police officer. That officer passed the information to a detective, who in turn told an FBI agent. Within days, the strange nickel and its microfilm were in the FBI Laboratory in Washington.

The coin itself was a clever concealment device. The heads side was a normal 1948 Jefferson nickel, while the tails side had been taken from an earlier wartime nickel struck in a silver-rich alloy. The two halves had been machined so they could be snapped together, turning the coin into a hollow container.

Inside, the microfilm carried 207 groups of five digits, arranged in rows and columns, with no obvious key or text and no indication of who had sent it or to whom it was addressed.

It was clearly a cipher of some sort, but the FBI had no context, no matching codebook, and no link to any known suspects. The Bureau opened a formal investigation, but at first, all they had was what they called the Hollow Nickel Case, a mystery hollow coin, a cipher text, and no leads.

The microfilm’s numerical message was almost certainly written in an unbreakable code system known as a one-time pad.

This encryption method, when used correctly, is theoretically unbreakable because each message uses a unique random key that is never reused. Without the corresponding key sheet, the message is impossible to decrypt.

In this case, the content of the message was secondary to the fact that a secret message was being transmitted using rather sophisticated techniques, which were typically reserved for espionage.

For nearly four years, the Hollow Nickel Case went unsolved. Agents tried to trace the origin of the coin by interviewing tenants in the building, following financial trails, and even analyzing the dies and minting characteristics to see if that might suggest an origin, all without success.

Cryptographers struggled with the five-digit group numbers, but without any known codebook, the cipher resisted their efforts. The nickel itself was publicized in internal FBI circles as a curiosity, yet there was no clear way to connect it to a larger espionage operation.

During this same period, unknown to the FBI, the man for whom the message was intended, an ethnically Finnish KGB officer named Reino Häyhänen, was living and working in the United States under the alias Eugene Nicolai Mäki as part of a Soviet illegal residency network.

The breakthrough came from abroad rather than from the coin. In May 1957, Häyhänen, facing a recall to Moscow and fearing punishment for poor performance and heavy drinking, traveled to Paris and went to the United States embassy.

There, he announced that he was an officer of Soviet intelligence who had operated in America for several years and that he wished to defect. His debriefing provided a cascade of information about KGB operations in North America, including the existence of concealment devices such as hollow coins and other trick containers used in dead drops.

At one point, he produced a hollow Finnish 50 mark coin that had been prepared in the same way as the mysterious nickel, even marked with a tiny identifying puncture. That detail allowed FBI investigators to connect his story to the unsolved case of the Hollow Nickel from Brooklyn.

Once the FBI realized that Häyhänen was the intended recipient of the hollow nickel message, he was able to supply crucial cryptographic information. He explained that Soviet intelligence used a sophisticated system now known as the VIC cipher, based on one-time pads and elaborate bookkeeping techniques.

With his help and that of FBI cryptanalysts, the microfilm text was finally read. Some modern sources note that the decrypted message, written in Russian, was not a trove of secrets but a rather mundane set of instructions from Moscow.

It welcomed Häyhänen to the United States, confirmed the receipt of earlier communications, authorized the provision of $3,000 in local currency for cover arrangements, and provided procedural guidance on how he was to send encrypted reports.

Yet even a routine administrative message was invaluable, because it confirmed the cipher system, tied the message to a specific agent, and validated Häyhänen as a genuine defector rather than a plant.

Häyhänen also described his colleagues and superiors. He identified a Soviet operative, Mikhail Svirin, who had been attached to the United Nations, as one of his contacts. However, Svirin had already returned to the Soviet Union and was thus beyond the reach of American authorities.

More importantly, he described another key figure in the network, a middle-aged man working undercover in New York who went by the name Emil R. Goldfus but was in fact a Soviet officer codenamed Mark. That man was William August Fisher, better known under the name he later gave authorities, Rudolf Ivanovich Abel.

Häyhänen also provided information on other Soviet operations and collaborators, such as Canadian and American targets, including US Army Master Sergeant Roy Rhodes, who was eventually court martialed and convicted of conspiracy to commit espionage.

With Häyhänen as their guide, the FBI began intensive surveillance of Fisher in New York. Fisher lived a seemingly modest life, working as an artist and operating a photography studio.

In June 1957, Fisher was arrested in a New York hotel after an FBI tail determined that he might be preparing to flee. When questioned, he then provided the name Rudolf Ivanovich Abel, which was the name under which he was charged and which stuck in the public’s memory, although Abel had in fact been a deceased Soviet colleague.

FBI searches after his arrest found a treasure trove of classic espionage equipment, including cameras and devices for producing microdots, shortwave radios, cipher pads, hollowed-out objects such as a shaving brush and cufflinks used as concealment containers, and other spycraft tools that matched Häyhänen’s descriptions.

These finds, combined with the decoded hollow nickel message and the defector’s testimony, gave the Bureau a solid espionage case.

The United States government decided not to charge him with formal treason, since he was not an American citizen, but instead indicted him on counts of conspiracy to transmit defense information to the Soviet Union, conspiracy to obtain such information, and acting as an unregistered agent of a foreign power.

His trial in federal court in Brooklyn in the autumn of 1957 drew intense media attention as one of the first major spy cases of the Cold War on American soil.

At the trial, Häyhänen gave key testimony for the prosecution, though the defense attempted to undermine his credibility by depicting him as a chronic liar, drunk, bigamist, and thief.

All of which were technically true, but it also didn’t mean he was wrong and didn’t have corroborating evidence to back up his story.

Cryptanalysts who had worked on the hollow nickel message were not permitted to testify in detail for security reasons. Still, the prosecution was able to show the connection between the microfilm, the cipher, the concealment devices found in Abel’s possession, and the broader network described by the defector.

On October 25, 1957, the jury found Abel guilty on all counts. Judge Mortimer Byers sentenced him to a thirty-year prison term plus additional concurrent terms and fines.

The relatively restrained sentence reflected, in part, a belief that Abel might one day be helpful in a prisoner exchange, a point argued by his lawyer James Donovan.

The Hollow Nickel Case did not end with Abel’s conviction.

The information that emerged helped the FBI and other agencies map aspects of Soviet spyecraft, including the use of hollow coins, microfilm, dead drops, and advanced cipher systems, and it led to the disruption of related espionage activities.

The case also exposed vulnerabilities around American installations abroad, such as the U.S. embassy in Moscow, where Roy Rhodes had been compromised.

For four more years, Abel remained in U.S. custody at the federal prison in Atlanta, while Cold War tensions continued to rise through events such as the launch of Sputnik and the formation of new military alliances.

The final dramatic chapter in the Hollow Nickel story came in 1962.

In May 1960, American U2 pilot Francis Gary Powers had been shot down over the Soviet Union and convicted of espionage. Negotiations eventually produced a prisoner swap.

On February 10, 1962, at the Glienicke Bridge in Berlin, Abel was exchanged for Powers in a carefully choreographed handoff that became one of the iconic images of Cold War diplomacy and espionage.

The public story of that exchange, and Donovan’s role in it, later inspired the 2015 film “Bridge of Spies,” starring Tom Hanks and Mark Rylance, which dramatized both the Abel trial and the later swap, with the Hollow Nickel Case referenced as the original path by which the FBI discovered its man.

Reino Häyhänen struggled with alcoholism and personal instability and died in a car wreck in 1961 in Pennsylvania, which was widely believed to be accidental, but you never know.

Rudolf Able returned to the Soviet Union, was quietly honored by the KGB, and lived as an artist and lecturer before dying in Moscow in 1971.

Abel’s defense attorney, James Donovan, later conducted additional Cold War negotiations, including helping secure the release of prisoners in Cuba after the Bay of Pigs, and died in 1970.

As for Jimmy Bozart, the kid who started everything, an anonymous donor gave Jimmy an Oldsmobile 98 automobile. Jimmy sold the car one year later and reportedly used the proceeds to invest in stocks, notably in the Texas Gulf Sulphur Company, which marked the beginning of his successful entrepreneurial career.

In 1957, he was one of 69 witnesses who were called to testify in the trial of Rudolf Able.

As far as I can tell, he is still alive as of the time of this recording.

The Hollow Nickel Case had several profound implications for the Cold War.

It strengthened U.S. anti-espionage efforts by giving investigators their first clear, tangible window into the spycraft of deep-cover Soviet “illegal” agents. The discovery of the hollow coin exposed how the KGB used microfilm, coded dead drops, disguise techniques, and the highly advanced VIC cipher.

This allowed the FBI to refine its training, update its manuals, and recognize similar concealment devices in future cases. It also revealed weaknesses in U.S. security practices, particularly how American personnel abroad, such as embassy staff, could be compromised, leading to tighter counterintelligence screening and oversight.

By successfully identifying and dismantling one of Moscow’s most sophisticated networks, the case boosted the FBI’s confidence, provided a blueprint for unraveling illegal-residency operations, and signaled to the Soviets that even their most secret operatives were vulnerable to detection.

All of this came about because of an accidental discovery by a fourteen-year-old paper boy who was collecting money from his route.

The Executive Producer of Everything Everywhere Daily is Charles Daniel. The Associate Producers are Austin Oetken and Cameron Kieffer.

Today’s review comes from listener Nathan Boundy over on the Facebook Group. They Write:

Hi guys, I now have the honor of being a completionist club member! Chapter of Queensland, Australia. I started listening with the Planet X episode and then just jumped around listening to episodes I was interested in.

A couple of months ago, I decided to start from the very beginning, and it’s been amazing. It’s great to view everything around me through a more educated and thought-filled lens. My top interest would have to be space. Cheers, Gary!

Thanks, Nathan! Always glad to see the Queensland chapter of the completionist club growing. One of my favorite states in Australia. I’ve literally driven from the southern border all the way up to Port Douglas and visited Fraser Island, the Whitsundays, several national parks, and of course, the Great Barrier Reef.

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