Date Posted: Thursday, August 21, 2003

Affidavit Alleges Role of Northern Va. Groups

By Douglas Farah

Washington Post

August 20, 2003

Islamic charities based in Northern Virginia and sponsored by the government of Saudi Arabia invested millions of dollars in a company suspected of funding al Qaeda and the Islamic Resistance Movement, the government alleged for the first time yesterday.

An affidavit made public in federal court in Virginia contends that the Muslim charities gave $3.7 million to BMI Inc., a private Islamic investment company in New Jersey that may have passed the money to terrorist groups. The money was part of a $10 million endowment from unnamed donors in Jiddah, Saudi Arabia, according to the affidavit filed by David Kane of the Bureau of Immigration and Customs Enforcement.

"My investigation demonstrates that BMI and its affiliates may have transferred funds to or for terrorists," Kane said. "I am aware that BMI made or conducted financial transactions with persons" who were designated terrorists by the United States and the United Nations, Kane said in the affidavit.

The government has been investigating for several years allegations of money laundering, tax evasion and other financial improprieties against the cluster of Herndon-based organizations. But yesterday was the first time any government agency publicly tied the investigations to support of terrorists.

In March 2002, federal agents raided about 100 companies operating in a single office at 555 Grove St. in Herndon and took hundreds of boxes of documents. No charges have been brought so far against any companies or individuals as a result of that action and the ensuing investigation.

The sprawling probe, active on four continents, is the largest current U.S. investigation into terrorist financing, U.S. officials said.

The charges come as relations between the United States and Saudi Arabia continue to fray over public accusations that the Saudi government is not doing enough to crack down on suspected terrorist financiers. A recent congressional report on the Sept. 11, 2001, attacks includes a section, most of which is still classified, that reportedly describes the role of the Saudi government in financing terrorists. Top Saudi officials have demanded that the 28-page portion be made public so they can rebut the charges.

In recent weeks, Saudi officials also have said repeatedly that the government cannot be held responsible for the operations of far-flung Saudi charities. Saudi officials have contended that much of the money for the charities came from wealthy individuals and contributions made through mosques, not solely from the government.

Kane's affidavit was filed in support of the detention of Soliman S. Biheiri, who was indicted two weeks ago on charges of making false statements to obtain U.S. residency and other immigration charges. Before that, he was secretly held for more than a month as a material witness in the Justice Department's investigation of terrorist financing, according to knowledgeable sources.

Biheiri's lawyer did not return telephone calls seeking comment, but a government official and a friend of Biheiri's said the questioning of him centered on his knowledge of Muslim charities in the United States, including some in the Herndon group, most of which were affiliated under a now-defunct organization known as the SAAR Foundation.

"It was a fishing expedition where they asked him all kinds of disparate questions," one associate said.

Biheiri founded BMI Inc., an investment firm that adhered to Islamic principles, in Secaucus, N.J., in 1986. One of BMI's chief investors was Saudi businessman Yasin Qadi, who the United States and United Nations named a "specially designated global terrorist" in October 2001 for his alleged support of both al Qaeda and the Islamic Resistance Movement, or Hamas. Another major BMI investor, according to court documents, was Hamas leader Mousa Abu Marzook.

Qadi has repeatedly denied supporting terrorism.

The affidavit also alleges that Biheiri and BMI did business with other designated terrorist financiers, and that Biheiri's laptop computer contained contact information for two other men designated by the United States and the United Nations as terrorists -- Ghaleb Himmat and Youssef Nada, members of the extremist Muslim Brotherhood.

Himmat and Nada have denied funding terrorism but have repeatedly declined to comment on the U.S. investigation.

In the affidavit, government investigators allege that BMI attracted millions of dollars in investment capital from the Virginia-based charities, which are largely funded by the Saudi government and wealthy Saudi businessmen. However, it is unclear in the affidavit whether the $3.7 million invested by the charities in BMI came from the Saudi government or from individuals in the desert kingdom.

In early 1991, the International Islamic Relief Organization (IIRO), one of the largest Saudi-sponsored charities in the world, opened a U.S. branch, which was based first in Washington and then in Northern Virginia. The IIRO is part of a huge Saudi-sponsored charitable and religious organization called the Muslim World League.

Shortly after opening its office, the IIRO, which operates in the United States under the name of the International Relief Organization (IRO), received $10 million from Saudi Arabia, according to the affidavit. The money was used to set up yet another company, Sana-Bell, Inc., which was responsible for investing the money. The return on the investment was to be used to fund IRO's charitable activities. Sana-Bell's office was also in the Herndon complex.

From 1992 to 1998, the affidavit said, Sana-Bell gave $3.7 million to BMI.

But by the late 1990s, the Sana-Bell money invested with BMI had disappeared. Sana-Bell sued BMI over the missing money, a move that Kane questioned in the affidavit.

In his affidavit, Kane noted that Sana-Bell was awarded a $2.3 million judgment against BMI, but never collected the money, and "the disposition of Sana-Bell's investment in BMI was never disclosed."

http://www.washingtonpost.com/wp-dyn/articles/A17354-2003Aug19.html