Several Muslim charities, think tanks, and businesses based in northern Virginia were used to funnel millions of dollars to terrorists and to launder millions more, according to court records.
An affidavit from a Homeland Security agent, David Kane, said that the Safa Group, also known as the SAAR network, in Herndon, Va., had sent more than $26 million in untraceable money overseas and that leaders of the organization "have committed and conspired to . . . provide material support to foreign terrorist organizations."
The inquiry into the Herndon groups is the largest federal investigation of terrorism financing in the world, authorities have said. The unsealing of Kane's report marks the first surfacing of government allegations that the main purpose of the Virginia organizations, set up primarily with donations from a wealthy Saudi family, was to fund terrorism and to hide millions of dollars.
Kane said the convoluted nature of the myriad transactions and the fact that much of the money was sent to tax havens with bank secrecy laws make it impossible to trace the final destination of much of the money. But he said the pattern of the money's movement, coupled with the association of leaders of the Safa Group with suspected terrorists, were strong indicators the group was financing terrorism.
"There appears to be no innocent explanation for the use of layers and layers of transactions between Safa Group companies and charities other than to throw law enforcement authorities off the trail," Kane wrote in documents that were unsealed Friday.
In March 2002, federal agents raided the organization's offices in Herndon as well as the homes of eight reported leaders of the group. The raids prompted widespread protest among the Muslim community.
Muslim leaders accused law enforcement officials of carrying out a witch hunt and said the raids, in which computers and other office equipment were seized, were hurting legitimate businesses.
The affidavit was released Friday. The document lays out the government case in detail for the first time, including alleged financial ties going back almost two decades between the Safa Group and groups under investigation for terrorist ties in Florida and Dallas.
Nancy Luque, a lawyer for many of the individuals and companies cited in the affidavit, said Friday the document is filled with "rank speculation by agent Kane." She said that at the time the Safa Group began its work with the Florida and Dallas groups, they were not under investigation.
"It doesn't show that one penny went to a terrorist or a terrorist organization," she said of the affidavit. "Given the lack of evidence of any money going to any terrorist organization, it is no wonder the government has released this affidavit, which to me means the case is at a dead end. . . . They can leave it out there to smear everyone."
The affidavit charges that overlapping companies in the Safa Group were deliberately set up to "layer" or obscure the final destination of millions of dollars that moved in complicated transactions among organizations led by the same small group of people.
It details how, from 1996 2000, charities in the Safa Group raised $54 million and that $26 million was sent to the Isle of Man, a known tax haven where bank secrecy laws make it impossible to trace the final destination of the money. Another $20 million went to Safa Group charities and about $8 million went to people and groups outside the organization, according to the group's filings with the Internal Revenue Service.
The purpose of all the transactions, Kane said, is "to route money through hidden paths to terrorists, and to defraud the United States by impeding, impairing, obstructing, and defeating the lawful government functions of the IRS."
The initial money to set up the Safa group, was $3.4 million hand-carried in 1980 from Saudi Arabia by Ibrahim Hassaballa, Kane said. The heart of the network in the early years was the SAAR Foundation, named from the initials of Sulaiman Abdul Aziz al Rajhi.
While the SAAR Foundation legally dissolved in December 2000, Kane said the company maintained a bank account that continued to receive wire transfers and deposits over the next year.