Imprisoned Spy and His Son Indicted on Charges of Acting as Russian Agents and Money Laundering

WASHINGTON -- A federal indictment was unsealed today in U.S. District Court for the District of Oregon charging Harold James Nicholson, 58, of Sheridan, Ore., and Nathaniel James Nicholson, 24, of Eugene, Ore., with two counts of Conspiracy, one count of Acting as Agents of a Foreign Government, and four counts of Money Laundering.

Both defendants are scheduled to appear today at 1:30 p.m. before U.S. Magistrate Janice M. Stewart for arraignment on the indictment. The maximum penalty for the substantive charge of acting as an agent of a foreign government is ten years imprisonment, while the maximum penalty for conspiracy to act as an agent of a foreign government is five years imprisonment. Each money laundering count, including the money laundering conspiracy, carries a maximum of twenty years imprisonment. The indictment also seeks forfeiture of funds provided to Nathaniel J. Nicholson by the Russian Federation, which the indictment alleges are the proceeds of his father’s past espionage activities.

As set forth in the indictment, Harold J. Nicholson, a former CIA employee, is serving a 283-month (more than 23-year) sentence at the Federal Correctional Institution in Sheridan, Ore., for a 1997 conviction of conspiracy to commit espionage. The indictment further alleges that defendant Harold J. Nicholson, working through his son Nathaniel J. Nicholson, received cash proceeds of his past espionage activities from, and passed information to, agents of the Russian Federation between 2006 and 2008.

As described in the indictment, during the course of the conspiracy, Nathaniel J. Nicholson met with his father Harold J. Nicholson on several occasions to obtain information that was intended to be provided to the Russian Federation. Defendant Nathaniel J. Nicholson then travelled to various places to meet with representatives of the Russian Federation, including San Francisco, Calif.; Mexico City, Mexico; Lima, Peru; and Cyprus, where he collected money from them and received additional instructions. Defendant Nathaniel J. Nicholson then brought the funds he received back to Oregon to disperse to family members at the direction of his imprisoned father.

The indictment further alleges that the funds paid by the Russian Federation to defendant Nathaniel J. Nicholson represented proceeds of his father’s past espionage activities. For more information, please refer to the indictment and search warrant affidavit.

http://www.usdoj.gov/usao/or/PressReleases/2009/NicholsonIndictment.pdf http://www.usdoj.gov/usao/or/PressReleases/2009/NicholsonAffidavit.pdf U.S. Attorney for District of Oregon, Karin J. Immergut stated, "The conduct alleged in the indictment shows a sinister and continuing scheme by a former senior CIA officer turned spy to betray the United States of America for financial gain. Thanks to the continued vigilance of the FBI, and the extraordinary cooperation of the Bureau of Prisons, we expect to hold a former spy, and the son who joined him in his criminal conduct, responsible for their actions."

Matthew G. Olsen, Acting Assistant Attorney General for National Security, said, "Today’s indictment alleges that an imprisoned spy recruited and trained his own 24-year-old son to travel the globe to collect on past spying debts and channel information to foreign agents. These charges underscore the continuing threat posed by foreign intelligence services and should send a clear message to others who would consider selling out their country for money."

"Harold James Nicholson, already convicted of spying and compromising national security, thought he could profit from his previous espionage despite being behind bars," said Executive Assistant Director Arthur M. Cummings, II, of the FBI National Security Division. "Now, along with his son, he again acted against the interests of the United States, according to the charges."

"This is an amazing case," said David Ian Miller, Special Agent in Charge of the FBI in Oregon. "Harold James Nicholson, a convicted spy, was allowed to serve time in a federal prison in Oregon to be near his family. Without regret, he used that proximity to his family to continue contact with the foreign country for which he was previously convicted of spying."

The FBI and the Federal Bureau of Prisons investigated this case. Assistant U. S. Attorneys Pamala Holsinger and Ethan Knight are prosecuting this case. Trial Attorney Patrick Murphy of the Counterespionage Section of the Justice Department’s National Security Division is also assisting.

An indictment is only an accusation of a crime, and a defendant should be presumed innocent unless and until proven guilty.

Note: Photo included.

http://www.fbi.gov/headlines/james_nicholson.jpg

Note: The following text is a quote:

http://www.fbi.gov/page2/feb09/familyspies_020209.html

ALL IN THE FAMILY
Spy and His Son Indicted
02/02/09

In a spy case eerily reminiscent of one from more than two decades ago, a federal indictment was unsealed January 29 charging a father and son with conspiracy against the United States.

Harold J. Nicholson—a former CIA employee—and his 24-year-old son Nathaniel were charged in Portland, Oregon with two counts of conspiracy, one count of acting as an agent of a foreign government (in this case, Russia), and four counts of money laundering.

As you might remember, another father and son team—John and Michael Walker—were charged in 1985 with spying for the Soviet Union. (Walker also brought his brother Arthur into the fold.)

The kicker in all this? Harold Nicholson is already in prison, serving a more than 23-year sentence at the Federal Correctional Institution in Sheridan, Oregon for his 1997 conviction on charges of conspiring to commit espionage for the Russian Federation.

Being behind bars, though, apparently didn’t stop Nicholson—he allegedly continued his attempts at maintaining his relationship with the Russians through his son.

How he did it. According to charges, Harold Nicholson felt he was owed additional payment from his Russian handlers for the classified national defense information he provided them during the 1990s. He may have first attempted to communicate with his handlers through fellow prisoners in the year 2000 by convincing the inmates to have visiting family members or friends mail letters for him. Later on, he was more successful in convincing a soon-to-be-released inmate to mail a package for him.

In addition to wanting his Russian “pension”—as he termed it—for services rendered, Nicholson believed he still had sensitive information that would be of use to his handlers but was afraid the information would soon become stale and worthless.

Partners in crime. According to a court affidavit, by 2006 Nicholson had turned his focus to his son Nathaniel, communicating with him through the limited means available in prison—letters, telephone calls, and visits—to garner his assistance as a go-between. It worked: beginning in December 2006, Nathaniel took the first of many overseas trips on behalf of his father—the first to Mexico City, where we believe he met with Russian intelligence officials, passed information from his father, and received money.

Over time, Nicholson allegedly instructed his son on how to collect money from the Russians in a covert and secretive manner, how to avoid detection by law enforcement, and how to avoid international currency reporting requirements upon returning to the States with U.S. currency from Russian handlers.

Court documents show that Nathaniel took a series of trips from December 2006 to December 2008 to meet with agents of the Russian Federation in San Francisco; Mexico City, Mexico; Lima, Peru; and Cyprus. He allegedly collected money while on these trips and received additional instructions from his handlers. He then brought the money back to Oregon to disperse to family members…at the direction of his father.

The indictment against the two men also seeks forfeiture of the money given to Nathaniel Nicholson by the Russian Federation, alleged to be the proceeds of his father’s past espionage activities.

Resources:
- Press release
- FBI Counterintelligence website

August 27, 2009

Note: The following text is a quote:

http://portland.fbi.gov/dojpressrel/pressrel09/pd082709.htm

Son of Imprisoned Spy Pleads Guilty to Two Counts of Federal Indictment
Defendant Admits Role as Agent of the Russian Federation and in Money Laundering Conspiracy

WASHINGTON—Acting U.S. Attorney Kent S. Robinson and David Kris, Assistant Attorney General for National Security, announced today that Nathaniel James Nicholson, 25, of Eugene, Oregon, appeared before U.S. District Judge Anna J. Brown and pled guilty to the crimes of conspiracy to act as an agent of a foreign government and conspiracy to commit money laundering. The maximum penalties for those crimes are five years in prison and a fine of $250,000, and 20 years in prison and a fine of $500,000, respectively. Judge Brown scheduled sentencing on January 25, 2010.

Nicholson’s father, Harold J. Nicholson, a former Central Intelligence Agency (CIA) employee, is serving a 283-month sentence at the Federal Correctional Institution (FCI) in Sheridan, Oregon, for a 1997 conviction of conspiracy to commit espionage. The government alleges that defendant Harold J. Nicholson, working through his son Nathaniel J. Nicholson, received cash proceeds for his past espionage activities from agents of the Russian Federation between 2006 and 2008.

Nathaniel J. Nicholson, who has been on pre-trial release, admitted in his plea that he met with his father, Harold J. Nicholson at the prison in Sheridan on several occasions. At these meetings, he received information and directions from his father regarding his contact with agents of the Russian Federation. Defendant admitted he traveled to several locations outside the United States, met with agents of the Russian Federation, and received money in return. Nicholson admitted to receiving instructions from an agent of the Russian Federation to obtain information from his father Harold J. Nicholson. After collecting money from the Russian Federation, he disbursed the money to family members as directed by Harold J. Nicholson.

In entering his plea of guilty, defendant admitted the funds he received from the Russian Federation were proceeds of his father’s past espionage activities. Defendant further admitted traveling to the following international locations and returning to Portland, Oregon with funds received from the Russian Federation:

Defendant returned to Portland, Oregon on December 17, 2006 from Mexico City, Mexico with approximately $10,000 he received from an agent of the Russian Federation.
Defendant returned to Portland, Oregon on July 12, 2007 from Mexico City, Mexico with approximately $9,080 received from an agent of the Russian Federation.
Defendant returned to Portland, Oregon on December 13, 2007 from Lima, Peru with approximately $7,013 received from an agent of the Russian Federation.
Defendant returned to Portland, Oregon on December 14, 2008 from Cyprus carrying approximately $9,500 received from an agent of the Russian Federation.
As part of the plea, the defendant agreed to forfeit the $9,500 seized by the FBI on December 15, 2008 upon his return from Cyprus. Additionally, as part of the plea, he has agreed to testify on behalf of the government about his conduct involving his father and the Russian Federation between 2006 and 2008.

“In his guilty plea today, Nathaniel Nicholson acknowledged his role in the ongoing conspiracy with his father to collect money from the Russian Federation for his father’s past espionage activity,” stated Acting U.S. Attorney Robinson. “His plea and his agreement to provide truthful testimony show his willingness to accept responsibility for his actions.”

“Nathaniel Nicholson traveled the globe to collect money from and pass information to Russian agents on behalf of his imprisoned father, one of the highest-ranking CIA officials ever convicted of espionage. By doing so, Nathanial joined his father’s long-running criminal scheme to provide information to Russia for financial gain. I applaud the many agents, analysts and prosecutors whose tireless efforts helped bring about this guilty plea,” said David Kris, Assistant Attorney General for National Security.

“Despite imprisonment, convicted spy Harold Nicholson was able to profit from his previous acts of espionage by continuing to collect money from the Russian Federation through his son, Nathaniel James Nicholson,” said Executive Assistant Director Arthur M. Cummings, II, of the FBI National Security Division. “Today’s plea comes only after countless hours of dedicated effort by FBI investigators and analysts in Portland working with our partners to uncover the Nicholsons’ activities and once again disrupt their acts to profit from providing information to the Russian Federation.”

The Federal Bureau of Investigation and the Federal Bureau of Prisons (BOP) investigated this case. Assistant U. S. Attorneys Pamala Holsinger and Ethan Knight are prosecuting this case. Trial Attorney Patrick Murphy of the Counterespionage Section of the Justice Department’s National Security Division is also assisting.

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