Finances Prompted Raids on Muslims
U.S. Suspected Terrorism Ties to N.Va. for Years
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By John Mintz and Tom Jackman
Washington Post Staff Writers
Sunday, March 24, 2002; Page A01
Federal agents who searched 16 homes and offices in Northern Virginia last week were focusing on a tightly interconnected, complicated and very private financial empire with worldwide ties that has drawn the suspicion of investigators for at least seven years.
Showing up with warrants and drawn guns, the agents seized computers, financial records and boxes of other documents from some of the nation's most reputable Islamic organizations and leaders -- a coordinated series of raids that outraged many Muslims.
At the center of the federal investigation is a cluster of companies and charities based in Herndon that was launched in the 1970s by one of Saudi Arabia's leading banking families, the al-Rajhis. The network has owned or invested in scores of businesses worldwide, from sprawling dairy farms in Zimbabwe to a huge poultry business in Georgia and lucrative office buildings in downtown Washington.
For years, most of the firms and foundations searched have engaged in extremely complex business deals with one another. And since the mid-1990s, federal agents have tried to track the $1.7 billion that has sloshed among them. Millions of dollars have ended up being sent to related firms in offshore tax havens, such as the Isle of Man, or to organizations that are under investigation for possible ties to terrorists.
The central figure in the interlocking companies and foundations is M. Yaqub Mirza, a financier with a reputation for brilliance who received a doctorate in physics from the University of Texas before taking the helm of the SAAR Foundation in Herndon, whose money he invested to start or gain positions in dozens of firms around the globe. SAAR and two close affiliates, the Safa Trust and the International Institute of Islamic Thought -- all of whose offices were searched -- donate funds to many worthy Islamic causes, such as publishing religious texts and training Muslim clerics.
"We know we have not done anything wrong," Mirza, who also manages a mutual fund firm called Amana, said in a brief telephone interview yesterday. "We will work with the government agencies and get them whatever they need." He said attorneys had advised him not to respond to reporters' questions.
A spokesman for the al-Rajhi family interests in Saudi Arabia also recently said that its firms have committed no wrongdoing.
While these organizations and firms are well-known in the Muslim world, they have kept an extremely low profile in the business community here.
Five of their senior executives live in modest two-story homes on adjoining lots on or near tiny Safa Court in Herndon. The houses were built on 22 acres that one of their affiliated firms bought and developed in 1987.
Agents of the U.S. Customs Service, the lead agency in the raids that began Wednesday, had obtained search warrants allowing them to seize files and computers in a search for information on a number of groups deemed terrorist organizations -- such as al Qaeda, Hamas and Palestinian Islamic Jihad -- and on a wide array of Islamic groups.
Many Muslims are dismayed because some sites searched are among the most established Islamic organizations in the United States, and in some cases, it is unclear what their ties to SAAR or alleged terrorist activity could be.
The Fiqh Council of North America in Leesburg, for example, is an organization of leading clerics that issues religious interpretations for mosques and Islamic centers across the country. The Graduate School of Islamic Social Sciences, also in Leesburg, trains Muslim imams for religious service, including in the U.S. military.
"It is a sad day for America again," said Mohammad Omeish, president of the Success Foundation, which describes itself as devoted to helping Muslim victims of war worldwide and whose Fairfax office was searched. "The message we are getting is, this war, even though they claim it is against terrorism, is against Muslims."
Agents, who carted about 25 computers from the International Institute of Islamic Thought, were raiding a research group that publishes books and holds seminars, some with Western scholars. This week, it had been scheduled to receive a delegation of Filipino Muslims sponsored by the U.S. State Department.
"Here we have a raid by the Treasury Department trying to destroy a moderate voice in this country," said Louai Safi, the group's director of research. "We promote democracy, human rights, civil exchange and dialogue."
Imam Yahya Hendi, the Muslim chaplain at Georgetown University, said he was "outraged" by the search at the institute. "It is a positive landmark," he said. "It introduces America to Muslims . . . and introduces Islam to America, to help America understand us."
But the federal government has been investigating the institute for years. In 1996, one of its researchers was deported because of suspicions that he was an operative for Islamic Jihad, a group that kills Israeli civilians in suicide bombings and has been deemed a terrorist organization by the U.S. government.
For years, the institute was also a main financial backer of the World and Islam Studies Enterprise, a now-defunct Muslim think tank at the University of South Florida. Federal agents have long said that its leader, computer science professor Sami Al-Arian, used the Studies Enterprise and a related charity to raise funds for Islamic Jihad. Al-Arian has denied taking part in terrorist activities, and no charges have been filed.
The agents' years-long investigation of the International Institute's ties to the Studies Enterprise, and possibly Islamic Jihad, is an example of what federal officials call an "intelligence" probe -- one not designed to necessarily yield criminal charges but to keep tabs on possible terrorist activities or other acts that could harm U.S. security, said one federal source. Civil libertarians often criticize such investigations as unfair. Many parts of those probes are classified, as is the case with the examination of the Studies Enterprise.
Agents are also investigating allegations that elements in the SAAR-Safa network have ties to Nada Management, a Swiss financial organization whose assets were seized by Western governments last fall, officials said. U.S. and European governments said they believe that Nada has handled large sums for Osama bin Laden and various terrorist movements -- allegations that Nada denies.
Another location searched last week was the Falls Church office of the Muslim World League, a leading Islamic charity based in Saudi Arabia. U.S. intelligence agencies have been investigating it for years because of suspicions that it wittingly or unwittingly provides funds to bin Laden. U.S. officials suspect that some of its employees were involved in bombing two U.S. embassies in Africa in 1998.
Federal agents also are looking into whether any of the SAAR-Safa entities committed crimes, including money laundering or income tax improprieties -- or possibly illegally offering support to overseas terrorist groups -- law enforcement sources said.
Huge sums of money zip among these firms and foundations, and some of the transactions can be traced on tax forms filed with the Internal Revenue Service.
For example, in 2000, a charity called the York Foundation -- whose president is Mirza and which is based in the same building on Grove Street in Herndon as SAAR and Safa Trust -- received $400,000 from Safa, tax forms showed. The same year, York dispatched $400,000 to a related entity called the York International Trust on the Isle of Man, where tax records are kept private.
In the two years before SAAR went defunct in December 2000, it sent two sums to an entity on the Isle of Man, the Humana Charitable Trust -- one for $168,000 and another for $9 million. Much of SAAR's work has been continued by its affiliate, Safa.
U.S. officials suspect that the ultimate recipients of the funds were linked to terrorists, but they are not sure. And the officials acknowledge that the participants could have engaged in subterfuge to avoid paying taxes.
Government officials said that even if no crimes are proven, it might serve the counterterrorist cause to simply disrupt the flow of money.
Other federal officials said the probe is part of a much wider effort tracking funds flowing through Saudi charities and firms that end up being used by groups deemed by the United States to be terrorist, such as al Qaeda and Hamas. The U.S. government has seized the assets of several leading Saudi charities and asked Saudi authorities to keep tabs on others.
While the latest probe of these entities began years ago, U.S. officials say it heated up after the Sept. 11 terrorist attacks. But sources said they had to plan their raids in a hurry starting two weeks ago because of a telephone call from a lawyer in Florida.
John Loftus, a former Nazi hunter for the Justice Department and more recently a lawyer for U.S. intelligence agency whistleblowers, contacted government officials March 11, saying he was about to file a lawsuit in Florida against Al-Arian that would lay out the ties among him, the International Institute, various of its affiliates and Saudi interests.
Customs and Treasury officials hustled to prepare their raids for March 20, the day that Loftus filed his lawsuit claiming various frauds by Al-Arian, Loftus and government officials said.
"There was no coincidence," Loftus said.
Staff writer Brooke A. Masters and research editor Margot Williams contributed to this report. |
