Actually, he's quite correct, ALL foreign citizens require visas to enter the Russian Federation. I realise Canadians, Brits and Americans aren't used to this idea, since your passport alone takes you most places, but there are still a few countries that require everyone to get a visa regardless of their origin. The Russian Federation is one of them.
In most of such countries, the process is not as rigourous as say, getting an American visa, sometimes all you need to do is fill in a form and submit it with the correct payment. Going to Cuba requires you to purchase a visa for (last time I went) USD$25 and that was it. Of course, any police person could stop you and ask you for your visa, and you had better be able to present it. Also you had to ensure you submitted it on departure, you were not allowed to leave the country with it or without surrendering it.
OP, I would suggest your family members get tourist visas. These are good for 14-30 days, and require that your family members have booked and confirmed accommodations.
Here's a helpful site:
http://www.visatorussia.com/russianvisa.nsf/step2.html
Immigration Forum
