WASHINGTON - Federal law enforcement authorities said in court documents unsealed yesterday that they suspected a group of Islamic charities in northern Virginia of laundering hundreds of thousands of dollars or more from Saudi Arabia to help finance terrorist attacks by Hamas and other militant groups.
Authorities said in documents that they suspected that the network of charities known as the Saar group in Herndon, Va., used an elaborate system of domestic and overseas financial transactions to "blur the trail" of its revenues and disguise that it was sending money to aid overseas terrorist organizations.
`Built on innuendo'
The documents were originally filed under seal by federal authorities in March last year to obtain a search warrant to raid the Islamic institutions.
But Muslim leaders have charged that the investigation is driven by ethnic profiling.
"This case is built on innuendo. It's all just post-9/11 hysteria," said Nancy Luque, a prominent Washington lawyer defending the charities.
The investigation, which began in 1998, has yielded few prosecutions.
A New Jersey man, Soliman S. Biheiri, whose investment firm received money from the northern Virginia charities, was convicted this month on federal immigration charges.
And a leading Muslim activist, Abdul Rahman al-Amoudi, who worked at the charities in the early 1990s and also helped to train Islamic military chaplains, has been arrested after officials said he tried to smuggle money from Libya to terrorist-related groups in Syria.
Luque said those two defendants are peripheral at best to the Saar group.
The affidavit used to carry out those raids, filed by a customs agent, David Kane, said authorities suspected that the Herndon charities began using an elaborate pattern of financial concealment beginning in the mid-1990s.
Kane said that the group made $54 million in grants and allocations between 1996 and 2000, but that much of that money was given to entities the group already controlled in the United States and in tax havens such as the Isle of Man.
He said he suspected that the purpose of the complicated financial arrangements was to "hinder the ability of investigators to ascertain the ultimate disposition of those monies," and that the transactions might have violated federal tax and financial reporting laws.