The informant, identified as Michael Hamdani, who was arrested in Canada in late October 2002, created the story about 19 men who were seeking false passports in an attempt to get himself off the hook on criminal charges he was facing in the United States, sources said.
Based on Hamdani's information, the FBI issued an alert that launched an all-out effort by law enforcement officials, who feared terrorists might be seeking to attack Americans during New Year's celebrations.
The FBI posted pictures of five of the men on its Web site, prompting calls and sightings of the men from around the country. One of the men later turned up in Pakistan, and said he had no idea how the FBI got his picture.
According to the story investigators originally got, the men entered the United States from Canada using phony British passports forged by a Pakistani smuggling ring.
The FBI discovered that the information about the infiltrators was a hoax during an interrogation of one of the members of the document ring in Pakistan, sources said.
Alert Sparked Lockdown
The alert was part of information that led officials to shut down New York's harbor to all ships except emergency vessels from New Year's Eve through New Year's Day, and to ban vehicles from roads alongside the harbor.
Investigators also raided six locations in Brooklyn and Queens on Dec. 30 as part of an ongoing investigation into the ring. The FBI had released pictures of five men, and President Bush authorized an all-points bulletin to find them.
"We need to know why they have been smuggled into the country and what they're doing in the country," Bush told reporters at the time.
The FBI had warned that the names and ages of the men could be fictitious. They were identified as Abid Noraiz Ali, 25; Mustafa Khan Owasi, 33; Iftikhar Khozmai Ali, 21; Adil Pervez, 19 and Akbar Jamal, 28.
The man pictured as Owasi later came forward in Pakistan and said he had once tried to get a fake passport, but had been caught and remained in his country. His real name was Mohammed Asghar.
The informant, Hamdani, 44, was already facing fraud charges in Canada, after an October raid near Toronto uncovered hundreds of fake passports, immigration documents, and counterfeit traveler's checks for hundreds of thousands of dollars.
There are outstanding fraud warrants for Hamdani from the FBI in New York and the Royal Canadian Mounted Police. It was unclear whether he would face any additional charges.
He will squeal, then squeak, then squirm, then drool, then stop.