How 2-year sting brought down missile deal Prosecutors call case a terror plot. Others say it was just a bungled attempt to make some money
Sunday, April 04, 2004
BY JOHN P. MARTIN Star-Ledger Staff
Congratulations flowed after FBI agents burst into an airport hotel suite near Newark last August and arrested Hemant Lakhani, a British exporter, for trying to sell missiles to terrorists.
Attorney General John Ashcroft hailed the investigation as a victory against terrorism. U.S. Attorney Christopher Christie called the case "an incredible triumph."
President Bush told reporters, "The fact that we were able to sting this guy is a pretty good example of what we're doing in order to protect the American people."
The elaborate sting began when an FBI informant, who said he worked for Somali terrorists, asked Lakhani for missiles to use against U.S. jetliners. It ended nearly two years later after undercover Russian agents furnished Lakhani a fake missile and helped ship it across the ocean.
But a closer look at the case -- including a review of more than 100 conversations taped during the probe, interviews with legal and weapons experts, and an examination of court records and other documents -- casts doubt on just how significant the prosecution really is.
Instead, a portrait emerges of Lakhani as little more than a 68-year-old failed clothing merchant who, desperate for money and full of bluster, stumbled into a highly orchestrated sting at a time when the United States was eager for success against terrorism.
Consider:
a.. The informant who brought Lakhani into the sting, Mohammed Habib Rehman, is a small-time swindler who has left a trail of more than $200,000 in court judgments and unpaid debts while informing for the government. Rehman, who sometimes called himself Haji, continued to work for the FBI even after a former federal agent who had worked extensively with him warned the bureau that Rehman couldn't be trusted.
a.. Lakhani, described by Christie as "a significant international arms dealer" whose arrest spared lives, had brokered only one arms sale, the legal purchase of 11 armored personnel carriers by Angola. It took him two years to close that transaction.
a.. Despite 16 months of pleading from Rehman, most of which was recorded by agents, Lakhani failed to find anyone willing to sell him a missile. He was discouraged, nearly broke and ready to quit last spring when agents of the Russian Federal Security Service entered the case to complete the transaction.
a.. With the deal settled, Lakhani still bungled the delivery, inadvertently shipping the would-be weapon to Baltimore instead of its intended destination, Newark. Unbeknownst to Lakhani, government agents then escorted the missile to New Jersey.
Lakhani's attorney, Henry Klingeman, contends his client was the victim of entrapment, and that if a crime occurred, it was because of extraordinary steps by counterterrorism agents.
"The only terrorist attack prevented here was a fictional plot conceived by the government to entrap Mr. Lakhani," Klingeman wrote in motions submitted to the trial judge.
Christie, who with two assistants will prosecute the case later this month, has declined to discuss the details of the investigation. But in past public statements, he has countered that Lakhani was a willing and able participant in the deal, and that he knew his buyer wanted the weapons to attack the United States.
"This is not someone who was just a businessman looking to make a buck," Christie said after Lakhani's indictment on terrorism, weapons and money laundering charges in December.
"As we've investigated," he said then, "we've become convinced that this is also someone who, at least in some way, was a true believer in the cause that America should be attacked and that its citizens should be killed."
The evidence shows Lakhani's acquaintances included a notorious Indian ganglord wanted for a 1993 bombing in Mumbai, India. In phone calls to the informant, Rehman, Lakhani called the arms trade a "shady business" that required bribes. He sometimes used code words such as "porridge" and "shoe" to refer to the missile, and once told the informant, in an apparent reference to the Sept. 11, 2001, attacks, that Osama bin Laden "did a good thing."
Their conversations, translated by the FBI into English from Urdu and Hindi, also show Lakhani clearly understood his buyer wanted to launch a devastating attack on America.
"If 15 planes come down at the same time, they will be shaken," Lakhani told Rehman minutes before his arrest on Aug. 12, as agents recorded the meeting from an adjoining suite.
But prosecutors have acknowledged that Lakhani has no known criminal record or terrorist links. Experts who track the small arms market also say they had never heard of Lakhani. They say they doubt he was anything but an inexperienced opportunist.
"He was particularly clumsy," said Loretta Bondi, a scholar at Johns Hopkins University in Baltimore and a former U.N. consultant on international security and illegal arms.
Bondi said about 200 legal and illegal arms brokers dominate the trade worldwide, often with impunity, but Lakhani cannot be counted among them.
"There is a steady cast of characters," she said. "The real ones have ties to (government and military officials). That's what makes them kind of untouchable."
In letters and jailhouse interviews with The Star-Ledger, Lakhani did not deny trying to broker the missile deal. But, he said, he was pressed and coached by the informant nearly every step of the way.
"I am nothing, I am nothing," Lakhani said from the Passaic County Jail, where he has been held without bail since August. "I am zero."
TWO PATHS
He was less modest when he and Rehman looked over the missile in a Wyndham Newark Airport Hotel suite last summer. Rehman wanted 50 more. Lakhani suggested a coordinated attack across America.
"If it happens 10 or 15 places simultaneously, say Sunday morning at 10 o'clock ...," Lakhani said, according to a transcript of their recorded conversation.
Rehman interrupted, "You mean at different airports at the same time?"
"Yes, yes," Lakhani replied. "Nothing else. We just have to cause the explosion."
The meeting in the hotel room was the final act in a story that unfolded like a Cold War spy novel. Built by intelligence agencies on three continents, it included shadowy meetings in the United Arab Emirates and Moscow, a money trail from New York to London to Geneva, Switzerland, and the climactic rendezvous overlooking the runways of Newark Liberty International Airport.
The supporting cast was small but intriguing: a Manhattan jeweler, a fugitive terrorist from India, a London accountant and a band of Ukrainians who dabbled on the edges of the weapons black market. Linking them all was Lakhani, the squat, Indian-born merchant with dyed black hair who bounced from country to country chasing deals.
He and Rehman had been introduced nearly two years earlier but were separated by decades and diverse backgrounds.
Lakhani moved from India to London in 1958 and spent decades riding a roller coaster of business success and failure, primarily as a clothing manufacturer. His wife Kusum had won praise for her charity work in London's Indian community. Their only child, Sanjay, ran his own business in New York.
But the market for Lakhani's Indian-style women's blouses fizzled in the late 1980s. He declared bankruptcy and became a freelance middleman, negotiating deals for commodities ranging from oil to foodstuffs, and constantly shuttling between Europe and the Middle East.
One client was Ashwini Puri, an Indian entrepreneur who Lakhani says he had known for decades. Puri used Lakhani as a ground-level broker to handle the minutia of business negotiations.
Lakhani said his contacts, multilingual skills and willingness to travel made him a valuable asset. "I'm a great salesman," he said in a phone interview from jail. "I can find you anything you want. That's Lakhani."
Puri was a prominent banker in India, but his interests were diverse. One of his companies, Mohan International Ltd., touted in brochures that it "has been supplying defence equipment to the world's best armies for over 15 years."
Legal arms sales are typically multimillion-dollar transactions between nations or their sanctioned contractors. But those who monitor the arms trade say there are boundless opportunities for fringe players to profit at every step of the deal, from arranging the initial contacts to completing the delivery.
Experts say Puri was virtually unknown among arms traders, most likely a second-tier dealer who tried to make money reselling unused or older weapons to smaller nations or armies.
One such opportunity emerged in 1999.
After a 73-day border war with Pakistan, India announced plans to buy a weapons-locating radar. UkrSpetsExport, the state-run Ukrainian arms agency that had become a notable arms supplier after the breakup of the Soviet Union, was on the list of possible suppliers.
Puri dispatched Lakhani to the company's Kiev headquarters to offer their services lobbying the Indian government in the deal. The Ukrainians declined their help, Lakhani said, but his meeting led to more talks with UkrSpetsExport.
For several months, Lakhani and Puri tried to buy mortars, rockets and planes for the Sri Lankan army from the Ukrainians, according to faxes and handwritten notes that agents later found in Lakhani's home. That deal also failed.
The men eventually succeeded in brokering the legal sale of 11 armored personnel carriers from UkrSpetsExport to the Angolan government. Though a relatively minor arrangement, it stalled for almost two years and was completed last summer.
Lakhani expected to earn $55,000 for the transaction, but said Puri never paid him. Puri was murdered two months ago at an Angola hotel. Local press reports said $1 million in diamonds were missing from his room.
Lakhani insisted in prison interviews that the money was not important. He maintained he had profited handsomely brokering other deals, including rice and perfume.
But records show that financial success had become elusive for Lakhani. Last year, creditors threatened to foreclose on his $470,000 London house and auction his belongings because he failed to pay taxes.
In papers filed with court officials after his arrest, he described himself as a self-employed but retired consultant who earned $25,000 a year. He reported just one asset: a BMW car worth $5,000.
PAKISTAN TO AMERICA
Rehman promised Lakhani the missile deal would make them rich. "We won't have to worry about money," he said in one phone call.
Rehman, 43, has had his own financial troubles, according to public records and interviews with people who know him. Rehman did not respond to a request for an interview. Federal prosecutors have refused to discuss Rehman or identify him in court documents related to the Lakhani case.
Since arriving in the United States from Pakistan in 1996, he has lived with his family in at least four states, holding mostly low-wage jobs. His most consistent work has been as a paid informant for U.S. law enforcement.
Charles Lee, 59, a retired Drug Enforcement Administration agent, said he recruited Rehman as an informant around 1993, when Lee was assigned to the agency's office in Lahore, Pakistan. Rehman worked in a family textile company and had many contacts in the region.
In his first case, Rehman lured a fugitive drug trafficker into a trap set by U.S. agents, Lee said.
"He did it boldly," Lee recalled in an interview. "The DEA loved (Rehman) for producing this guy."
Rehman began to regularly help build cases. He developed a reputation for being fearless and could earn tens of thousands of dollars for a major prosecution. "We had a pretty good run with him," Lee said.
That run ended in 1996 when a suspected heroin smuggler discovered Rehman was a U.S. operative and dispatched someone to kill him, Lee said. Within hours, agents whisked Rehman and his family to the United States. They settled in New York and have since lived in several locations in the Midwest.
Lee returned to the United States in 1997 and retired two years later. In early 1999, he said, Rehman tracked him down. He was broke, his wife was ill and they were struggling to care for their five children. He had no green card, barely spoke English and couldn't find work.
As the agent who first recruited him, Lee said, he felt partly responsible for Rehman's fate. Rehman once had risked his life for the U.S. government, Lee said, but now had been abandoned. He agreed to help.
"We had been through a lot," he said. "I felt some allegiance."
Lee said he arranged a meeting between Rehman and FBI agents in Minneapolis in the spring of 1999 and encouraged the agents to use Rehman in terrorism investigations. Though they never discussed it, Lee said he assumed Rehman began working for the FBI.
That fall, Rehman proposed to Lee that they become partners in a venture importing and reselling basmati rice, a high-quality rice popular among Middle Eastern and African immigrants. Rehman promised he had the overseas contacts to get the rice, but he needed help distributing it. Lee said he initially resisted but then relented. He was looking for something to do in retirement, he said.
The partnership soured within months. Lee said Rehman sold the same shipment of rice to two different buyers and pocketed nearly $20,000. Lee said he settled the accounts but ended all contact with Rehman. Not long after, he began meeting or hearing about others who also lost money to Rehman, he said.
Court records show Rehman's debts had been building before his dealings with Lee. His landlord in Olathe, Kan., won more than $4,000 in judgments against him in 1998. A year later, a judge in Johnson County, Kan., issued a felony warrant for Rehman after he wrote a bad check for nearly $900.
In 2001, a Wisconsin bank won more than $6,000 in judgments against him when he defaulted on credit card loans. Since then, judges have entered an additional $120,000 in judgments against him stemming from bad rice deals arranged by Rehman and his importing company, House of Rice. None has been paid.
"Nobody could really run the guy down," Lee said. "He was like the wind."
In the summer of 2000, Lee said he urged FBI agents to stop using Rehman. He also gave the FBI a nine-page letter outlining his experience with Rehman and the allegations from others, including a Minneapolis grocer who claimed Rehman stole more than $58,000 from him.
The letter, a copy of which was obtained by The Star-Ledger, also said Rehman boasted of his ability to smuggle drugs from Pakistan and to arrange contract killings.
Lee said he felt responsible for recommending Rehman to the FBI and hoped the letter and phone calls would convince agents that Rehman couldn't be trusted. "My motive was solely to stop this guy," Lee said.
He said the FBI never called him.
Bureau officials declined to comment, according to Special Agent Sherri Evanina, a spokesperson for the FBI's Newark division.
VALUABLE ASSET
After the terror attacks, Rehman became such a valuable asset that FBI agents from Minneapolis and Newark were fighting to claim him as their own, according to one federal agent. Newark won, and he soon began work on the Lakhani case.
The use of informants is one of the oldest tools in law enforcement. Agents rely on their street contacts, cultural or ethnic backgrounds or criminal knowledge to help gather intelligence and identify or snare potential suspects. Many cooperate to win leniency after being caught in a crime. Others, such as Rehman, work solely for money.
In both cases, Justice Department guidelines require informants to be registered and subject to substantive background checks and an annual review. Sometimes, former and current law enforcement officials say, the agent and informant will sign a contract that outlines expectations and compensation.
Full-time paid informants such as Rehman can earn tens of thousands of dollars for a routine prosecution and hundreds of thousands of dollars for their work in a major case, agents say.
But the rules can be flexible, especially in terrorism and foreign intelligence cases.
"In the currency of cooperators in today's world, counterterrorism informants are the most valuable," said David Irwin, a former federal prosecutor.
Such arrangements have always been a sensitive issue within law enforcement agencies.
"It's kind of a balance," said Robert Bloom, author of the book "Ratting: The Use and Abuse of Informants in the American Criminal Justice System." "Everybody in the business knows you have to make deals with bad guys to catch bad guys."
In January 2001, after several scandals involving informants, Attorney General Janet Reno implemented new guidelines calling for more stringent vetting and monitoring of informants by Justice Department officials.
"The basic rule of thumb is that before you bring someone into the fold, you do a certain amount of due diligence," said Donald Stern, the former U.S. attorney for Massachusetts who helped draft the guidelines.
"The short answer is that informants are not necessarily good people," Stern said. "Sometimes you've got to hold your nose and do the best with what you have."
INTRODUCTIONS ARE MADE
What led Rehman to Lakhani is unclear. Agents didn't begin taping their phone calls until December 2001, but the transcripts suggest the men already knew each other.
Lakhani said his first conversation with Rehman occurred two months earlier in Dubai, the capital of the United Arab Emirates. It was arranged, he said, by Abdul Qayyum, a notorious Indian ganglord suspected in a series of 1993 bomb attacks in Mumbai.
Lakhani said he met Qayyum through a friend and that he and Qayyum often frequented the same Dubai hotel. He said he knew Qayyum's reputation, and that Qayyum knew he was an exporter and had tried to enter the arms trade. But Lakhani insists he did no business with Qayyum.
Weeks after the 9/11 attacks, Lakhani said, he traveled to Dubai to look for potential investors for a $250 million oil refinery project in India. While there, Lakhani said, Qayyum encouraged him to speak with a friend named "Haji" who had ties to wealthy Saudis.
Lakhani said he and his potential investor spoke briefly by phone and agreed to talk again. They did so in December and in the same conversation Rehman asked Lakhani about arms, according to a transcript. Soon afterward, Lakhani faxed Rehman weapons brochures.
FBI agents listened as the men met for the first time in New York in January 2002, according to transcripts. Each had a purpose: Lakhani mentioned the oil refinery; Rehman brought up weapons.
Rehman told Lakhani he represented the Ogaden Liberation Front, a rebel group seeking independence in a region between Somalia and Ethiopia. He said the rebels wanted weapons but could not get them legally.
It was the first and only time in the taped conversations that Rehman identified his employers by name. In later conversations, he told Lakhani he had met "the bearded guys in Afghanistan" and once made a reference to a group "known as al Qaeda or something like."
For his part, Lakhani never pressed Rehman or expressed any interest in knowing about the buyer or buyers during their many phone conversations.
In April 25, 2002, as FBI agents listened, the two men met again at the Wyndham hotel across from Newark Airport. This time, Rehman got more specific. He said his "brother" -- whom he called "a good Muslim with Muslim sentiments" -- wanted to buy a missile.
"What he needs right now is for the shoulder," he said.
Lakhani said he understood. He suggested a Russian-made Igla missile. "I can get that," he said.
Rehman said he wanted the missile delivered to New Jersey. He told Lakhani he would not have to worry about the getting the weapon past U.S. officials.
"You ship it from there and it will be our responsibility to send it forward," he said. "We have the sources."
He promised cash. "You know that this is not a legal business," he said. Lakhani's reply was unintelligible.
A day after their meeting, Rehman called Lakhani. "I trust you," he said. "I consider you like a brother. You are also my best friend."
PROMISES MADE
By May, the deal appeared to be taking shape. When Lakhani told Rehman that weapons suppliers would be reluctant to sell a single missile, Rehman promised his clients would buy 200. But first, he said, they wanted a sample. Just one.
Lakhani said the arrangements were nearly done.
"That is a wonderful thing," Rehman replied.
Lakhani did not tell Rehman, but he had no hope of buying the missile from UkrSpetsExport without an end-user certificate, a document issued by governments and required under international accords to prevent black market arms sales.
Instead, he approached a smaller, less established trading company, Laberia Corp., which was based in Cyprus but had offices in Ukraine.
As the weeks dragged on, Lakhani's inability to close the deal grew apparent. Rehman became openly frustrated. He told Lakhani he wanted the missiles for use on Sept. 11, 2002, the anniversary of the attacks.
"It is getting too late. We need it as soon as possible," he said in August. "Boss, please. It is very important."
Documents show that Lakhani was trying to fulfill the order. In late August, he received a fax from the director of Laberia Corp. outlining costs: $87,000 for a missile and $23,000 for a launcher.
But Lakhani warned Rehman that "everyone is afraid these days" and that his suppliers said they needed an end-user certificate, real or fake.
The anniversary arrived; the missile did not.
"Load the one item on the ship and then come," Rehman begged Lakhani that day. "Come next week. Please load it now."
The conversation repeated itself a half-dozen times in the ensuing weeks. Each time, Rehman pressed Lakhani to complete the delivery. Each time, Lakhani promised it was all but done.
In October, Laberia requested a $30,000 down payment for the weapon. At Lakhani's direction, Rehman paid through a hawala, a centuries-old system developed in India and used worldwide to transfer money.
Rehman gave the cash to Yehuda Abraham, a New York City jeweler, who in turn instructed an associate overseas to give money to Vijay Raja, an associate of Lakhani. Raja deposited the money in a Swiss account.
Still, there was no missile.
"You know, Mr. Lakhani, I am not doing it for fun's sake," Rehman said in November. "I know, I know," Lakhani replied. "It is not a nonserious matter. It is very dangerous also. It is not very easy, also."
For the first time, he voiced doubts. "Listen to me, this job is already costing me too much money," he said.
Lakhani professed to be negotiating deals for other commodities. He signed one contract with Laberia to buy metal plates for one of Puri's manufacturing plants. But Rehman was his only real weapons customer, he said. The market was difficult, he said.
"Boss, did you get any customers from that side?" Rehman asked him in one conversation. "These days, there are so many customers."
"It is not easy," Lakhani complained. "They have to know you before they deal with you. ... Let me know if you have any customers?"
PACKAGE READY
By the end of February 2003, Lakhani said he was prepared to walk away from the missile deal. Representatives from Laberia told him it would be too difficult to smuggle the weapon from Cyprus, he said in an interview. They also wanted the full payment before handing over the missile.
Lakhani complained to Rehman that he had already spent too much of his own money traveling and arranging the deal, and that he had received nothing from the down payment. The money was in Vijay Raja's account, waiting to be forwarded to the seller.
Rehman begged him to stay. "Whatever you say you spent, we will pay," he said in one taped conversation. "Just give us a rough amount."
The next week, federal agents wired $56,000 -- the remainder of the missile cost -- to Raja's account in Geneva. Lakhani was no closer to getting the missile, but he told Rehman otherwise.
"The package is ready," he promised in March. "I have seen it myself."
Three days later, he vowed it would be on the next ship to the United States. After another week passed, Rehman scolded Lakhani like a teacher to a student.
"Boss, do you know that the shipment comes from there every day?" he asked.
"Yes, I agree that shipment goes every day," Lakhani replied.
"Then what is the problem? If you have given them a job to do, they should have done it right away," Rehman insisted.
Lakhani was humble. "Yes, you're right," he said.
In April, he said, an official from the United Arab Emirates invited him to a trade meeting in Russia. By then, Lakhani said, he assumed the deal was dead because Laberia officials said they could probably not smuggle the weapon onto an outbound ship.
After he arrived in Moscow, Lakhani said, a Laberia executive called his hotel and asked to meet in the lobby. There, the executive explained that the company couldn't furnish the missile but introduced Lakhani to another man who might be able to help. His name was Vladimir, Lakhani said.
Over dinner at a Chinese restaurant, Lakhani said, Vladimir calmly promised to get him a missile by the summer.
Lakhani says he now believes Vladimir was a Russian agent. Federal officials have refused to detail the Russians' role in the case, except to acknowledge in court filings that the Russian Federal Security Service independently "infiltrated" the weapons network and that its agents posed as the missile sellers. In court filings on Friday, the prosecution said the Russians became involved "when they became aware of the arms smuggling activities of Lakhani" in Russia.
After his meeting with Vladimir, Lakhani's conversations with Rehman dwindled. He spent much of June in India trying to complete the refinery project, he said. When he returned to London, Vladimir called with a message.
"We are ready for you," he said.
DUMMY REPLICA
On July 14, Lakhani and Rehman traveled to Russia to see the shipment. As agents from the FBI, Secret Service and U.S. Customs secretly watched, Lakhani and Rehman inspected the weapon -- a dummy replica -- that the Russian agents said would be shipped to the United States.
They discussed the shipping arrangements, and Lakhani gave Vladimir a handwritten invoice. "I hereby promise to pay to Vladimir the sum of $70,000 U.S. dollars for the supply of goods and parts and I will release the sum upon receipt of necessary documents in St. Petersburg," it read.
Three days later, the bill of lading was submitted in Moscow. It described "dental equipment" to be shipped from St. Petersburg to the United States. The recipient was listed as House of Rice, Rehman's importing company, with an address in Avenel, N.J.
Rehman was elated. Later that month, he told Lakhani that his clients "have decided to give you $500,000 for this job because in this matter you did a great deal of foot work."
Still, Lakhani was nervous.
"Are you saying your prayers regularly?" he asked Rehman one night in late July.
"Yes, when you called me, I was saying my prayers," Rehman answered.
"Okay. May Allah help us," said Lakhani, a Hindu. "To be honest, I am afraid."
He arrived at the Wyndham about 11 a.m. Aug. 12 and proceeded to Rehman's suite. Rehman first chided Lakhani for sending the missile to the wrong port -- Baltimore instead of New York -- a mistake he said he could not repeat with the rest of the missiles.
Rehman said his sources were still able to get the weapon past U.S. borders and to New Jersey. He was ebullient.
"Boss, what did I tell you?" Rehman said. "I told you I can smuggle anything into America. Didn't I tell you?"
Lakhani was stunned. "I can't believe what we have done," he said, eyeing the crate.
The meeting was punctuated by cell phone calls and discussions about the rest of the missiles. Rehman promised to send another payment that day through Abraham, the Manhattan jeweler. He said his contact was waiting in the lobby with the money.
"You sit down," he told Lakhani. "I will return in a moment."
As Rehman left, Lakhani asked: "I will close the door. Okay?"
Moments later, agents stormed the suite.
AFTERMATH
Immediately after the arrest, agents showed Lakhani the tape and other evidence.
"I'm sorry," he said, according to one agent's report. "You know everything." He told them he was "a fool" driven by greed.
That afternoon, agents raided Abraham's office and arrested him and a third man, Moinuddeen Ahmed Hameed, who was waiting to witness the money transfer. Prosecutors later said neither man was aware the transaction involved missiles. Both have agreed to plead guilty to charges over the illegal money transfer.
Vijay Raja, Lakhani's contact in London, also is cooperating with agents there.
Last month, the judge in Lakhani's case ruled that he was no longer able to afford a private attorney and approved court funding for his defense. Klingeman, his defense attorney, said he plans to use some of the money to hire an independent expert to challenge the translations of the taped conversations.
He also has asked U.S. District Court Judge Katharine Hayden to compel the government to identify its cooperating witness and turn over information about his background. In motions filed late Friday, prosecutors argued that they should not have to reveal the information until the week before the trial.
Hayden has scheduled an April 26 hearing for arguments in the case.
A trial is not likely to occur until the fall.
ping
Just because he isn't wildly successful in his chosen field is no reason to let him go. The b*st*rd needs to be punished. Big time.
Note from below: Mohammed Habib Rehman = Mr. Haji
Brit-Indian admits laundering $86,000 for Hemant Lakhani
A London financier of Indian origin has admitted to laundering $86,000 for UK-based Indian, Hemant Lakhani, who was arrested last year in New Jersey for selling shoulder-fired missiles to an FBI informant who had posed as a terrorist.
At a US federal court hearing in Newark, Manthena "Vijay" Raja, who has agreed to testify against Lakhani when the trial begins in November, said he knew the money was payment for a missile.
Since the 18-month FBI sting operation that led to the arrest of Lakhani in August 2003, Raja, 44, is the third person to plead guilty in the case. Prosecutors said Lakhani, 69, arranged the $5 million sale of 51 shoulder-fired missiles to an undercover informant who said he wanted them to bring down US jetliners.
Lakhani was arrested after the delivery of the first missile, which was actually a harmless replica sold to him by undercover Russian agents as part of the sting operation. Lakhani has maintained that he is not a terrorist. His lawyer Henry Klingeman has said Lakhani was a victim of entrapment by government operatives.
Raja told the court that he had met Lakhani four years ago and in 2002 he agreed to help facilitate the missile purchase. He admitted faxing weapons brochures and accepting money for Lakhani from a man in the US known to him as "Mr Haji". The payment for the first missile came in two transfers. Raja said he gave the first $30,000 to Lakhani and deposited the second amount, $56,500, in a Swiss bank account.
Claiming to be a financial services and asset management professional, Raja said he was aware the money was part of an illegal arms deal between Lakhani and Haji. According to an American media report earlier this year, Haji is allegedly a paid FBI informant named Mohammed Habib Rehman. He is expected to be the key witness at Lakhani's trial.
Raja, who faces between 37 to 46 months in prison, made a plea bargain to a single money laundering count and agreed to forfeit the total sum of $86,500. Prosecutors agreed to ask the judge for a lighter sentence based on his assistance in the case. Raja will be allowed to return to London after posting $100,000 cash bail. His defense attorney Paul Brickfield said his client is a businessman and a born-again Christian who harboured no ill will toward the United States.
Two other defendants, Yehuda Abraham, a New York jeweller, and Moinuddeen Ahmed Hameed, an Indian national, await sentencing. They have pleaded guilty to operating an unlicensed money transmitting service in connection with the arms plot, and admitted they arranged to secretly transfer thousands of dollars for Lakhani. But both men maintained that they did not know the money was part of a missile deal. Lakhani is held at the Passaic County Jail in Paterson. His trial is expected to last at least two months.
One word ~ Intent.
http://www.newsday.com/news/local/wire/newjersey/ny-bc-nj--missileplot0207feb07,0,7917394.story?coll=ny-region-apnewjersey
Trial resumes after defendant has heart procedure
February 7, 2005, 8:54 PM EST
NEWARK, N.J. -- A British businessman accused of trying to sell shoulder-fired missiles to a terrorist group was back on trial Monday after having a heart procedure.
Hemant Lakhani, 69, faces charges including attempting to provide material support to terrorists and attempting to sell arms without a license, counts that carry a combined sentence of 25 years. He has denied all charges and any links to terrorism.
His trial was delayed after he fell ill last month and then had angioplasty at St. Joseph's Hospital & Medical Center in Paterson.
Lakhani's attorney, Henry Klingeman, told the court Monday that his client was "well enough" to continue.
Federal prosecutor Stuart Rabner resumed questioning the government's star witness, Mohammed Habib "Haji" Rehman, a confidential informant.
Rehman has occupied the witness stand for the bulk of the trial since its Jan. 4 start. The backbone of the government's case consists of hundreds of hours of secretly taped conversations between Rehman and Lakhani.
Transcripts of the tapes presented in court Monday showed Rehman repeatedly urging Lakhani to complete the deal for a first "sample" missile that was intended for an East African terrorist group.
According to the transcripts, nearly a year after Lakhani had allegedly agreed to take part in the scheme, he still was struggling to finish the deal.
At one point in November 2002, Lakhani for a moment appeared to suspect Rehman might be a double agent.
"Boss, don't you ever think like this," Rehman said.
Klingeman, who contends his client was the victim of government entrapment, is expected to begin cross-examining Rehman later this week.
Lakhani has been imprisoned since his arrest in a Newark hotel room in August 2003.
Looking... to start here's the India deal
http://www.freerepublic.com/focus/f-news/762008/posts