Blood Money

julia.reischel@exhibitAnews.com

Seventy-seven years ago, the feds turned to tax law to help them finally nab Chicago gangster Al Capone.

Today, in the wake of 9/11, they’re employing the same strategy to nail suspected terrorism financiers.

And Emadeddin Z. Muntasser, the owner of Massachusetts-based Logan Furniture, is their test case.

Muntasser’s nightmare began when he signed an IRS application in 1993 seeking tax exemption for a charity he had founded. Little did he know that his signature would be used one day to persuade a jury that he is a terrorist.

And yet that is precisely what happened recently when Muntasser became the first person to be nabbed under a new federal initiative that relies on tax law to prosecute U.S.-based Muslim charities suspected of financing terrorism abroad.

Claiming that Muntasser and two other officials of the now-defunct Boston-based Care International omitted information on the charity’s tax forms, prosecutors charged the men with a slate of tax-related crimes, including filing a false tax return, making false statements, and engaging in a “scheme to conceal material facts” and a “conspiracy to defraud the United States.” It is believed to be the first time that a tax technicality has been the basis of a terror case.

On Jan. 11, a jury in the Moakley U.S. Courthouse in Boston found Muntasser, Samir Al-Monla and Muhamed Mubayyid guilty of conspiracy against the IRS.

The three men who raised $1.7 million for charity now face a decade in prison and hundreds of thousands of dollars in fines.

Care International

In 1993, Libyan citizen Emadeddin Muntasser, a graduate of Worcester Polytechnic Institute who owns the local chain of Logan Furniture stores, founded Care International and requested that the IRS give it charitable tax-exempt status so that it could accept tax-free donations.

The purpose of Care, Muntasser wrote in the charity’s articles of incorporation, was to “provide assistance to victims of natural and man-made disasters ... primarily in Bosnia and later in African countries” and to develop an “orphan sponsorship” program.

The IRS granted Care its tax-exemption request, and over the next 10 years the organization raised more than $1.7 million, much of it donated by Muslims as “zakat” — a yearly religious charitable contribution.

When Muntasser left his position as Care’s president in 1996, Samir Al-Monla, a U.S. citizen, succeeded him. Muhamed Mubayyid, a Lebanese citizen who worked at a software company, served as Care’s treasurer from 1997 to 2003.

During the decade of its tax-exempt status, some of Care’s money was distributed to charities in countries such as Haiti. (“Mr. Muntasser provided school supplies to the needy children & their families,” wrote local Haitian community leader and pirate radio operator Sylvane Simone on behalf of Muntasser in 2005.)

Care also openly solicited donations for “mujahideen” who were engaged in “jihad” — terms that, in the 1990s, were associated with guerilla freedom fighters who were battling the Soviets in Afghanistan.

The charity received checks that had “jihad” and “Bosnia mujahideen” written in the memo lines, and from 1993 to 1995 it sent $167,000 to a group in Bosnia called the “Human Services Office” or “Services Office,” which may have been associated with such mujahideen, prosecutors said.

During his tenure as president of Care, Muntasser traveled to countries around the world, including Pakistan and Afghanistan, where he met with Gulbuddin Hekmatyar, an Afghan warlord and proponent of jihad.

Before founding Care, Muntasser had been involved with another organization, the Boston branch of a group called the Al-Kifah Refugee Center. Now defunct, Al-Kifah was a Brooklyn, N.Y., charity that was widely believed to be part of a worldwide network of groups founded by a mentor of Osama bin Laden in the 1980s in Pakistan to support mujahideen. The network had been linked to the 1993 bombing of the World Trade Center, in which more than 1,000 people were injured and six were killed.

Perhaps because of that connection, by 1994 the FBI was monitoring Care and its officers.

According to the Worcester Telegram and Gazette, several wiretaps recorded conversations between Care officials and Adham Hassoun and Kifah Jayoussi, two men who were both convicted of terrorism-related charges in Florida last year along with Jose Padilla, a U.S. citizen who was accused of attending a jihad training camp in Afghanistan.

The Care officials seemed to know they were being watched: In a 1996 conversation, Al-Monla ended a recorded call by saying: “We don’t want to keep you, otherwise they would have to flip the tape over.”

In another call, taped in 1998, Jayoussi asked Al-Monla for money on behalf of the wife of Mahmud Abouhalima, who was in jail for his role in the 1993 World Trade Center attack. In response, Al-Monla gave the government a solid piece of evidence that he was willing to misuse his charity’s funds: He offered to send money but advised Jayoussi to request “help [for] a family or some poor people or something like that” in order to do so.

The heat was on

Fudging the books to give a widow money is not directly funding terrorism, and the U.S. government did not indict Care or its officers in the 1990s.

Even after the Sept. 11 attacks on the World Trade Center, the feds did not immediately stop Care’s activities. It did step up its investigations, however: Soon after the attacks, agents from the Joint Terrorism Task Force of the FBI raided a Care storage facility and surreptitiously copied boxes of documents.

Around the same time, Ptech Inc, the Quincy software firm where Care treasurer Mubayyid worked, became the subject of an FBI terrorism investigation, although it was never charged with a crime.

The most profound effect of Sept. 11, 2001, on Muslim charities was that groups that funded the mujahideen in Afghanistan and Bosnia — a cause that had had the support of an array of U.S.-government-sponsored charities throughout the 1980s and 1990s — suddenly were considered terrorist organizations.

In an executive order signed by President Bush on Sept. 23, 2001, the Al-Kifah Refugee Center was designated a terrorist group and a “pre-cursor” to Al-Qaeda.

Despite the years of surveillance, Care International escaped such a designation, and it continued to operate until 2003.

Oddly, what finally prompted prosecutors to seek an indictment against Care was a lawsuit that Muntasser filed in 2004 against the government, which had stalled on his application for U.S. citizenship.

On May 11, 2005, the day before Muntasser’s citizenship hearing, the government unveiled its tax charges against Muntasser and Mubayyid. (Al-Monla was added to the case in 2007.)

The next day, Muntasser and Mubayyid were arrested.

'Economic jihad'

After his arrest, Muntasser hired a team of top-notch legal advisers — including liberal political pundit Susan Estrich and civil liberties champion Harvey A. Silverglate of Boston — to defend him on grounds of free speech, freedom of religion and civil liberties.

None of the lawyers involved in the trial would speak to Exhibit A about the case because of unfinished post-trial motions, but for two years they skirmished over the government’s decision to seal evidence and over the wiretaps, which were part of the National Security Agency’s infamous secret “warrantless wiretap” program.

In 2006, Muntasser’s defense lawyers asked U.S. District Court Judge F. Dennis Saylor IV to dismiss the case in a 49-page document that called the charges “a prime example of the tendency of the government, in the wake of the terrorist attacks of September 11, 2001, to re-write … the positions, roles, and activities undertaken and supported by the United States government itself[.]”

Saylor dismissed the defense’s arguments regarding free speech and freedom of religion, ruling that the case was about whether Care International and its officers had deceived the IRS, not about their right to express their religion and ideas.

“Defendants are not being prosecuted for engaging in those activities; they are being prosecuted for concealing those activities,” Saylor stated in his written opinion.

The judge allowed the case to proceed to trial, with the understanding that prosecutors and defense attorneys alike would treat it as a tax case.

Toward that end, Saylor banned from the courtroom any mention of the attacks on the World Trade Center, Sept. 11 or Osama bin Laden.

But as soon as the trial began in November 2007, it became clear that keeping the subject of terrorism out of the proceedings would be virtually impossible. On the first day, jurors were grilled about their attitudes toward Muslims, wiretaps and Afghanistan.

“Some people may have strong feelings about Muslims or Arabs,” Saylor told the potential jurors, before asking them to raise their hands if they did.

Over six weeks, prosecutors bolstered the dry material of the tax case by playing wiretaps, introducing expert “terrorism” witnesses and presenting documents that included sensational terrorist imagery. Among them was an e-mail that Care received in 1998 from Azzan Publications, a Muslim publishing company, urging it to donate money to “mujahideen fighting groups.”

One day, prosecutors read aloud stories from Al-Hussam, Care’s official newsletter, which contained passages praising 1980s mujahideen for fighting the Soviets with “mountains of martyrs” and “seas of blood.” (Saylor frequently interrupted the reading with warnings to jurors that the inflammatory rhetoric should not bias them against the defendants.)

The prosecution also presented several expert witnesses who told the jury that American charities such as Care International have long funneled money to mujahideen in Bosnia and Pakistan and that Care’s activities fit a pattern of “economic jihad.”

‘Spooky’ religious views

Confronted with what they would later call “a drumbeat of consideration of terror and violence,” defense lawyers maintained that, at its heart, the case was about taxes, not terror. Although Muntasser, Mubayyid and Al-Monla might have had “spooky” religious views, argued their Boston lawyer, Norman S. Zalkind, their feelings about jihad were not relevant to the case.

In the last days of the trial, the case finally boiled down to one central issue: Had Care officials conspired against and defrauded the IRS by not telling it about its inflammatory newsletter, its links to Al-Kifah and its solicitations for mujahideen?

In trying to prove that the IRS would never have given Care tax-exempt status if it had known more about the group’s activities, the prosecution introduced retired IRS employees Robert J. Charnoff and Gerald V. Sack, who had handled the Care case, to testify that they, indeed, would have acted differently had they been properly informed.

But the defense team produced a trump card of its own: Charnoff’s and Sack’s boss at the time, Marcus S. Owens, who insisted under intense cross-examination that Care International did nothing wrong and that its activities were legitimately charitable.

In the end, the jury apparently did not find Owens persuasive. After seven days of deliberations and a two-week break over the Christmas holiday, jurors found Muntasser, Mubayyid and Al-Monla guilty of conspiring to defraud the United States and of scheming to conceal material facts from the IRS.

The prosecution claimed victory, saying the case had been about terrorism all along. Meanwhile, in the courtroom, Muntasser’s mother wept.

Although the tax-law strategy paid off in this case, it is unclear whether it will be an effective way to prosecute terrorism in the future. At the sentencing hearing after the ruling, in a courtroom filled with local Muslims expressing dismay and outrage at the conviction, Judge Saylor chastised the U.S. Department of Justice for bringing terrorism into the case, saying the verdict has a “greater-than-average” chance of being reversed.

Muntasser’s lawyers have already asked Saylor for a new trial because the jury, they claim, was prejudiced against the defendants.

And as it turns out, at least one member of the jury was thinking about terrorism during deliberations. According to the Boston Globe, juror Jean Ngarambe wrote Saylor a note saying that the case “occurred in a particular and exceptional period and circumstances: before and after 9/11/2001, which date was crucial and having an emotional impact on all society.” Ngarambe then asked whether he could let that emotional impact color his decision.

In the end, it appears that USA v. Muntasser, et al. was really a terrorism case after all. {EXA}