EUGENE, Ore. -- Pete Seda, the co-founder of the al Haramain Islamic Foundation (AHF) has a "dark side," prosecutors say. One that was "insistent on helping the cause of the mujahideen covertly, secretly, and without leaving a paper trail."
Seda, also known as Pirouz Sedaghaty, went on trial here Monday, accused of helping funnel hundreds of thousands of dollars to Islamic terrorists in Chechnya.
Seda is charged with conspiring to move $150,000 out of the United States without declaring it as required, and with filing false tax returns to hide the fact that the money ever existed. The case, which began over a decade ago, has already seen the dismissal of the organization on a technicality, and the continuing failure of the government of Saudi Arabia to extradite Seda's co-conspirator, Soliman al-Buthe.
AHF, headquartered in Riyadh, Saudi Arabia, has operated in more than 50 countries with the stated purpose of distributing Islamic aid and educational material. In 1997, Seda and Soliman al-Buthe founded a U.S. branch in Ashland, Oregon. According to its corporate records:
"al Haramain Islamic Foundation, Inc. stands against terrorism, injustice, or subversive activities in any form and shall not support any statement or acts of terrorism. Al Haramain Islamic Foundation, Inc. believes such conduct is contrary to Islamic principles."
Multiple investigations by the United States government revealed a much more sinister organization passing itself off as a charitable foundation.
According to the 9/11 Commission Report, al Haramain "exists to promote Wahhabi Islam by funding religious education, mosques, and humanitarian projects around the world."
The United States Department of the Treasury designated the U.S. branch on September 9, 2004 for its role in funding terrorist organizations. In explaining the move, Stuart Levey, Treasury's Under Secretary for Terrorism and Financial Intelligence explained:
"we continue to use all relevant powers of the U.S. government to pursue and identify the channels of terrorist financing, such as corrupted charities, at home and abroad. Al Haramain has been used around the world to underwrite terror, therefore we have taken this action to excommunicate these two branches and Suliman al-Buthe from the worldwide financial community."
The U.S. government later took the further step of designating the entire organization and all of its chapters on June 19, 2008.
After years of investigations, al Haramain and two of its directors, Seda and al-Buthe, were charged in 2005 with conspiracy, tax fraud, and failing to report on taking at least $150,000 out of the country. While al-Buthe remains on the lam in Saudi Arabia, Seda returned to the U.S. to face the charges.
The indictment alleges that in February 2000, Mahmouda el-Fiki donated $150,000 to al Haramain, "as Zakat (charity) in order to participate in your noble support of our Muslim brothers in Chychnia." Once the money had been deposited into an account in Ashland, Oregon, Seda and al-Buthi reportedly converted it to travelers checks and a cashiers check and then removed it from the United States. As a detailed report from the IRS later showed, those funds were deposited into al-Rajhi Bank in Saudi Arabia.
Prosecutors say Seda then filed a phony tax return showing that a portion of the money went toward the purchase of a prayer house in Missouri and the remainder was retuned to the donor.
Although prosecutors will not present evidence that the funds ultimately wound up in the hands of terrorists, they say they will show that Seda and al-Buthe intended the money to go to Chechen rebels. As Assistant U.S. Attorney Chris Cardani told jurors Monday:
"We will show that al Haramain subscribed to a very violent form of Islam. [AHF] supported jihad. Aggressive 'kill people' jihad."
The issue ultimately will be whether Seda tried to hide al Haramain's attempt to fund the mujahideen in Chechnya and whether he later attempted to cover it up by signing an IRS return that he knew to be false.
The defense presented a picture of a man interested in "peace and interfaith harmony." They do not deny that money was taken out of the country by al-Buthi, but say that the failure to report it was an innocent oversight, rather than an attempt to surreptitiously move money to terrorists. In fact, they say, the money was always intended for Chechen refugees, not militants. As to the allegation Seda falsified tax returns, defense attorneys will argue that any mistakes that exist were the result of sloppy accounting, and not intentional misrepresentations by Seda and the organization.
The trial continues Tuesday when the government calls its first witness.