Jury selection begins for man accused of sending money to revolutionariesBy Jeff Barnard, AP
Monday, August 30, 2010
Trial begins in Islamic charity tax case
EUGENE, Ore. — The prosecution said Monday the founder of the U.S. branch of an Islamic charity accused of trying to smuggle $150,000 to Muslim fighters in Chechnya took extreme steps to leave no paper trail.
But the defense countered tax-form mistakes key to the prosecution’s case were made by the charity’s accountant, not the defendant.
Pete Seda, also known as Pirouz Sedaghaty, is in U.S. District Court on charges of conspiracy, tax fraud and failing to report sending $150,000 out of the country. He has pleaded not guilty, contending the money was for refugees, not Muslim fighters trying to overthrow the government of Chechnya.
Assistant U.S. Attorney Chris Cardani told jurors in opening statements that Seda, an Iranian immigrant and naturalized U.S. citizen, became the boss of the U.S. chapter of Al-Haramain Islamic Foundation Inc., a charity based in Saudi Arabia. Cardani said the foundation was based on a radical form of Islam that distributed Qurans calling for holy war, and was dedicated to helping Muslim fighters battling the Russian Army in Chechnya.
“One of the things you can’t do if you are a charity in the United States is fund acts of violence,” Cardani said. “The government is not accusing Mrs. Sedaghaty of being a terrorist.”
Defense attorney Larry Matasar said Seda’s father, an Iranian colonel, sent him to the United States in the 1970s when the Shah was deposed. There, Seda Americanized his name, started a business as a tree surgeon, married, raised two sons, and started his own charitable foundation distributing copies of the Quran to prison inmates.
A horse trainer friend who traveled to Saudi Arabia connected Seda to Soliman Al-Buthe, who as the head landscaper for the city of Riyadh, Saudi Arabia, also had an interest in trees, Matasar said.
Al-Haramain eventually supplied $188,000 to buy a prayer house in Ashland, where Seda lived and ran the foundation’s local branch.
“The evidence will not show Pete Seda was some kind of evil fundamentalist conspiring against the United States government to cheat on his taxes or fund mujahideen fighters in Chechnya,” Matasar said. “Simply what they have is a kind of guilt by association.”
The U.S. government declared Al-Haramain a terrorist organization, seizing and selling its assets, including the house in Ashland that served as U.S. headquarters for the charity and Seda’s home. The Saudi Arabian government dissolved the parent organization.
Cardani said when an Egyptian donor in London, Mahmoud El Fiki, wanted to send $150,000 to help Muslim fighters in Chechnya in March 2000, he wired it to the U.S. branch of Al-Haramain’s bank account in Oregon, Cardani said. Then Al-Buthe, the “money guy” for Al-Haramain, flew from Saudi Arabia to Oregon.
In Oregon, Seda helped Al-Buthe convert the money to $130,000 in traveler’s checks and a $21,000 cashier’s check, which Al-Buthe flew with to Riyadh and deposited in a bank.
Al-Buthe was indicted along with Seda, but cannot be extradited from Saudi Arabia.
If the money had been meant for peaceful purposes, it would have been far easier and less expensive to wire the money to Saudi Arabia, Cardani said. Instead, Seda and Al-Buthe went to the trouble of trying to obscure the paper trail.
Cardani said Seda took further steps to conceal the trail, lying to his accountant that the money was used to buy a prayer house in Missouri, and telling the accountant an inflated value for the house that was reported on a tax form.
Matasar said the Medford accountant Seda hired to keep Al-Haramain’s books, former Internal Revenue Service agent Tom Wilcox, made a series of errors in filing tax reports, including one with the inflated value of the Missouri prayer house.
The defense will offer evidence that Wilcox, not Seda, was responsible for that mistake, Matasar said.
Matasar added that while it is common for travelers to be given forms to declare cash they are bringing into the country, travelers leaving the country do not get such forms, and Al-Buthe may not have known he had to report the money he was carrying.
“They have to prove he knew he had to declare the money,” Matasar said.
Seda’s desire to help Muslims in Chechnya was driven by reading news accounts, and not by any doctrine from Al-Haramain, Matasar added.
Tags: Chechnya, Corporate Crime, Eastern Europe, Eugene, Europe, Home Buying, Middle East, North America, Oregon, Philanthropic Foundations, Philanthropy, Residential Real Estate, Riyadh, Russia, Saudi Arabia, Tax Evasion, United States