New York City-Based 'charity' Eyed in Terror Money Probe

AP ^ | 2-26-04

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New York City-Based 'charity' Eyed in Terror Money Probe

Feb. 26, 2004

By Tom Hays / Associated Press Writer

NEW YORK (AP) - When Sheik Abdullah Satar visited mosques in Brooklyn and Manhattan in the waning days of 1999, the FBI was watching. An outspoken cleric and political figure in Yemen, Satar was put under 24-hour surveillance amid fears about possible terrorist attacks on New Year's Eve.

The sheik was never arrested or charged with a crime. But five years later, his name has resurfaced in an investigation of the Brooklyn branch of an obscure charity - its address a coin-operated laundry - that authorities have linked to terrorism.

Both the FBI surveillance of Satar and suspicions about the Yemen-based Charitable Society for Social Welfare were made public for the first time last week at the federal trial of Numan Maflahi.

Maflahi, 31, who was a director of the charity's Brooklyn branch, was convicted of obstructing an FBI probe by lying about fund-raising with Satar during the sheik's 1999 visit. He faces up to five years in prison at sentencing on May 26.

While investigating Yemeni suspects in New York, an FBI counterterrorism team became convinced that the charity was a "front organization to funnel money to terrorists," FBI agent Brian Murphy testified at Maflahi's trial.

Satar, in a statement, insisted he and Maflahi did nothing wrong. And the former head of another group also called Charitable Society for Social Welfare, based in the Midwest, said that the now-defunct operation was legitimate, and had no connection to the New York operation.

The Brooklyn case stemmed from a broader crackdown on informal money-transferring operations known as "hawalas." U.S. authorities allege the system is used by terrorists to secretly launder and transfer millions of dollars, including money siphoned from Islamic charities.

Since the Sept. 11, 2001, attacks, the Treasury Department has used provisions of the USA Patriot Act to freeze the assets and revoke the nonprofit status of several Middle East-based charities with branches in the United States, citing alleged ties to terrorists.

At the trial ending last week, prosecutor Kelly Moore alleged Maflahi escorted Satar in 1999 as he solicited donations for the charity at New York City mosques. Investigators believe the sheik had a history of smuggling cash out of the country, using his diplomatic passport to ward off searches.

Once Satar left New York, he further fueled suspicions by going to Milan and allegedly meeting with a top al-Qaida operative, El Sayed Abdelkader Mahmoud. A Milan court convicted Mahmoud in absentia last month of criminal association; investigators believe he may have died while fighting in Afghanistan.

Satar declined a request by The Associated Press in Yemen for an interview, instead issuing a written statement denying that he or Maflahi collected donations during the 1999 visit. He said the defendant served as his "secretary" on a speaking tour of mosques.

"This is strange to be tried for telling the truth, for not giving American intelligence agents what they want," he said of the case.

Maflahi's attorney, Hassen Ibn Abdellah, noted that the Treasury Department had not designated the charity as a source of terror money. The charity, he told jurors, "is still a legal organization not only in New York, but in Yemen."

Though the charity is still listed as an "active" nonprofit by the state, the official mailing address is a coin-operated laundry, currently closed for renovations. The attorney general's office, which regulates nonprofits, has no record of the group.

Incorporation papers state the charity planned to support "single mothers and their children in Kings County." Yet, prosecutors said, about $20,000 worth of personal checks written in 2000 and 2001 by the defendant and another director went straight to Yemen - not local causes.

The former president and treasurer of a Midwest group also called Charitable Society for Social Welfare said his charity - formed in the mid-1990s to help victims of civil war in Yemen - was "legal and authentic." It has since disbanded, added the former officer, Mohamed Hilali.

Asked about Maflahi and Brooklyn's same-named charity, Hilali said, "I've never heard of them."