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FOR IMMEDIATE RELEASE
Thursday, January 29, 2009
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.

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.

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