After Sosnowski told her in Berlin of his espionage activities and she learnt of his numerous affairs with other women she panicked and confided with an acquaintance, who unbeknownst to her passed the information on to the SS.

Niako was spared from punishment through the intervention of Walter Schellenberg of the SS, who transferred her to his office for unspecified activities, with the threat that the prosecution against her could be resumed at any time she chose not to co-operate with him.

According to an article on Niako published in the Austrian magazine Die schöne Frau in 1936, her mother was a German woman from the island Fehmarn and her father was Persian.

[6] Nude dancing, or nackttanz, was at the time popular among female dancers in Germany and elsewhere as an artistic expression of modernity and emancipation.

[6] Already by September 1926, the Cuban newspaper Diario de la Marina reported on Niako having performed successfully in Vienna.

[15] While in Portugal, Niako was also painted by the painter António Soares [pt], a key figure in Portuguese modernism who was fascinated by her beauty.

[17][20] Sosnowski had lived in Berlin since 1926, posing as the nobleman "Georg von Sosnowski Ritter von Nalecz" and through the seduction of three secretaries within the Ministry of the Reichswehr succeeded in acquiring copies and notes of high-level German military correspondence, including details of the impending German mobilization and the secret cooperation between Germany and the Soviet Union.

[20] Sosnowski promised Niako that he would use his money and influence as an aristocrat to make her into a great movie star if she accompanied him back to Berlin.

The Abwehr had put Sosnowski under watch already in 1932, suspicious of the quick rise of a Polish officer in the Berlin social scene.

[8] Sosnowski was aware that his arrest was imminent, perhaps having been warned by Niako, but decided to organize a grand farewell ceremony before leaving Berlin,[8] on 24[8] or 27 February.

[22] Niako was to perform a selection of Spanish dances and Sosnowski intended to leave quietly for Warsaw in the middle of the party.

[8] Accounts differ in regard to how the arrest itself transpired; the night ended either with Sosnowski and Niako retiring to his apartment at 36 Lützowufer Street with a small number of the attendees to celebrate her career[22] or developed into an orgy after Niako's performance whereafter Sosnowski left alone around midnight and was arrested by the Gestapo officers present.

[8] With the aid of Joseph Goebbels and Julius Schaub,[23] Schellenberg had Niako transferred to his office with the warning that the prosecution against her could be resumed at any time she chose not to co-operate with him.

[8] Niako wished to return to her dancing career, but Goebbels opposed this, noting that it was a 'difficult topic' on account of the Sosnowski affair.

[29] Unhappy with the lukewarm state of her career, Niako in 1939 personally petitioned Adolf Hitler to help her secure a permanent contract with UFA GmbH, a major film company.

Instead of Hitler, she then negotiated with his adjuntant Alwin-Broder Albrecht, who only managed to secure for Niako a promise that she would be "given the possibility to act in films with dance sequences".

The Hungarian and Austrian director Géza von Cziffra (1900–1989) claimed in his memoirs that Niako had a sexual relationship with Hitler.

Cziffra's memoirs were deemed to be based on "unsubstantiated speculation" by the English historian Bill Niven in 2018, who concluded that it was perhaps possible that Hitler had assisted her with the UFA contract but that "there is no more to it than that".

[23] Despite the complete lack of evidence, the claims have sometimes been exaggerated even further, attaching Niako not only to Hitler but also to Goebbels, Albert Speer and Heinrich Himmler as a "lover of Nazi leaders".

[6] In 2020, the Polish author Marek Łuszczyna [pl] suggested that Niako was a German spy who seduced Sosnowski in 1933 on Nazi orders, though admitted that he had no evidence whatsoever for this hypothesis.

[17] The Catalan author Joan-Daniel Bezsonoff published a historical fiction novel in 2017 based on the Sosnowski incident and prominently incorporating Niako.

Titled La ballarina de Berlín ("The Ballerina of Berlin"),[36] the novel portrays Niako as a villainous figure who seduces Sosnowski on behalf of "her friends" Himmler, Goebbels, Speer and Hitler.