Federal panel to weigh case of 2 Muslim immigrants guilty of money laundering in Albany
By BRENDAN J. LYONS , Senior writer timesunion.com Albany 3/23/08

A federal appeals court in New York City is set to hear the case Monday of two Muslim immigrants whose convictions for laundering money from a fictitious terror plot sparked intensive controversy over the FBI’s post-9/11 tactics and the government’s use of warrantless wiretapping. A panel of three judges from the U.S. Court of Appeals for the Second Circuit have set aside an unusually long period — 90 minutes — to hear oral arguments from attorneys for the Justice Department, the defendants, and the New York Civil Liberties Union. The NYCLU is challenging the government’s use of sealed motions and classified evidence in the case.

The arguments are scheduled to unfold in an opulent ceremonial courtroom on the 9th floor of the Daniel Patrick Moynihan Courthouse in lower Manhattan.

Yassin M. Aref, 37, a Kurdish refugee from northern Iraq, and Mohammed M. Hossain, 53, a naturalized U.S. citizen from Bangladesh, are both serving 15-year terms at federal prisons in Indiana and New Jersey, respectively.

They were found guilty by a federal jury in Albany in October 2006 on charges they participated in a scheme to launder money from the sale of a shoulder-fired missile. The weapon was to be used in the assassination of a Pakistani diplomat in New York City. The plot was not real and had been concocted by the FBI, which enlisted a Pakistani informant with a criminal background to lure the men into the scheme.

“This is the single most important case I will ever have the privilege to argue,” said Terence L. Kindlon, Aref’s attorney. “A grave injustice has occurred and it must be undone. It is my belief that the Bush administration exploited post-9/11 fear, cynically manipulated classified information and misused prejudicial evidence to wrongfully convict two good and innocent men.”

The judges scheduled to hear the case are: Chief Judge Dennis G. Jacobs, who was appointed to his appeals post in 1992 by President George Bush; Senior Circuit Judge Wilfred Feinberg, who joined the panel in 1966 on appointment from President Lyndon Johnson; and U.S. District Judge Leonard B. Sand, a designee on the appeals court who became a federal judge in Manhattan 30 years ago under President Jimmy Carter.

Kindlon, and Hossain’s attorney, Kevin A. Luibrand, are appealing the guilty verdicts and arguing, among other things, that Aref and Hossain were duped by a manipulative and cunning informant and had not knowingly been part of any terrorist plot. They contend the investigation was fatally flawed by language barriers, faulty government intelligence and an overzealous FBI counterterrorism task force in Albany.

Hossain was also entrapped and had no predisposition to take part in a missile attack or money laundering scheme before the FBI parachuted their informant into his life five years ago, Luibrand’s motion states.

Both attorneys are seeking to have the verdicts overturned and for the men to be released from prison.

Justice Department prosecutors have countered in motion papers that evidence at the trial was sufficient to prove to a jury that Hossain and Aref continued doing business with the FBI’s informant even after learning he was involved in the sale of a missile launcher to terrorists.

Aref’s background as a Kurdish refugee and a gifted Muslim spiritual leader was a focal point at trial. The government produced evidence they said showed he was involved with, or worked for, suspected terrorism figures in Iraq and Syria. Kindlon challenged the Pentagon-produced intelligence, likening one of the so-called terrorist organizations cited by the government to no more than a Middle East version of AAA.

The jury of six men and six women concluded at the end of the monthlong trial that both men remained embroiled in the money laundering scheme after learning the proceeds were from the sale of a missile launcher.

But their deliberations were not without controversy. A juror who spoke to the Times Union on the condition he not be identified said he had concluded Aref knew about the terrorism plot from private conversations with Hossain. But that assertion was never offered by the government at trial and it’s improper for jurors to assume any facts.

The case galvanized the Albany community and dozens of supporters for Aref and Hossain held regular vigils in front of the James T. Foley federal courthouse in peaceful protest of the guilty verdicts.

Kindlon also has argued that secret FBI recordings, portions of which were played for the jury, show his client never made statements indicating he supported a Pakistani terrorist organization, Jaish e-Mohammed (JEM), or was a willing participant in any terrorist plot. The FBI had selected that group for their fictitious plot.

Aref, the former spiritual leader of a Central Avenue mosque and the investigation’s primary target, was acquitted on 20 of the 30 counts he faced. Still, he was convicted of key charges that included money laundering and conspiracy to support terrorism.

The acquittal on 20 counts fueled the unrest surrounding the case because it meant the jury believed Aref had not realized he was involved in a terror-related money scheme until nearly 10 months after the sting began. Kindlon said even that finding was flawed, because Aref never understood the informant’s code word of “chaudry” meant “missile.”

To counter that claim, the government showed jurors a notebook of Aref, who taught himself English, in which he jotted down various translations of words. One such entry stated “rocet = missile.”

Hossain, a pizza shop owner who arrived in the United States more than 20 years ago aboard a cargo ship, was found guilty on all 27 counts he faced, including conspiracy to support terrorism. Hossain and Aref co-founded their Central Avenue mosque, Masjid as Salam.

The case was launched in July 2003, after Aref’s name and Albany address were recovered from debris or notebooks in three suspected terrorist encampments during the early stages of the Iraq war.

But Kindlon and the American Civil Liberties Union, citing reports in the New York Times in 2005 and 2006, said the origin of the government’s decision to target Aref may have been a result of a controversial warrantless wiretapping program that has been a subject of national debate and court challenges.

The government has never confirmed whether they secretly monitored Aref’s telephone calls or e-mails. The Justice Department’s responses to those accusations were filed under seal.

The FBI began their sting by sending an undercover informant, who posed as a wealthy importer, into Hossain’s financially strapped pizza shop to become his friend. The informant bought Hossain’s children toys and boasted he had more money than he needed and could help.

It was all a ruse to get to Aref. FBI officials told the Times Union after the trial they believed Aref was highly intelligent and would be easily spooked if the informant had approached him directly or shown him the missile.

The informant offered to loan money to Hossain. The pizza maker suggested Aref, his mosque’s imam, be enlisted to witness their transactions. That was what the FBI gambled would happen because of a centuries-old tradition in which Muslims routinely rely on one another for loans, with their imams serving as a witness.

Over several months, the legitimate loan was transformed into an illicit money laundering scheme as the informant slowly disclosed in broken English and a mix of Arabic how he imported missiles and sold them to terrorists, according to prosecutors.

Luibrand contends Hossain never connected his loan with the informant’s scheme. At one point, the informant told Hossain: “I am not doing anything wrong nor am I breaking any law,” according to an FBI tape recording.

A critical part of the sting, which no attorney in the case ever pointed out to the jury, was that Aref was never shown the missile launcher. Early in the sting, the informant had pulled out the dangerous-looking weapon and set it atop his shoulder in his office as Hossain appeared to look at the weapon in shock, questioning whether it was legal.

Photos of that ominous scene were shown to the jury and broadcast on news outlets across the nation following the arrests, fueling little sympathy for Hossain and Aref at a time when the nation was still reeling from the 9/11 attacks and embroiled in the early stages of the Iraq War.

Pericak, the lead prosecutor, declined to comment, and said he would do his talking in the courtroom.

In an aside to the evidence, Kindlon has challenged whether the National Security Agency illegally wiretapped Aref. Information about the FBI’s use of wiretaps never disclosed to the defense attorneys and Justice Department lawyers were allowed to file their motions on that issue under seal.

The New York Civil Liberties Union and the American Civil Liberties Union, both of which have filed briefs on the matter, said the appellate court may use this case to address the legality of the controversial NSA spying program.

Luibrand and Kindlon both said that while those issues are of great importance, their primary interest is to their clients.

“There are some far-reaching ramifications attached to this case,” Luibrand said. “But, what we care about is Mr. Hossain’s return home, and doing the work needed on Monday to reach that objective.”

Brendan J. Lyons can be reached at 454-5547 or by e-mail at blyons@timesunion.com.


For more information about the case see “From Sting to Frame-Up: The Case of Yassin Aref,” by Steve Downs, one of the lawyers for Yassin Aref.