In this episode of Fedit, we cover Harold James Nicholson, the highest ranking CIA officer ever arrested for spying on the Soviet Union. He was a member of the Joint Improvised Explosive Device Defeat Organization (JIEDDO), a unit tasked with destroying all traces of Soviet Union spycraft.
00:00:01.000All right, we are live. What's up, guys? Welcome to FedIt. I know my voice is a little still under the weather, but we got a great show for you guys.
00:00:06.460We're going to talk about espionage between the United States and Russia. This is going to be a good one, guys. Let's get into it, man.
00:00:15.020I was a special agent with Homeland Security Investigations, okay, guys? HSI.
00:00:18.280The cases that I did mostly were human smuggling and drug trafficking.
00:00:23.380No one else has these documents, by the way.
00:02:50.720The Cold War, guys, is a term commonly used to refer to a period of geopolitical tension between United States and the Soviet Union and their respective allies, the Western Bloc and Eastern Bloc.
00:03:02.200The term Cold War is used because there was no large scale fighting directly between the two superpowers, but they each supported opposing sides in major regional conflicts known as proxy wars.
00:03:11.920The conflict was based around the ideological and geopolitical struggle for global influence by these two superpowers following the temporary alliance and victory against Nazi Germany and Imperial Japan in 1945.
00:03:21.700Aside from nuclear arsenal development and conventional military deployment, the struggle for dominance was expressed via direct means such as psychological warfare, propagandic campaigns, espionage, far-reaching embargoes, rivalry of sports events, and technological competitions such as the space race.
00:03:38.940And what we're going to focus on today is this right here, guys, espionage.
00:03:44.720Cold War espionage describes intelligence gathering activities during the Cold War between the Western Allies, primarily the U.S. and Western Europe, and the Eastern Bloc, primarily the Soviet Union and Allied countries of the Warsaw Pact.
00:03:55.100Both relied on the wide range of military and civilian agencies in this pursuit.
00:03:58.640And as you guys know, there's different agencies that are involved in this fight, but the two big ones are the CIA and the KGB.
00:04:05.840Now, that brings us to the subject that we're going to be talking about in today's episode, which is this guy, Harold James Nicholson.
00:04:11.800Born November 17, 1950, is a former Central Intelligence Agency officer who was twice convicted of spying for Russia's Foreign Intelligence Service, SVR.
00:04:20.920Now, CIA, as you guys know, is the United States' primary intelligence agency.
00:04:26.640It's known formally as the agency and historically as the company.
00:04:29.960It's a civilian foreign intelligence service of the federal government of the United States, officially tasked with gathering, processing, and analyzing national security information from around the world, primarily through the use of human intelligence and performing covert actions, a.k.a. waterboarding.
00:04:41.420And for you guys that are wondering, I'm sure you guys remember that we had Andrew Postamante, right, who was a former CIA officer.
00:04:57.600We talked about counterintelligence, espionage.
00:04:59.960We talked about a bunch of this stuff.
00:05:01.100So if you guys like that type of stuff, man, go ahead and check it out.
00:05:04.620Real-life James Bond-type content, okay?
00:05:06.760So yeah, the CIA, guys, is the United States' primary intelligence agency.
00:05:12.180Now we got the SVR, or the ops, okay, for lack of a better term.
00:05:16.600The Foreign Settlement Service of the Russian Federation, okay, I can't pronounce all that, or SVRF, is Russia's external intelligence agency focusing mainly on civilian affairs.
00:05:25.280The SVRF succeeded the first chief directorate of the KGB in December 1991.
00:05:32.780The SVRF has its headquarters in the Yersenevo district of Moscow.
00:05:37.060And as you guys know, the KGB was basically the CIA equivalent during the Soviet Union era, okay?
00:05:43.720And they came down, obviously, with the Soviet collapse in the early 1990s, aka 1991.
00:05:48.480So yeah, now that this all makes sense to you guys and you understand what the Cold War is, what espionage is, what the CIA is, and what the SVR, aka the KGB, is, right, formerly known as the KGB, now this is going to start to make a little bit more sense when we go into this documentary.
00:06:05.140Basically, guys, there's been a longstanding war between – I mean, hell, it's going on right now.
00:06:09.900I mean, you guys look at the war with Ukraine, right, the conflict with Ukraine and Russia.
00:06:14.120It's basically a proxy war for the United States.
00:06:15.760We had a pretty good discussion on that as well with Andrew Bostamante on how proxy wars, propaganda, espionage, you know, setting up certain things in different countries to set up certain situations for geopolitical climates to clash and war start.
00:06:31.960All of this, guys, is what happens with opposing countries.
00:06:36.580Even though we do have trade with Russia, they're definitely an adversary when it comes to the intelligence realm, okay?
00:06:42.300And we've been spying on them, and they've been spying on us for decades, okay, guys?
00:06:46.940So there's a whole unit in the FBI dedicated to Russian counterintelligence as well as there's also a unit dedicated to Chinese counterintelligence.
00:06:56.920And I didn't know this, but we learned it from the interview with Andrew.
00:07:01.300The Israelis have a really good intelligence agency as well.
00:10:58.840CIA director James Woolsey faced an audience of congressmen anxious to know why it took nine years to figure out that Alder James was working for the KGB.
00:11:08.240So, yeah, let's go ahead and cover this guy as well.
00:11:12.660So, Aldridge Ames, guys, all right, is probably – this is one of the worst compromises of U.S. intelligence, okay?
00:11:25.040So, Aldridge Hazen Rick Ames, born May 26, 1941, as a former CIA officer turned KGB double agent who was convicted of espionage in 1994, serving a life sentence without the possibility of parole in the federal correctional institution in Tarrant, Indiana.
00:11:40.100Ames was a 31-year CIA counterintelligence officer who committed espionage against the U.S. by spying for the Soviet Union and Russia.
00:11:46.740Ames was known to have compromised a more highly classified CIA assistant than any other officer until Robert Hansen was arrested seven years later in 2001.
00:11:54.700As you guys know, I did a whole breakdown on Robert Hansen.
00:11:57.100Y'all already know this was an FBI agent that was head of the Russian counterintelligence section at the Bureau.
00:12:03.900And he ended up getting arrested as well for espionage.
00:12:07.760So, we got two CIA operatives and one FBI agent that committed treason against their country.
00:12:13.920If you guys want, go back and check my Fed episode where I break this case down as well.
00:12:18.700But, yeah, Audra James, this obviously was, I would say, the stimuli to begin the probe against basically U.S. law enforcement and intelligence officers who have access to compromising information that could put us in a bad spot against an adversary like Russia who is highly capable and have good spies of their own.
00:12:43.220They have a strong military. And I know a lot of people hate Putin right now, but, you know, there's no doubt that Russia is a world superpower, which is why any time we're compromised by Russia, it's a big deal and they make it a spectacle.
00:12:55.180So, you got the CIA guy, Woosley, over here getting answered, answering questions to a bunch of dudes over in Washington, D.C. under oath.
00:13:04.720And no guy ever wants to be there answering questions like that, that it took nine years to catch this guy.
00:13:09.060But intelligence investigations guys are long term. They're difficult to do.
00:13:12.620And, you know, these guys are intelligent. They know what they're doing.
00:13:15.900They don't want to necessarily get caught. So they cover the tracks.
00:13:18.020You're going to see that the Nicholson's were no different.
00:13:22.500Intelligence sources say Ames had told the KGB about as many as 10 Russians who were working for the CIA.
00:13:29.420And guaranteed all those guys definitely got.
00:13:31.800And the Ames case broke open, that was a watershed event inside CIA where we had a high ranking case officer working for an extended period of time for the Russians inside of the building.
00:13:46.080For the agency, that triggered a introspective moment on how did this happen?
00:13:54.980For many years, we didn't believe it was possible.
00:26:06.260Run their counterespionage group that's responsible for uncovering spies.
00:26:12.240I got a call when I was in Los Angeles.
00:26:17.900We want you to come back and run this group.
00:26:19.900When I went over to the counterespionage group, I asked him if I could bring an assistant with me, somebody from the FBI, and John I had worked with previously in Los Angeles.
00:26:31.240This opportunity to be the first FBI agents really inserted in almost light cover within the CIA was what I call a singular opportunity.
00:26:42.680So as you guys can see, so you had the assistant special agent in charge overseeing this group, and now you have a supervisory special agent underneath him.
00:26:49.740So they're putting, they're not just putting regular agents over there, they're putting higher levels of bureau agents over there at the CIA, which tells you guys the seriousness of this, of how they're really trying to combat any moles in the CIA after the Ames arrest, which sets the stage for this case that we're going to cover today.
00:27:07.780I said to Ed, I'll come, and I've never regretted it.
00:27:13.340Most of the people in the CIA did not know I was there looking for a spot.
00:27:32.120But, you know, people in the government talk, you're over there with the CIA.
00:27:35.680The CIA hires some very bright people.
00:27:38.540So, of course, they're going to know that you're a bureau guy from the way that you speak, the way that you operate, the way that you convey yourself.
00:27:44.640It's very obvious when you meet a law enforcement guy, let alone an FBI agent.
00:28:39.740And there's been a rift between the FBI and the CIA for a very long time, guys, and the reason for that is because they're both intelligence agencies.
00:28:49.120The only difference is that the FBI is a law enforcement agency as well as an intelligence agency.
00:28:53.800CIA handles intelligence abroad, overseas, while the FBI handles intelligence domestically.
00:28:59.760And the CIA is supposed to refer anything to the FBI that touches domestic and or might have some type of terrorism nexus that law enforcement could thwart right away.
00:29:09.740That is why they've always had these longest standing issues.
00:29:12.380And if you guys watch our 9-11 breakdown, the CIA, excuse me, the FBI blamed the CIA for not giving them information ahead of time where they had identified hijackers that were actually in the United States.
00:29:25.920So this has been a longstanding issue between agencies, which is kind of funny for me as a former Homeland guy, because I'm not in the middle of this BS.
00:29:34.380I told you all before, classified stuff is useless.
00:29:36.140Now, when I get over there, I get all my briefings, and I learned that I had over 300 cases in the CIA where CIA employees had failed its counterintelligence polygraph.
00:29:50.160That means is that you had 300 potential spies in the CIA that had never been resolved.
00:29:55.680At the time, if you fail a CIA polygraph, nothing ever happens to you.
00:29:59.440Alder James had failed the polygraph several times, and nothing was done.
00:30:25.000They get a baseline of what your bodily functions are like, right?
00:30:30.100Your demeanor, when you tell the truth.
00:30:31.800Then they start pressing you about questions that might get you to lie.
00:30:36.700And then they see how your body reacts to those.
00:30:39.520And then that's when they make a, and I'm saying this, we're air quotes here, determination that you might be displaying deceptive trait, deceptive practices or behaviors, right?
00:30:50.320And then they can go ahead and fail you or give you inconclusive or whatever.
00:30:53.040But the point I'm trying to make is that it's extremely subjective based on the polygrapher.
00:30:56.940And there's been many people that beat polygraph tests.
00:30:59.440It's just another tool in the toolkit for them to kind of know where to pry and ask questions.
00:31:22.960So what he means by all these, all these guys got failed their polygraphs.
00:31:26.580He doesn't mean their initial polygraph to get the job.
00:31:28.700They mean during the course of their career, you've been in a CIA, let's say you've been in CIA for 20 years.
00:31:33.760You're going to probably go through four to five different polygraphs, maybe even more depending on your security clearance.
00:31:39.220If you have an SCI, you might do it damn near every three years.
00:31:41.400So that's what he means when he says, oh, we have to do their polygraphs because a lot of people might get confused.
00:31:49.360Like, wait, how did they get the job if they fail the first time?
00:31:51.500No, they passed the first one to get the job.
00:31:53.780After they get the job, they have to keep going through re-ups.
00:31:55.880And it's very difficult to fire a government employee.
00:31:58.180So a lot of times I could see why CIA people and or government people might not necessarily lose their job for failing a polygraph for getting an inconclusive.
00:32:07.380But this guy came in and put an end to that.
00:34:21.820So you got a guy with a bad poly, and you find out that Eldrick Ames, right, you know all the information he gave over, and some of the things that they were compromised in wasn't necessarily Ames' information.
00:34:35.240So you can only imagine, right, what's going through their minds, like, do we have another spy?
00:34:40.340And remember, guys, this is their early 90s.
00:34:48.400And they're like, yo, dude, we got to catch this other guy immediately, because this information that's being compromised didn't come from Ames.
00:34:55.260So you can only imagine the craziness in their head.
00:35:01.220Because the longer you wait, the more American lives that can be lost.
00:35:05.700The FBI team had already whittled down their cast of possible candidates, and one of those was Jim Nicholson.
00:35:12.680Jim Nicholson was working as a single dad, and had custody of his three children.
00:35:20.640For Jim, I think the divorce clearly precipitated some financial strains that weren't there before.
00:35:26.540Now being a single father, having to pay alimony, all those sort of pressures were coming to bear, together with his expensive tastes, you know, tailored suits as opposed to off the rack.
00:35:35.220His lifestyle demanded more money than you could make as a case officer, and it looked like he might be interested in making more money.
00:35:43.980It's one thing to go after a spy who may have only had one course in counterintelligence.
00:35:48.080It's another thing to know you're going up with the senior varsity.
00:35:51.720He was an extremely well-trained spy with a great deal of previous experience.
00:35:56.400We all knew that if we make one mistake with this guy, he's gone.
00:35:59.940So with that information in hand, certain opportunities came up.
00:36:04.320One of them was Jim's announced vacation to Singapore.
00:38:32.620The reason why it's against the law, guys, because when you have a clearance to the same level, this guy with the background that he has, with the position that he has, the title he has, you need to declare anytime you go into a foreign embassy.
00:38:45.260So that is why they knew right away that this is probably their guy from an espionage standpoint, and he's not authorized to be there, especially in the embassy of a hostile country like Russia.
00:38:56.320Well, after identifying Jim in Singapore as our spy, the next challenge was where do we position him so that he can do the least amount of damage?
00:39:03.680So after discussion, this is actually a very good tactic that the government employs anytime they have someone who they suspect of FBI does all the time of being involved in espionage or selling secrets or whatever.
00:39:17.620They immediately move him into somewhere where they feel like they're getting a promotion.
00:39:22.640Hell, they might even get paid more, right?
00:39:24.180So that doesn't trigger any alarms, but they lose a significant amount of access.
00:39:30.720They lose reach, and they're no longer put in a situation where they can continue to compromise intelligence.
00:39:38.500Now, of course, being a spy, they're going to try.
00:39:41.120But what this does is it allows them to protect the security of the investigation while simultaneously putting the suspect in a location where they can't necessarily compromise classified information to the same degree.
00:40:02.380The decision was made to put him as a branch chief in the counterterrorism center.
00:40:05.680Given the environment at the time, you know, this pre-9-11, that would be the place in which we could most effectively contain additional damage that he might do.
00:40:16.500You don't demote him because then he's wondering what's going on here.
00:40:18.760But you promote him, you're letting him know he can go do what he wants because nobody's watching me.
00:40:24.840So it was finally in June 1996 that Jim began...
00:40:27.420And typically, they'll get promoted to, like, a supervisor, maybe one step higher than they were prior,
00:40:31.600so they still have the illusion in their head that they have access, they're not in trouble, et cetera.
00:40:37.340Because the last thing you want to do is trip one of these types of guys off because they'll cover their tracks immediately.
00:40:42.360Again, his new duties as a branch chief.
00:40:44.120They did the same thing to Robert Hansen as well when they were investigating him.
00:42:00.940Like these 24-7 surveillance is not as exciting as you guys think, especially when it's someone like this that's smart about how they move.
00:42:08.720They're not necessarily committing a crime that you can see all over, you know, overtly.
00:42:12.960And they're typically living a regular life.
00:42:15.980It's not like a drug dealer where you're seeing them meet with a bunch of other, you know, drug dealers and addicts, et cetera.
00:42:22.300This is a dude that might get a piece of information every now and then and decide, you know what?
00:44:01.440But you're going to see what they call them in for.
00:44:03.040I think at my brand new desk in HR, one morning, I got a call from the front offices and the boss up there called up and said, don't tell anybody where you're going.
00:47:35.180They're making him feel like the target here.
00:47:37.120They're making him feel like he has some authority because he's able to actually interview the guy who's acting in an undercover capacity to actually spy on him.
00:47:46.420So this is a smart move to make that person still feel comfortable and still have like they have some type of authority.
00:47:51.660The activity, you always come back and reflect on what you did.
00:47:55.920And I came away with the opinion that it went pretty good.
00:47:59.380Jim did an excellent job as a manager choosing the best person for that job.
00:48:09.040And it was probably the last person he wanted to have next to him.
00:48:11.620And ended up sitting in the desk in the office right next to.
00:48:14.880And more than likely, guys, the reason why the FBI selected this guy to be the case officer is because he probably was a go-getter, probably had a good reputation and knew that if he was the one to be interviewed by the target, he would more than likely get the position.
00:48:39.340They're going to, you know, talk about cases.
00:48:41.180So that person could do something stupid.
00:48:43.560And Nicholson, of course, would be alerted to do something wrong here.
00:48:47.940Basically, you have a one-strike scenario.
00:48:50.500If you mess up or you give away something, you could derail the entire investigation.
00:48:57.240I was brought in as an undercover guy to work against Jim Nicholson.
00:49:09.460My job was to catch him doing an espionage act that would directly tie him to the Russians.
00:49:18.560So in the spring of 1996, I started as Nicholson's deputy in the counterterrorism center.
00:49:25.200At that time, radical Islamic terrorism was on the rise.
00:49:30.400So there was a lot of real work stuff going on that you had to focus on.
00:49:34.180They were looking at critical players who eventually became known post-9-11.
00:49:39.180So it was very critical stuff that they were doing.
00:49:41.740In the middle of all that, you're trying to catch your boss compiling information that he's going to give to the Russians.
00:49:49.720To have someone, a human source, in touch with him every day, it's invaluable.
00:49:55.200Getting to know him was part of the exercise.
00:49:57.120I spent a lot of time going to lunch with him, drinking beer with him.
00:50:01.760My goal with the investigation was to immerse myself in him.
00:50:08.320But it was mentally draining every day because I describe him as a flawed personality, a flawed man.
00:50:15.280Over time, that became very apparent that he had a special view of himself, a ruthless, narcissistic guy who didn't care about anybody.
00:50:25.000Jim Nicholson is the most formidable opponent you could possibly go up against as a counterespionage agent because he's so well trained in the craft.
00:50:41.800And McGuire provided personality assessment back to the FBI.
00:50:49.500And even with John, as close as John was to him, it still wasn't giving us the exact intel and insights as to what is he doing minute by minute, second by second.
00:50:59.620And that's one of the reasons why we eventually knew he had to get a fiber optic camera in his office.
00:51:04.660You know, you see those those tile ceilings with the thousands of little pinholes in them.
00:51:09.440It was no bigger than just one of those little pinholes.
00:51:11.540And this is pretty impressive, guys, because this is the mid 90s when you're getting this type of technology.
01:01:47.520That's the last time I've ever laid eyes on the guy.
01:01:50.540Jim Nicholson was mad as hell because that dude put him away.
01:01:53.340Jim Nicholson reached a plea agreement and was sentenced to 23 years.
01:01:57.600And at his request, he was transferred to a prison in Oregon so that he.
01:02:01.900Now, I know you guys are probably wondering, yo, why do you only get 23 years?
01:02:04.320The reason why, guys, is because he probably gave a whole bunch of cooperation and identified other people involved in this conspiracy as well.
01:02:13.960So for him to get only 23 years for a crime like this tells me he provided a significant amount of information and he cooperated.
01:02:20.140I know for a fact that he took a polygraph.
01:02:22.200He had been debriefed several times, et cetera.
01:02:24.740So that's the only reason why he got such a polite sentence for such a serious crime.
01:02:28.520In contrast to Robert Hansen, who's doing life in prison right now for a very similar charge.
01:02:33.520He can be close to his children and his family.
01:03:34.820I don't pay for it until he draws his last breath.
01:03:37.600In the summer of 2007, I got called down to the special agent in charge's office out of the blue and asked if I was interested in working on a very important...
01:04:15.080But when you're the regular, like when you're just the title of special agent, you're the one that actually carries cases, which would make sense that they want to bring him to actually be the investigator and lead case agent in the situation versus the supervisor overseeing it.
01:04:26.460Like the other two guys that we saw in the documentary.
01:04:30.280Say yes before we'll tell you what it is that you're going to be working on.
01:04:34.300I was called into my supervisor's office in Eugene, Oregon, and he told me that this sensitive case had come up and he said he wanted me to close or...
01:04:43.240This guy right here more than likely was...
01:04:44.880Because he's also an FBI special agent and you guys can see from the title.
01:04:47.540He was more than likely the co-case agent on this with that other guy that we saw.
01:04:52.160When you got big cases like this, guys, you typically need two to three agents.
01:04:56.000And a case agent is the person that's responsible for getting the reports ready, bringing it and making it, preparing the case for prosecution and trial, get the use of everything they need, debrief informants, interview suspects, etc.
01:05:08.740So something of this magnitude more than likely would need two guys.
01:09:24.920You know, I mean, again, I don't think Jim would make a father of the year, you know, far from it.
01:09:31.620We were eager to start monitoring Nathan's telephone calls.
01:09:39.900His travel in his car, all the kinds of ways that he might communicate with the Russians to find out what was it that he could be giving them that might be of value.
01:09:51.660We were able to monitor his computer use, and we were able to get a GPS on his car.
01:10:00.220The GPS was put on the 5th of December, which was a Friday.
01:10:04.900And back then, guys, if I'm not mistaken, they didn't need a warrant to put a GPS or a tracker on your car.
01:10:11.020I'm going to actually look this up, and it was the FBI that fucked this one up.
01:10:13.760Now, if the feds want to put a tracker on your car, you need a search warrant.
01:10:16.780This case actually might be the reason why it got messed up.
01:10:19.320I'm going to look it up for y'all real fast, but let's keep going.
01:10:22.720But it was not until the following Monday when they went to test the GPS for the first time.
01:10:26.300It worked perfectly, but the problem was the car was at Portland International Airport.
01:10:33.660That was a surprise, not a pleasant surprise.
01:10:36.300We found out he had flown out at Portland International to leave a crew.
01:10:39.900So immediately, we assumed that he was going to Peru to meet with the Russians.
01:10:45.900We figured out what his itinerary was in terms of when he would be returning.
01:10:50.180The decision was made to intercept him when he came back into the country.
01:10:56.300And to intercept him when he comes back into the country, you've got to go through customs.
01:11:18.400Ruling that installing GPS tracking device on a vehicle and using the device to monitor the vehicle's movements.
01:11:22.680It constitutes a search under the Fourth Amendment.
01:11:24.000And so basically, guys, prior to 2012, you'd be able to just throw a tracker on any car, no need for a warrant, et cetera.
01:11:30.300And I remember when I was an intern back in 2010, even at Homeland Security, they were doing that all day.
01:11:35.640But it was when the FBI did it and kind of got jammed up with Jones that this Supreme Court filing was filed where it constitutes a search.
01:11:44.200And you can no longer just throw a GPS on a car.
01:12:35.240But it's got to be HSI running the situation when the FBI shows up at the airport because HSI are actually special agents and investigators as well.
01:12:41.780So CBP can do anything without the HSI being there.
01:12:44.720So I know for a fact that when this guy came back into the country, they had to have had an HSI agent there present to facilitate this dump or whatever you guys are about to see here going on.
01:12:54.200Because the FBI, contrary to popular belief, does not have customs authority like HSI does or CBP, which allows you to search someone when they come back into the country without a warrant, which is a very powerful tool that only HSI agents have when it comes to special agents.
01:13:10.040Obviously, CBP officers have it as well, but they're not investigators, so it's got to be HSI to do it.
01:13:14.720This backpack, and we were able to search that.
01:13:18.000So while customs agents were interviewing Nathan about the purpose of it.
01:13:21.960Think of CBP, a.k.a. Customs and Border Protection.
01:13:25.340Think of them as the police department and HSI as the detectives, right?
01:13:48.540And the reason why they had customs officials interviewing him was so that it could look like a routine interview.
01:13:52.840Hey, what's your reason for traveling, etc.
01:13:57.040Kind of keep them calm while the bureau agents, along probably an HSI agent, help them search his stuff and get them whatever they need.
01:14:05.160Because HSI can also search your phone at the border as well, which is a powerful authority that FBI can't do either.
01:14:10.740So being able to search someone's phone at the border is even bigger.
01:14:13.360A number of very incriminating items that really broke the case wide open.
01:14:21.100They found some money that he brought back.
01:14:23.940I think it was over $7,000 or $8,000 on him.
01:14:28.940And they found a notebook that had a lot of...
01:14:32.220And that's a very common tactic, guys, with criminals, where they'll come in with under $10,000 so they don't have to report it to customs, which, you know, takes the spot, keeps them out of the spotlight.
01:14:40.960And because whenever you come in with $10,000 or more, you know, or for the matter of fact, you do any transaction in the United States that's over $10,000 or more, you have to file something called a currency transaction report, which is filed with the IRS.
01:14:58.760The notebook was pretty much the jackpot.
01:15:02.160It confirmed he had addresses of the Russian embassy in Mexico City.
01:15:05.800He had the address for the Russian embassy in Lima, Peru.
01:15:08.220The Russians were always very interested in trying to find out how Jim Nicholson got caught first go-around.
01:15:18.220Just like any spy agency, they're concerned with moles in their midst.
01:15:24.700The notebook confirmed that Jim used his son Nathan as a courier.
01:15:28.360You know, the courier messages from Jim in prison and then courier questions back from the Russians through Nathan back to him in prison, for which they received compensation.
01:15:38.220And in the notebook, we found information about this Mexican Yahoo account with a password in it.
01:15:44.180And in order to use code words in their communication, his father would be Eugene.
01:15:48.540He was Dick and the Russians were Nancy.
01:15:50.160This little notebook had a treasure trove of information in it that then allowed us to pretty much predict what was going to happen from that point forward.
01:16:00.780I think Nathan wanted to do such a good job and make sure he didn't make any mistakes and forget anything that he kept detailed notes.
01:16:09.660For obvious reasons, he didn't train like his dad.
01:16:17.400After this all happened, they let him go on his way and went home.
01:16:22.140We had discussions back at headquarters as to where we wanted to go with this case.
01:16:33.660The evidence we got from the custom search in Houston was very suspicious, but in and of itself, you know, it was still circumstantial.
01:16:40.540So a decision was made at that point that we were going to let this play out because we needed to develop additional information to solidly make.
01:16:49.880Translation, the AUSA said, I need more.
01:16:53.360I'm not indicted in this thing until I feel that we're going to win this thing in trial.
01:16:56.620And this is one of the biggest differences between the feds and the state.
01:16:59.980The feds, the AUSA, Assistant United States Attorney, or Assistant United States Attorney, isn't going to prosecute a case unless they feel like they have like a 100% chance of winning.
01:17:25.420AUSAs aren't even going to indict until they're ready for trial.
01:17:28.820Whereas you go to the state system with ADA, his assistant district attorneys, they'll go ahead and charge you on anything and try to figure out the trial later.
01:17:36.520And you guys can see a perfect example of this with the Tory Lanez case where they're trying to introduce evidence, you know, after the fact or whatever.
01:17:42.020Feds don't make rookie mistakes like that because they have the privilege of not having to worry about taking every single case.
01:17:47.940So any case that does come to them typically is going to be serious, typically is going to be higher profile, and they're going to have that thing ready to go to trial by the time it's indicted.
01:17:55.880That's one of the biggest differences between the feds and the state.
01:18:02.140In October 2008, Nathan logged on to the Yahoo Mexican account using the password, and he'd left a message using the codenames to confirm another meeting with the Russians for a December 10th meeting in Nicholasia, Cyprus.
01:18:21.040It was like, Ola, Nancy, it's good to hear from you.
01:18:36.760Prior to his trip to Cyprus, Nathan received a letter from his father, which, when I saw it, immediately jumped out at me as something that could not have been designed for Nathan's viewing, but had to have been for the Russians.
01:18:56.040It was all sorts of information about Jim and his children.
01:19:00.080All right, let's go ahead and read this letter out loud, guys.
01:19:07.420Which, when I saw it, immediately jumped out at me.
01:19:10.440All right, so it reads, Dear, um, oops, sorry, guys, hold on.
01:19:18.860I want to thank you for your very moving letter to, of 10 August.
01:19:22.380I want to also tell you that the qualities you said you had received from me, respect for others, discipline, endurance, faith, patience, love, and sheer willpower are very much qualities that apply to you, whether you receive them via me or, uh, I don't know what that end means.
01:24:38.240But he didn't actually get arrested until a couple weeks later.
01:24:41.460We wanted to see what he might say post-interview while we still had electronic coverage of him.
01:24:48.080You know, his conversation with other people showing guilty knowledge.
01:24:51.640So, this is actually really smart that they're doing this because what that allows them to do is when they listen to the phone calls, this is what you call tickling the wire.
01:24:59.500And what this basically entails is anytime you take like an investigative step in your investigation where like there's some kind of overt law enforcement presence, a lot of times phone calls are going to be made right after or, you know, a day or two after, maybe minutes after where they talk about their experience to someone that they trust.
01:25:16.700And if you have the right phones tapped, right, you can go ahead and listen to it, which will give you even more evidence to show that they're culpable.
01:25:24.020So, this was actually very smart that they kind of let him stew for a bit and monitor the phones, monitor the pen registers, monitor the phone logs, and go from there and see if they can identify other potential conspirators.
01:25:34.420And one of the conversations we overheard is after he was interviewed by the FBI was with his sister, Star.