Defendant Admits Role as Agent of the Russian Federation and in Money Laundering Conspiracy 

UNITED STATES ATTORNEY'S OFFICE   - District of Oregon  - August 27, 2009

Portland, Ore. – Acting U.S. Attorney Kent S. Robinson 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 Federal Bureau of Investigation (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.(USDOJ)

10 August 2009
By Anna Malpas / The Moscow Times

A senior U.S. diplomat in Moscow was caught up in a sex scandal on Friday, after a grainy video that purports to show him meeting prostitutes was picked up by national newspapers.The man is named as Kyle Hatcher, the second secretary of the U.S. Embassy, in the video, which was originally published Thursday on Informacia.ru. The video was covered in Izvestia and Komsomolskaya Pravda on Friday.Izvestia ran a story headlined “An American Diplomat Knows How to Negotiate With Russian Tarts,” while Komsomolskaya Pravda headlined its story “Smut: The Sin of a Diplomat.”A spokeswoman for the U.S. Embassy said she was aware of the story but that she could not comment or confirm whether Hatcher works at the embassy.Hatcher’s cell phone was switched off Friday afternoon.His work involves meetings with Russian Orthodox Church priests, a fact mentioned in the news coverage. The web site of the Moscow Patriarchate writes that he attended a meeting between Patriarch Kirill and U.S. Ambassador John Beyrle on July 3.His profile on the Linkedin.com networking web site says he became a foreign service officer in 2007 after working as a financial analyst at the Treasury Department. The Izvestia story says the makers of the video approached Hatcher with a blackmail demand and published the video after he approached embassy officials for help.The heavily edited video does not show any sex and is too grainy for the man’s face to be clearly identifiable. It begins with recordings of a man speaking Russian with a foreign accent, who talks to women called Tina, Sonya and Veronika on the telephone and arranges meetings. One of the addresses is on Kutuzovsky Prospekt.The film also shows a man in winter clothing talking on the phone on a snowy street.It then cuts to a hotel room with a man in a T-shirt and shorts lying on the bed. He stands on a chair and checks something close to the camera. A woman comes in and the couple are shown undressing and walking to the bathroom.The article on Informacia.ru says the scenes were filmed in March. It also insinuates that Hatcher works for the CIA.The web site’s chief editor, Vladimir Alexandrov, said in e-mailed comments Sunday that the video came from a “proven and trustworthy source,” declining to elaborate.The same web site ran a video showing a man resembling British diplomat James Hudson having sex with two prostitutes in July. Hudson, who served as the deputy consul general in Yekaterinburg, resigned from the Foreign Office after The Sun covered in the story.(The Moscow Times)

Eric O'Neill, Former FBI Agent, Robert Hanssen Case

Eric O'Neill, Former FBI Agent, Robert Hanssen Case gives a detailed look into the Robert Hanssen spy case. Mr. O'Neill was an FBI agent involved in catching Mr. Hanssen. The FBI forbade Mr. O’Neill to speak publicly until recently. Mr. O’Neill served as a special consultant to the movie “Breach,” which opened in theaters. 

WASHINGTON (Washingtonpost/Reuters) - Eric O'Neill was a young,FBI surveillance operative when recruited for a new assignment: help catch perhaps the most damaging spy in U.S. history. O'Neill was assigned to FBI headquarters in January 2001 in an undercover role to assist veteran FBI special agent Robert Hanssen, a suspected mole who had been compromised by the Russians.An FBI team of hundreds investigating Hanssen hoped the 26-year-old O'Neill, who was not even an agent, would gain Hanssen's trust and help catch him in the act of passing U.S. secrets.Hanssen's arrest six years ago, his subsequent guilty plea to more than 20 years of spying and his sentence of life in prison are well known, but details of O'Neill's role were scarce until the recent release of the movie "Breach," based on his story.In the Universal Pictures' film, actor Ryan Phillippe stars as O'Neill, while Academy Award winner Chris Cooper plays Hanssen.In an interview, O'Neill talked about the notorious case now made famous by Hollywood, saying he was amazed the FBI would bring in someone so young for such a mission."These cases come up once every several decades," O'Neill said.FBI officials said O'Neill's background in computers helped get him the assignment. Hanssen was reassigned on January 13, 2001, to a newly created job at headquarters to help revamp the FBI's computer system.But the assignment created so the FBI team could monitor Hanssen's daily activities without tipping him to their investigation."We hoped he (O'Neill) could pull it off without arousing suspicion," said one FBI agent. "They took a chance on him."At one point, O'Neill almost got caught in one of the movie's most dramatic scenes.

'THAT WAS THE WORST'

Hanssen left his office as arranged to go to the FBI's firing range. Hollywood enhanced the story line to have him also lose patience at a picture-taking session for a portrait to commemorate 25 years with the bureau.While the veteran agent was gone, O'Neill took Hanssen's Palm Pilot and copied information but nearly got caught because he almost put it back in the wrong pocket of Hanssen's briefcase."I sat there thinking I've just ruined this entire operation," O'Neill said. "That was the worst."It turned out O'Neill had put the hand-held device back in the correct pocket. Hanssen asked him if he had been in his briefcase. "I just lied the best I could and convinced him," O'Neill said.Court documents said the device contained a specific upcoming date, time and reference to the site in nearby Virginia where Hanssen and the Russians exchanged information. The details led to Hanssen's arrest.In another scene, O'Neill had to keep Hanssen away from headquarters so FBI agents could search his car. The quick-thinking O'Neill first got them stuck in a traffic jam and then convinced Hanssen to get back into the car instead of walking back to headquarters. The evidence obtained from that search included secret documents about ongoing FBI counterintelligence investigations, among other things, according to the court records. The government contended Hanssen's disclosures were among the most damaging ever to U.S. interests. O'Neill could not even tell his wife, Juliana, about the real purpose of his mission, which created tension in their new marriage. "It was very difficult to lie to her, but I was required to. That just goes with the job," O'Neill said. After Hanssen's arrest on February 18, 2001, O'Neill went back to his old job and decided to leave the FBI in May 2001. In the movie, he packed up his desk on the day Hanssen was arrested. "The hardest decision I made was to leave the FBI," O'Neill said. "I just decided that this wasn't the sort of life I wanted to live." A graduate of George Washington University law school, he now works for a law firm in Washington, specializing in national defense. The movie provided no definitive reason why Hanssen sold out his country for $1.4 million in cash and diamonds. It does have Hanssen speculating after his arrest that another American spy might have acted because of ego or an urge to expose lax U.S. security.

15/6/03 -  Moscow revealed  that a Russian intelligence officer who had settled in the United States had been lured back home and arrested.Aleksandr Zaporozhsky, a former colonel in the S.V.R., Russia's foreign intelligence service, has been sentenced to 18 years in jail for spying for the United States, Russian officials disclosed.Mr. Zaporozhsky had been living in Maryland but in November 2001 was somehow induced to return to Moscow, where he was quietly arrested and jailed.Russian news reports of his sentencing  suggested that he had been drawn into an ambush because he was suspected of helping the United States identify and arrest Robert P. Hanssen, who admitted to being a Russian mole inside the F.B.I. In addition to the Russian news media, The Los Angeles Times reported on Mr. Zaporozhsky's case .Apart from the timing of Mr. Hanssen's arrest, which occurred several months before Mr. Zaporozhsky was seized in Moscow, there is no available evidence to support the Russian news accounts that Mr. Zaporozhsky played a role in the Hanssen case. C.I.A. officials declined to comment on the matter.Russian FSB investigators believe that agents inside their own intelligence service provided information that led to the arrests of Aldrich H. Ames and Mr. Hanssen, the two most important Russian spies discovered in the past decade inside the American government.In the Hanssen case, the Federal Bureau of Investigation has acknowledged that it received information from a Russian source that led to Mr. Hanssen's arrest. That source is not the same person who provided help in the Ames case, officials said. The Russian source in the Hanssen case provided files and other materials from Russian intelligence archives that identified Mr. Hanssen as a longtime spy for Moscow. Among the materials the source provided was the plastic that Mr. Hanssen had used to wrap classified F.B.I. documents when he left them for the Russians at clandestine drop sites in the Washington area. After obtaining the plastic from the Russian source, the bureau found Mr. Hanssen's fingerprints on the wrapping.
After handing over the files used in the Hanssen case, the Russian source defected and was paid $7 million by the United States for his assistance, according to a book about the case by David Wise. The Russian's identity remains a closely guarded secret in the United States government.American officials believe Russian intelligence is still concentrating on the United States, aggressively trying to recruit American spies who can hand over technical, economic and political secrets.

2. Jailing in Russia of Supermole After Hanssen Arrest - Russian TV Combined Video

Many stories have emerged about how the CIA tracked down Hanssen.According to this Russian version - Investigation on Alexander's Zaporozhsky business  last almost one and a half year. 30 witnesses, the majority of them - operating(working) and former employees of the Russian FSB. The judge of the Moscow district military court has read  a verdict of one and a half hour, journalists have allowed to be present only on in the  final part. All rest - the state secret. The head of the Center of public relations of FSB Sergey Ignatchenko said: " If it was  in the USA, at least, he could get life imprisonment , or electric chair ".
Alexander Zaporozhsky started to work  in 1975, in KGB, then in SVR in a department, engaged in recruitment of informants  in the USA. An excellent track record.Unexpectedly for the colleagues in 1997 he leaves and secretly leaves to the USA .The Colonel Zaporozhsky has appeared for the western special services a figure extremely useful. Investigation has found out, that the Colonel has offered the services to CIA itself in 1995.He left to USA  under the invitation of mysterious firm. In February, 2001 employees of FBI have arrested Robert Hanssen . USA has declared persona non grata of 26 Russian diplomats. In FSB they directly do not admit that fact , that it became consequence of treachery by Zaporozhsky . Nevertheless,  they confirm, that his activity has caused enormous damage to interests of the Russian special services in the West. In 2001 as a result of complex & difficult operation against Zaporozhsky it was possible to lure him to Russia where he has been arrested. The Russian news video brings together Zaporozhsky & Hanssen`s FBI video arrest.The FSB`s PR officer Sergey Ignatchenko speaks in this rare video.

Russian Version