Columbia, Missouri Man Misused Charity to Send Over $1 Million to Iraq
June 28, 2010 - KANSAS CITY, MO—A Columbia, Missouri man pleaded guilty in federal court today to conspiring to illegally transfer more than $1 million to Iraq in violation of federal sanctions, and to obstructing the administration of the laws governing tax-exempt charities, announced Beth Phillips, U.S. Attorney for the Western District of Missouri.
Mubarak Hamed, 53, of Columbia, a naturalized U.S. citizen originally from Sudan, pleaded guilty before U.S. District Judge Nanette K. Laughrey today to three charges contained in a Jan. 16, 2008, federal indictment.
“This defendant used a Missouri charity to violate the United States’ economic sanctions against Iraq,” U.S. Attorney Phillips said. “Hamed compromised national security by secretly funneling more than a million dollars to Iraq.”
Hamed was the Executive Director of the Islamic American Relief Agency (IARA), an Islamic charitable organization formed in 1985 and headquartered in Columbia. IARA, formerly known as the Islamic African Relief Agency-United States Affiliate, was the U.S. branch office of a global network headquartered in Khartoum, Sudan, known as the Islamic Relief Agency, or ISRA. The IARA was closed in October 2004, after being identified by the U.S. Treasury Department as a specially designated global terrorist organization because the international offices of ISRA provided financial support for Osama bin Laden, Al-Qaida and the Taliban.
As a charity, IARA took in between $1 million and $3 million in contributions annually from 1991 to 2003. It also received funds from the U.S. Agency for International Development (USAID). During Hamed’s tenure, IARA employed approximately six full-time employees, and an additional 10-12 part-time employees.
Hamed and IARA solicited charitable contributions throughout the United States, and then illegally transferred funds to Iraq with the assistance of a Sudanese man living in Jordan, who was subsequently identified by the U.S. Treasury Department as a specially designated global terrorist. Hamed admitted that he regularly wired funds to this person. Hamed admitted that he sent 11 separate wire transfers totaling $434,376 between December 1999 and August 2002, as charged in the federal indictment, as well as many similar uncharged transactions. The government believes the total amount Hamed transferred to Iraq was approximately $1.2 million.
In addition to the conspiracy, the specific charge to which Hamed pleaded guilty today involved the Dec. 18, 2001, transfer of $40,974 from the IARA bank account to a bank account in Jordan, which was intended to go to persons in Iraq.
Under the authority granted by the International Emergency Economic Powers Act, former President George H.W. Bush issued an Executive Order on Aug. 2, 1990, which declared a national emergency with respect to Iraq. The Secretary of Treasury issued the Iraqi Sanctions Regulations, which prohibited unauthorized transfer of money or goods to Iraq by U.S. persons, including organizations and lawful permanent resident aliens. Neither IARA nor Hamed ever received authority from the U.S. government to transfer money to Iraq for any purpose.
In pleading guilty, Hamed admitted that he conspired with others and violated the federal sanctions that were then in place regarding Iraq. Hamed also admitted that he impaired and impeded the administration of the Internal Revenue laws by misusing IARA’s tax-exempt status, providing false information to the Internal Revenue Service (IRS), and lying to federal agents.
“Today’s conviction is the culmination of nine years of hard work by federal prosecutors and investigative agents,” U.S. Attorney Phillips said. “Coming as it does on the eve of the jury trial, today’s guilty plea is a testament to the strength of the case they built.”
Under federal statutes, Hamed is subject to a sentence of up to 20 years in federal prison without parole, plus a fine of up to $1.5 million. A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.
Hamed is the third defendant to plead guilty in this case.
Co-defendant Ali Mohamed Bagegni, 56, a native of Libya who is a naturalized U.S. citizen and former resident of Columbia, pleaded guilty on April 6, 2010, to his role in the conspiracy. Bagegni was a member of the board of directors of IARA. Co-defendant Ahmad Mustafa, 57, of Columbia, a citizen of Iraq and a lawful permanent resident alien of the United States, pleaded guilty on Dec. 17, 2009, to illegally transferring funds to Iraq in violation of federal sanctions. Mustafa worked as a fund-raiser for IARA and traveled throughout the United States soliciting charitable contributions. Further, in 1999, 2000 and 2001, Mustafa traveled to Iraq on IARA business. In early 2001, he visited cities throughout Northern Iraq for several weeks and met with numerous officials to discuss the process of opening an IARA office in Iraq. Among the officials with whom Mustafa met was Hushyar Zibari, who was at the time a leader in the Patriotic Democratic Party of Kurdistan and is currently the foreign minister of Iraq. Mustafa also looked to find a building suitable for an IARA office in the Kurdish provinces of Iraq.
This case is being prosecuted by Assistant U.S. Attorneys Anthony P. Gonzalez, Steven M. Mohlhenrich, Dan Stewart and Brian Casey from the U.S. Attorney’s Office for the Western District of Missouri, Trial Attorney Paul G. Casey from the National Security Division of the U.S. Department of Justice and Joe Moreno of the Counter Terrorism Section of the U.S. Department of Justice. The case was investigated by the FBI, IRS-Criminal Investigation and U.S. Agency for International Development, Office of the Inspector General.