Lee is a drug addict and minor cocaine smuggler, called "the Snowman," who has frustrated and alienated his family. Lee agrees to contact and deal with the KGB's agents in Mexico on Boyce's behalf, motivated not by idealism but by what he perceives as an opportunity to make money, then eventually settle in Costa Rica.
As the pair become increasingly involved with espionage, Lee's ambition to create a major espionage business coupled with his excessive drug use begins to alienate the two from each other. Alex, their Soviet handler, becomes increasingly reluctant to deal through Lee as the middleman because of Lee's periods of irrationality. Boyce wants to end the espionage so that he can resume a normal life with his girlfriend Lana and attend college. He meets with Lee's KGB handler to explain the situation. Lee is desperate to regain the Soviets' regard after realizing that the KGB no longer needs him as a courier. Lee is observed tossing a note over the fence at the Soviet embassy in Mexico City. He is arrested by Mexican police and a U.S. Foreign Service officer accompanies him to the police station.
When the police search his pockets and find film (from a Minox camera Boyce used to photograph documents) and a postcard (used by the Soviets to show Lee the location of a drop zone), they produce pictures of the same location that was on the postcard, showing officers surrounding a dead man on the street. The Foreign Service officer explains that the Mexican police are trying to implicate him with the murder of a policeman. The police drag Lee away and torture him.
Hours later, he reveals that he is a Soviet spy. Told by the Mexican police that he will be deported, Lee is offered a choice of where to be sent. Lee suggests Costa Rica, but the choice is merely between the Soviet Union and the United States. Lee reluctantly agrees to go back to America and is arrested as he walks across the border.
Knowing that he too will soon be captured, Boyce releases his pet falcon named Fawkes and then sits down to wait. Moments later, U.S. Marshals and FBI agents surround and capture him. Lee and Boyce are seen in jumpsuits and shackles flanked by officers escorting them to prison.