tonight on "nightline," the tunnel people. it's dark labyrinth hidden beneath the las vegas strip. tonight, lisa ling takes a remarkable tour of the sin city underworld and meets the people who call the tunnels home. sex, lies and russian videotape. an american diplomat supposedly caught on tape having sex by a russian spy agency that may be out to get him. the "nightline" investigation. plus, helicopter heist. a daring break in at a swedish

cash depot, complete with booby traps and why the return of the caper is "a sign of the times". captions paid for by abc, inc. good evening, i'm terry moran. las vegas, sin city. there's no place like it, casinos, show girls, bright lights, high rollers and glitzy night life. but vegas is struggling through the recession, just like every other american city. maybe worse there and beneath that famous strip of luxury hotels lies a bizarre and dark underworld. a community, literally off the grid, connected by miles of tunnels. and for the people you are about to meet, those tunnels have become home. as "nightline" contributor lisa ling now reports. >> las vegas. it's the kind of place where a

few things provoke surprise anymore. but beneath the flashing lights there's an even darker side of sin city. we're about to descend into a secret world a city beneath a city. >> this gives you a good idea of the tunnels and where they go and what's above them. i mean, these four tunnels here, about -- >> matthew o'brien has agreed to lead us through a la brint of tunnels here that stretch for miles. >> goes under new york, new york and goes two miles total to the hard rock and opens up at that point. >> so there's a whole world essentially existing beneath the las vegas strip. >> exactly. yeah. there's hundreds of people who live in these underworld flood channels. how you doing, man?

>> people like iron. a tunnel regular who matt met while researching his book "beneath the neon" about people living in the tunnels. >> can we get a quick tour? >> sure. >> iron is going to show us his home in the tunnels. >> ain't much. right there. it's just about basically a blanket and just pillows right now, because everything i had got washed away. >> so this is where you live? >> yeah. i have a little wall. i wasn't expecting company. >> the tunnel may provide the homeless an escape from vegas' scorching heat, but they were originally built to protect the city from flash floods. >> they are separate from the sewage system, as you can see, and it smells like a sewage, but it's for flood control. when it rains, these tunnels fill up quickly. it can be dangerous. >> so i would imagine that people's homes get washed away within minutes or seconds.

>> yeah. a lot of them are really good about communicating with each other when it's about to rain and grab their valuables and get out and leave everything else behind. it's also cooler so that's an attraction for the people to live. >> we followed matt deeper into the tunnels and found a dark underworld. >> i have been exploring the tunnels for more than seven years. you still have a bit of anxiety going into the tunnels because you never know what to expect. and you never know what is waiting in the dark. >> by the way, on the reason we can see right now is because of our flashlights and the light from the camera, because otherwise it's pitch black in here. by now we're about half a mile into a tunnel that runs just beneath cesar's palace, a major landmark on the strip. it's eerily quiet even though thousands of people are on the street above us. >> this is kind of a garbage area and a bathroom. you can see the stains on the wall and the tissue on the ground and stuff. so we'll go through here and go up the side tunnel and see if we

can see if anyone's around. >> wow, this is wild. it's not long before someone hears us. >> steve, oh, good. what's going on? >> what's up? >> about to come to find you. >> okay. steve, you're not using -- you're not using a flashlight. you can navigate pretty well in here? >> yeah. i have been down here for a while. so i can navigate without a light pretty much. >> steve can see in the dark almost. >> steve leads us to the home he shares with his fiance katherine. >> a little wet down here. >> yeah. >> man. >> this is amazing. hi. how are you? >> hi, how are you? >> i'm lisa, can we come in? >> they have worked to make it as homey as possible. >> a shower. >> pretty clever. >> yeah. >> works just fine. >> a little privacy, put the curtain up.

>> steve says drugs landed him here, but katherine threatened to leave him if he didn't quit. >> we fell in love. i mean, we want to get out of here. that's always our main goal. we don't want to live like this forever, we don't like living in the tunnel. we live here because we can and we're not bothered by anybody, the police or anything like that, they don't really know we're down here. a lot of out of sight, out of mind. >> can you turn off the light for a second because i want to show how dark it is in here. >> steve introduced us to some of their neighbors in the tunnel. they're a community. so this is your home, huh? >> this is my home. >> living next door is phil. when we met him he was reading "sports illustrated," catching up on the latest scores. >> i bet sports, and some of the money i made thinking i'd get rich and get out of on the situation, but everybody that comes to vegas is thinking the

same thing i'm thinking. >> is it weird you kind of live in this world underneath -- >> yeah, it was at first, but now once i see the -- i got to see the culture we created really, no, i don't think -- i don't think it's weird. i think we were pretty smart to survive the way we did. >> they survive by feeding off the casinos they live below. >> there's lots of money in the casinos. all you have to do is keep your eyes open. >> they sleep during the day and venture out at night to do what's called credit hustling. scouring the slot machines to look for credits that tourists unwittingly have left behind. >> i don't mind taking money from those who live a life of decadence. >> playing them can earn katherine and steve 50 bucks a day, sometimes more. just enough to live and maybe treat themselves to a movie once in a while. so steve, you have lived here for two years. katherine you have lived here for one. how long do you expect to live here? >> gosh, we'd like be out of

here tomorrow if we could. we don't plan, you know, a month ahead of time or whatever. it is pretty much we're living day to day. we get up, we have to, you know, survive. >> but above them, sin city shine on. it's millions of visitors walking on top of this hidden world. for "nightline" i'm lisa ling, under the vegas strip. >> dark subculture in sin city. when we come back, cold war dirty tricks, a diplomat was caught on tape having sex with a prostitute or was he? ñ/ñ/ñ/ñ/ñ/ñ/ñ/ñ/ñ/ñ/ñ/ñ/ñ/ñ/ñ/ñ/

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look for new duracell ultra advanced so here's a modern day tale of cold war espionage involving an american diplomat, videotaped

sex, and blackmail. u.s./russian relations have been rocky lately, but that's signs of improvement. barack obama and demetri medved met privately and medved applauded obama for scrapping the missile defense system. and as brian ross reports there are dark undercurrents in this relationship. >> terry, what you are about to see is a sex tape, supposedly made in a moscow hotel room with an american diplomat and a prostitute. the u.s. says it is a clever fabrication, including some authentic scenes and some that are staged. all produced by the russian spy agency that replaced the kgb now known as the fsb. the initials may have changed, but it seems for some the cold war is still alive and well. there are few americans in moscow who are more closely watched by the russian security service than this man.

kyle hatcher, the u.s. diplomat, assigned to work with religious and human rights groups. a valuable deputy to u.s. deputy, john beyrle. >> kyle works in the political section and he's responsible for outreach to the russian orthodox church to civil society, human rights organizations. and there may be some people here who don't like that job description. and would like to discredit him in the eyes of his contacts. >> and that became clear when last month, this undercover video of hatcher was posted on a russian internet site, complete with background music. first, hatcher is seen in surveillance video on a moscow street talking on a cell phone. audio is dubbed in with his voice, talking to a woman about getting together. >> not sure. >> the photos of topless women are added, suggesting he called

a prostitute. hatcher says this video was made several years ago when he visited moscow as a private citizen. next, hatcher seen in a moscow hotel room in his underwear with the lights on. then the lights are out in the room and a man and woman appear to be having sexual relations on the bed. he says the man there is not him, but the russians attempted to blackmail him with the taping telling him he'd make -- they'd make the an inpublic unless he became a double agent. he refused and it was posted on a website that's tied to the news conversation, once known as the kgb, now called the fsb. we showed the tape to former fbi counterintelligence agent dave major who runs the counterintelligence. >> this is fsb operations.

>> major started with the surveillance footage hatcher says was made years ago. long before he worked for the state department. >> they have that footage from years ago. >> that's the nature of the counterintelligence services. i tailed them in the united states, just in case. the kgb has never been limited by resources. >> major says the pictures in the hotel room areparticularly unconvincing. >> niece -- he's in the hotel room, it's him, it looks like to me he's looking at the vent. then click, all of a sudden it becomes really dark. looks like things shift and the woman is around. why don't they show the film of him going over and turning the light off and why don't they have her keep the light on if that's the purpose? >> after hatcher was approached with the video and the offer he reported the russians attempt to

his embassy. >> a diplomat whose job is to contact the dissidents, people causing problems he could be so effective doing that with his language and discussion. let's get rid of this problem, but he does the right thing. actually i think it makes the fsb look very heavy handed. >> american ambassador beyrle says they have filed a formal request over the fabrication and smear. >> some of the clips are clearly fabricated. we had our security office back in washington take a look at that. they're convinced that kyle has done nothing wrong. i have full confidence in him. and he's going to continue his work here at the embassy. >> and ambassador beyrle blames what he calls elements inside the russian government who cannot accept that the cold war is over. >> i think there are people here who don't want the u.s./russia relationship to get better.

that's unfortunate. i don't think those people are in the majority. and that's one of the reasons that i thought it was important to speak out. >> a spokes person for the

russian foreign ministry declined to comment about the tape to abc news.

but it is the second such incident involving a western diplomat and a sex tape in two months, linked to the russian security services. earlier this summer, a tape of a british diplomat, james hudson, and two prostitutes was posted on the website. there was no doubt about the diplomat, because the lights were left on. he resigned in disgrace and went home to listen lon -- londonnet

from oceans 11 to the thomas crown affair, hollywood audiences can't get enough of the hollywood heist, but it seems that today in sweden, life was immating art. for nick watt, it's "a sign of the times". >> the police, well, there wasn't a whole lot they could do about it. listen, that's the bank robber's

chopper overhead. shortly after 5:00 a.m., they jumped from the hijacked helicopter on to the roof of the vault. they smashed the skylight window, they're in. witnesses heard loud explosions. the chopper hovered for 15 minutes until the raiders wearing ski masks and brandishing automatic weapons emerged carrying bags of cash. they disappeared. >> it seems very military. it seems like this is done almost like a military operation. >> spikes were spread on surrounding streets to disable cop cars. a s.w.a.t. team failed to smash their way into the building. police went to scramble their own helicopter, but found a bag in the hangar, planted by the robbers with the board bomb written on it. >> we decided we didn't dare use

the helicopter, this cop explained. when dawn broke, they found the thieves, chopper abandoned just outside the city. just one man was arrested. the most obvious clue we've got is the helicopter, said the police spokesman. the other clues, we choose to work with. in silence. this heist was like something on the silver screen. the thomas crown affair perhaps. hollywood loves bank robbers. joe loya knows, he used to be one. >> and so as somebody goes and robs a bank, they are not considered a bad criminal. and the fact that the hollywood hunks have been playing them for years it's a crime. >> once hollywood was inspired by robbers. >> are you stupid or what, did you hear what i said? did you hear what i said? what's the matter with you? >> "goodfellas," my favorite

movie of all time, was based on the 1978 lufthansa heist at jfk. now it seems to work the other way around, hollywood inspires the robbers. on millennium eve on london, the thieves decided to try to steal the diamonds. >> the get away was by speedboat. >> hang on. didn't that happen in the world is not enough? there is still a romantic fascination watching footage like this. robbers escaping a diamond store this summer. >> the press builds them up into a form of heroic figure. when you know the people and you deal with them, they're the vile, greedy, self-centered, cruel individuals you can imagine. >> tonight, a gang of them is on the run from police in sweden.

sexy, romantic heroes or vile dirt bags? you decide. i'm nick watt for "nightline" in london. >> something out of a movie there. our thanks to nick watt. when we come back, after a dubious day at the general assembly has the united nations hit a new low? that's the subject of tonight's "closing argument."