"Bond is sent by M to a clinic to improve his health. While massaged by physiotherapist Patricia Fearing, he notices Count Lippe, a suspicious man with a criminal tattoo (from a Tong). He searches Lippe's room, but is seen leaving by Lippe's clinic neighbour who is bandaged after plastic surgery. Lippe tries to murder Bond with a spinal traction machine, but is foiled by Fearing, whom Bond then seduces. Bond finds a dead bandaged man, François Derval. Derval was a French NATO pilot deployed to fly aboard an Avro Vulcan loaded with two atomic bombs for a training mission. He had been murdered by Angelo, a SPECTRE henchman surgically altered to match his appearance.
Angelo takes Derval's place on the flight, sabotaging the plane and sinking it near the Bahamas. He is then killed by Emilio Largo (SPECTRE No. 2) for trying to extort more money than offered to him. Largo and his henchmen retrieve the stolen atomic bombs from the seabed. All double-0 agents are called to Whitehall and en route, Lippe chases Bond. Lippe is killed by SPECTRE agent Fiona Volpe for failing to foresee Angelo's greed. SPECTRE demands £100 million in white flawless uncut diamonds from NATO in exchange for returning the bombs. If their demands are not met, SPECTRE will destroy a major city in the United States or the United Kingdom. At the meeting, Bond recognises Derval from a photograph. Since Derval's sister, Domino, is in Nassau, Bond asks M to send him there, where he discovers Domino is Largo's mistress."
Yep, I think this must be how it happened.