PORTLAND, OREGON – A federal grand jury in Eugene, Oregon has returned
a three-count indictment against the Al-Haramain Islamic Foundation,
Inc. (U.S.) and two of its officers on charges of conspiring to defraud
the U.S. government, the Department of Justice announced today. The
indictment charges that defendants Pirouz Sedaghaty, also known as Pete
Seda and Abu Yunus, and Soliman Al-Buthe conspired with the U.S. branch
of the Al-Haramain Islamic Foundation, Inc., to defraud the U.S. government
by obtaining $150,000 in funds intended for distribution in Chechnya,
and concealing their intent by filing a false tax return and failing
to acknowledge they were transporting funds out of the United States.
The indictment, returned by a federal grand jury yesterday, alleges
that in February 2000, an Egyptian contacted the Al-Haramain Islamic
Foundation in Riyadh, Saudi Arabia, seeking to donate $150,000 "in order
to participate in your nobel support to our muslim brothers in Chychnia
(sic)....," and wire transferred the funds to an Al-Haramain Islamic
Foundation, Inc. bank account in Ashland, Oregon. According to the indictment,
Al-Buthe then flew from Saudi Arabia to Oregon, and went to a bank with
Sedaghaty to retrieve the funds. At the bank, Al-Buthe and Sedaghaty
allegedly obtained 130 American Express Travelers Checks in $1,000 denominations
and a $21,000 cashier's check made out to Al-Buthe. The indictment alleges
that Al-Buthe immediately departed the United States with the $150,000
and intentionally failed to file a report, as required by U.S. law,
acknowledging he was transporting more than $10,000 in travelers checks
out of the country.
The indictment further charges Sedaghaty and the U.S. branch of the
Al-Haramain Islamic Foundation, Inc., with filing a false tax return
in 2000. U.S. law requires tax exempt charitable organizations like
Al-Haramain to report all donations it received and distributed in a
return filed with the Internal Revenue Service, which monitors the activities
of tax exempt organizations. According to the indictment, Sedaghaty,
on behalf of the U.S. branch of the Al-Haramain Islamic Foundation,
Inc., deliberately filed a false return with the IRS in 2000 by falsely
reporting that the Egyptian donor's funds were used to purchase a building
in Missouri, rather than being transported out of the United States.
"The system of charitable donations in the United States is built
on trust, honesty and integrity, particularly in the reporting of donations
and taxes to the U.S. government," said U.S. Attorney Karin J. Immergut
of the District of Oregon. "The Department of Justice has a duty to
investigate and prosecute any cases where that trust is abused criminally,
and where a charity violates the law in order to hide its activities
from the government."
Sedaghaty and Al-Buthe are believed to be outside of the United States.
If convicted, Sedaghaty faces up to eight years in prison, and Al-Buthe
faces up to 10 years in prison. The indictment also seeks to have $130,000
forfeited from the U.S. branch of the Al-Haramain Islamic Foundation,
Inc.
The parent organization, Al-Haramain Islamic Foundation, formerly
based in Riyadh, Saudi Arabia, was not charged in the indictment.
The investigation was conducted by criminal investigators with the
Internal Revenue Service, Immigration and Customs Enforcement, and the
Federal Bureau of Investigation. The case is being prosecuted by the
U.S. Attorney's Office in the District of Oregon.
Criminal indictments are only charges and not evidence of guilt. A
defendant is presumed to be innocent unless and until proven guilty.
For further information, contact First Assistant U.S. Attorney Barry
Sheldahl at (503) 727-1000.
