Five men indicted for allegedly transferring money to Iraq

~ The 33-count indictment alleges the men falsely represented fund-raising goals to the public.

KANSAS CITY, Mo. -- Four associates of a Missouri-based Islamic charity and a fifth man in the Middle East have been indicted on charges that they illegally sent money to Iraq and lied about an affiliate of Osama bin Laden's having worked with the charity, the federal prosecutor's office announced Wednesday.

The four men associated with the Columbia-based Islamic American Relief Agency-USA and the fifth man are charged in a 33-count indictment that alleges they stole government money and falsely represented their fund raising goals to the public. A federal grand jury returned the indictment Tuesday and it was unsealed Wednesday.

The men charged are Mubarak Hamed, 50, of Columbia, who served as executive director of the agency; Ali Mohamed Bagegni, 53, formerly of Columbia, now Iowa City, Iowa, a former board member; Ahmad Mustafa, 54, of Columbia, a former fund-raiser; Khalid Al-Sudanee, 55, of Jordan, regional director of the Middle East office of the Islamic African Relief Agency, which IARA had formerly been known as, according to the federal government; and Abdel Azim El-Siddiq, 50, of Palos Heights, Ill., former IARA vice president.

"Today's indictment paints an alarming picture of theft, money laundering, and fraud by the U.S. branch of an international charitable organization," assistant attorney general Kenneth L. Wainstein said in a news release. "These charges demonstrate our resolve to thoroughly investigate and prosecute any charities that abuse their tax-exempt status to engage in wide-ranging criminal activity."

Shereef Akeel, a lawyer representing the Columbia charity, said the IARA denies any wrongdoing or involvement in terrorism. He said the indictments were "disappointing and unfortunate," but it appeared the government's case against IARA had changed considerably.

"Two years ago they were basically accusing my client of being a terrorist organization, linking them to Bin Laden," Akeel said from his office in Birmingham, Mich., "just serious, devastating allegations that of course destroyed the organization."

Wednesday's charges were "very serious, but they're a different tone," he said.

"Now we're talking tax code violations and the Sanctions Act. ... Maybe that's Plan B. Plan A they couldn't find anything."

In 2004, federal agents raided the group's headquarters as part of a criminal investigation. The charity's assets were later frozen and IARA lost a recent bid to have its assets unfrozen.

Federal prosecutor Bradley J. Schlozman said Mustafa and Hamed were arrested Wednesday and arraigned in Jefferson City, and Bagegni was arrested in Cedar Rapids, Iowa.

Al-Sudanee was being sought in Jordan, and El-Siddiq was arrested Wednesday afternoon at Chicago's O'Hare International Airport after arriving on a flight from the United Arab Emirates, authorities said.

The men were charged with illegally transferring $1.4 million to Iraq from March 1991 to May 2003 -- when Iraq was under various U.S. and U.N. sanctions, Schlozman said.

The indictment alleges that on 11 separate occasions IARA, Hamed, Bagegni and Al-Sudanee transferred funds from the United States to Iraq through Amman, Jordan. The indictment also alleges the money was intended to "promote unlawful activity, that is violating the Iraq sanctions," Schlozman said in a news release.

"The defendants would wire funds to Jordan, then the money would be sent to Iraq," Schlozman said. "The money just continued to flow."

Schlozman said the men also are accused of lying about an associate of Osama bin Laden having been an employee of the IARA and that Hamed tried to deceive the federal government by saying that IARA was aiding Iraqis living outside Iraq.

The charges, Schlozman said, "represent a fraud on the gift-giving public."

Schlozman said the indictment does not mention -- nor would he comment on -- how the money was finally spent.

"I'm not going to talk about what motives the defendants may have had," Schlozman said.

The indictment alleges that "a person acting on behalf of IARA" lied in a 2001 CNN interview about IARA's affiliation with Ziyad Khaleel, a procurement agent of Osama bin Laden's. That person said Khaleel had never been an employee of IARA. Khaleel, who the government said helped obtain satellite phones for al-Qaida that were used to coordinate the attacks on the U.S. embassies in Kenya and Tanzania, had been an employee of IARA, according to the indictment. Khaleel has since died.

The charity has denied the allegations that it has financed terrorism. IARA in Columbia has repeatedly tried to distinguish itself from the Islamic African Relief Agency, a Sudanese group suspected of financing al-Qaida. A federal appeals court in Washington ruled last month that there was in fact a link between the two groups.

The indictment also alleges that IARA, Hamed and Bagegni held onto about $85,000 from the U.S. Agency for International Development after an IARA project with the agency in Mali had ended. The men are alleged to have used about $50,000 of that money to hire a lobbyist to get IARA removed from a Senate Finance Committee list of organizations suspected of being involved in supporting international terrorism.

Scott Berenberg, special agent for the Agency for International Development, said he could not address whether the IARA case was an isolated incident.

"But our office takes this kind of case very seriously. We have agents and auditors around the world to ensure that taxpayers' money is used correctly," Berenberg said.

Schlozman said he has requested a trial in Kansas City, but no date had been set.