T4 B5 Us V Arnaout Fdr- Entire Contents- Court Docs- Withdrawal Notice- Press Releases- 1st Pgs Scanned For Reference 278

4 of 15 DOCUMENTS UNITED STATES OF AMERICA, Plaintiff, v. ENAAM M. ARNAOUT, Defendant. No. 02 CR 892

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION 282 F. Supp. 2d 838; 2003 U.S. Dist. LEXIS 12375 July 17, 2003, Decided July 18, 2003, Docketed

PRIOR HISTORY: United States v. Arnaout, 2003 U.S. Dist. LEXIS 1635 (N.D. 111., Feb. 3, 2003) DISPOSITION: [**1] Defendant's objection to including Chechen foot and hand warmers in calculating loss sustained. Defendant's objection to including Bosnian storage items sustained in part. Defendant's objections to application of § 3A1.4 sustained. LexisNexis (TM) HEADNOTES - Core Concepts: COUNSEL: For ENAAM M ARNAOUT, defendant: John T. Theis, Law Office of John T. Theis, Joseph J. Duffy, William Paul Ziegelmueller, Stetler & Duffy, Ltd., Chicago, IL. U. S. Attorneys: John C Kocoras, United States Attorney's Office, Chicago, IL. U. S. Attorneys: Pretrial Services, Probation Department. JUDGES: Suzanne B. Conlon, United States District Judge. OPINIONBY: Suzanne B. Conlon OPINION: [*840] ORDER

MEMORANDUM

OPINION AND

On the morning trial was to begin, Enaam Amaout entered a guilty plea to a charge of racketeering fraud conspiracy committed in his operation of a charity, Benevolence International Foundation ("BIF"). The

agreed facts submitted in a written plea agreement and the government's evidentiary proffer during the plea hearing specified the fraud consisted of Arnaout's undisclosed use of a portion of BIF's funds, raised for humanitarian purposes only, to provide aid to militia in Bosnia and Chechnya. The government agreed to dismiss other charges against Arnaout [**2] relating to money laundering and providing support to terrorist groups. During the initial sentencing hearing on June 16, 2003, all claimed factual errors in the presentence investigation report ("PSI") and all but two issues pertaining to application of the sentencing guidelines were resolved. The court invited counsel to submit additional evidence and citations of authority on two remaining guideline issues: calculation of loss and application of the iterrorism enhancement. These issues are now ripe for decision! " I. Loss calculations Hand and foot warmers. It is undisputed that Arnaout is accountable for $ .196,653 in losses due to improper diversion of BIF '"humanitarian funds to purchase Chechen military boots, uniforms and an ambulance; and Bosnian boots, blankets and tents, nl At the June 16th hearing, the court overruled Arnaout's objections to including Chechen shoes ($ 34,500), an xray machine ($ 6,755), cash ($ 3,225) and another ambulance for Bosnian fighters ($ 7,500). This brought the total loss to $ 248,633.

nl Amaout candidly admitted responsibility for the Bosnian blankets and tents. These items,

6 of 15 DOCUMENTS UNITED STATES OF AMERICA, Plaintiff, v. ENAAM M. ARNAOUT, Defendant. No. 02 CR 892

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION 2003 U.S. Dist. LEXIS 1635 February 3, 2003, Decided February 4, 2003, Docketed

SUBSEQUENT HISTORY: Objection sustained by, Objection sustained by, in part United States v. Arnaout, 2003 U.S. Dist. LEXIS 12375 (N.D. 111., July 17, 2003) PRIOR HISTORY: United States v. Arnaout, 236 F. Supp. 2d 916, 2003 U.S. Dist. LEXIS 41 (N.D. 111., 2003) DISPOSITION: Government's found inadmissible.

proffered

materials

determination that the proffered materials are admissible under the co-conspirator exception to the hearsay rule. See Fed. R. Evid. 801(d)(2)(E); United States v. Santiago, 582 F.2d 1128, 1134 (7th Cir. 1978). Defendant Enaam Arnaout objects to the proffer. nl In its reply to objections to its proffer, the government has withdrawn a substantial portion of its exhibits.

LexisNexis (TM) HEADNOTES - Core Concepts: The Conspiracies

Three distinct conspiracies are presented in the COUNSEL: [*1] For ENAAM M ARNAOUT, \d superseding indictment)There are significan defendant: Joseph J. Duffy, William Paul Ziegelmueller, differences in the nature and goals of the three charged Stetler & Duffy, Ltd., Chicago, IL. conspiracies. Count One alleges a racketeering conspiracy under 18 U.S.C. § 1962(c). The alleged U. S. Attorneys: John C Kocoras, United States racketeering acts are mail fraud, wire fraud, obstruction Attorney's Office, Chicago, IL. of justice and money laundering. This conspiracy allegedly began in 1992, ended in May 2002, and took U. S. Attorneys: Pretrial Services. place in Palos Hills, Worth, other locations in the Northern District of Illinois and "elsewhere." The alleged U. S. Attorneys: Probation Department. co-conspirators are Adel Batterjee "and others" associated with the BIF [Benevolence International JUDGES: Suzanne B. Conlon, United States District Foundation] enterprise. Judge. OPINIONBY: Suzanne B. Conlon OPINION: MEMORANDUM OPINION AND ORDER The government has submitted a 101-page proffer and 248 exhibits nl to support its request for a pretrial

Count Two alleges a conspiracy under 18 U.S.C. § 371 to provide material resources to groups that include al Qaeda, Hezb e Islami, the Sudanese Popular Defense Force "and others" engaged in violent confrontations in Chechnya and Sudan, in violation of 18 U.S.C. § § 956(a)(l) and 2339A. This conspiracy allegedly began in September 1994, ended in May 2002, and took place in

10 of 12 DOCUMENTS UNITED STATES OF AMERICA, Plaintiff, v. BENEVOLENCE INTERNATIONAL FOUNDATION, INC., and ENAAM M. ARNAOUT a/ k/ a ABU MAHMOUD a/ k/ a ABDEL SAMIA, Defendant. Case No. 02 CR 414 UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION 2002 U.S. Dist. LEXIS 17223 September 13, 2002, Decided September 13, 2002, Docketed

DISPOSITION: [*1] Defendants' motion to dismiss the indictment granted. LexisNexis (TM) HEADNOTES - Core Concepts: COUNSEL: For BENEVOLENCE INTERNATIONAL FOUNDATION, INC., defendant: Mary L Rowland, Gessler, Hughes & Socol, Ltd., Matthew J. Piers, Kopka, Pinkus & Dolin, P.C., Chicago, IL. For ENAAM M ARNAOUT, defendant: Joseph J. Duffy, William Paul Ziegelmueller, Stetler & Duffy, Ltd., Chicago, IL. U. S. Attorneys: AUSA, United States Attorney's Office, Chicago, IL. U. S. Attorneys: Pretrial Services. U. S. Attorneys: Probation Department. JUDGES: JOAN B. GOTTSCHALL, United States District Judge. OPINIONBY: JOAN B. GOTTSCHALL OPINION: MEMORANDUM OPINION AND ORDER Defendants Benevolence International Foundation, Inc. ("BIF") and Enaam Arnaout, BIF's

Chief Executive Officer, are charged with making and using false declarations signed by Arnaout under penalty of perjury, in violation of 18 U.S.C. § 1623. Defendants have moved to dismiss the indictment. For the reasons set forth below, the motion is granted. Background Defendant BIF is an Illinois not-for-profit charitable organization incorporated in 1992. Defendant Arnaout has been employed with BIF since 1993. He has been the CEO since 1998. [*2] On December 14, 2001, pursuant to the emergency search provisions of the Foreign Intelligence Surveillance Act, 50 U.S.C. § 1801 et seq., the FBI seized financial and business records from BIF's Palos Hills, Illinois office. The FBI also searched Arnaout's home and seized certain of his and his family's personal effects. On the same date, acting pursuant to the International Emergency Economic Powers Act, 50 U.S.C. § 1701 et seq., the Treasury Department issued an order blocking BIF's assets and records pending further investigation. On January 30, 2002, BIF filed suit against federal government officials, charging that their actions violated the United States Constitution and other federal laws. See Benevolence Int'l Found., Inc. v. Ashcroft, No. 02 C 763 (N.D. 111. filed Jan. 30, 2002). On March 26, 2002, BIF filed a motion for preliminary injunction seeking the return of its seized assets and a lifting of the blocking order. This motion included a supporting memorandum and several exhibits, one of which was an unsworn declaration signed by Arnaout "under penalty of perjury." On April 5, 2002, BIF filed a corrected

WITHDRAWAL NOTICE RG: 148 Box: 00002 Series: Copies: 1

Folder: 0005 Document: 1 Team 4 Files Pages: 36 ACCESS RESTRICTED

The item identified below has been withdrawn from this file: Folder Title: U.S. v Arnaout (BIF) Document Date: 04-29-2002 Document Type: Legal Document Special Media: From: To: Subject:

document filed under seal

In the review of this file this item was removed because access to it is restricted. Restrictions on records in the National Archives are stated in general and specific record group restriction statements which are available for examination.

NND: 401 Withdrawn: 09-30-2008

by

RETRIEVAL #: 401 00002 0005 1 System DocID: 4660

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U. S. Department of Justice

United States Attorney Northern District of Illinois Patrick J. Fitzgerald United States Attorney

FOR IMMEDIATE RELEASE WEDNESDAY OCTOBER 9, 2002

Federal Building 219 South Dearborn Street, Fifth Floor Chicago, Illinois 60604 (312) 353-5300

PRESS CONTACTS: Randall Samborn, U.S.? Attorney's Office (312)353-5318 ^ DOJ Public Affairs (202) 514-2008

BENEVOLENCE DIRECTOR INDICTED FOR RACKETEERING CONSPIRACY; PROVIDING MATERIAL SUPPORT TO AL OAEDA AND OTHER VIOLENT GROUPS

CHICAGO - The executive director of Benevolence International Foundation, Inc. (BIF), a purportedly charitable organization based in south suburban Chicago, was indicted on racketeering and other charges for conspiracy to fraudulently obtain charitable donations to provide financial assistance to al Qaeda and other organizations engaged in violent activities, the Justice Department announced. A federal grand jury today returned a seven-count indictment against Enaam M. Arnaout, 40, of Justice, 111., a Syrian-born naturalized U.S. citizen. Arnaoiu|has twice been ordered detained in federal custody since he was arrested on April 30. The indictment describes a multinational criminal enterprise that for at least a decade used charitable contributions of innocent Americans - Muslim, non-Muslim and corporations alike - to support al Qaeda , the Chechen mujahideen and armed violence in Bosnia. Arnaout, also known as "Abu Mahmoud," "Abu Mahmoud al Suri," "Abu Mahmoud al Hamawi," and "Abdel Samia," was charged with one count each of racketeering conspiracy, conspiracy to provide material support to terrorists, conspiracy to launder money, money laundering,

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UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION UNITED STATES OF AMERICA vs.

ENAAM M. ARNAOUT

) ) ) No. 02 CR 892 ) Hon. Suzanne B.:«Conlon )

PLEA AGREEMENT This Plea Agreement between the United States Attorney for the Northern District of Illinois, PATRICK J. FITZGERALD, and the defendant, ENAAM M. ARNAOUT, and his attorneys, JOSEPH J. DUFFY and WILLIAM P. ZIEGELMUELLER, is made pursuant to Rule 11 of the Federal Rules of Criminal Procedure. This Plea Agreement is entirely voluntary and represents the entire agreement between the United States Attorney and defendant regarding defendant's criminal liability in case 02 CR 892. This Plea Agreement concerns criminal liability only, and nothing herein shall limit or in any way waive or release any administrative or judicial civil claim, demand or cause of action, whatsoever, of the United States or its agencies. Moreover, this Agreement is limited to the United States Attorney's Office for the Northern District of Illinois and cannot bind any other federal, state or local prosecuting, administrative or regulatory authorities except as expressly set forth in this Agreement. By this Plea Agreement, PATRICK J. FITZGERALD, United States Attorney for the Northern District of Illinois, and the defendant.

UNITED STATES DISTRICT COURT NORTHERN DISTRICT Or ILLINOIS EASTERN DrVTSrON UNITED STATES OF AMERICA

^-

jUN 0 9

)

v. ENAAMM.ARNAOUT

FILED

**/?»

)

No. 02 CR 892

****"*

)

Hon. Suzanne B. Conlon

GOVERNMENTS ALIERNATIVEA1OTTO1S FOR UPWARD DEPARTURE TheUNTTED STATES OF AMERICA, by its attorney, PATRICK J, FITZGERALD, United States Attorney for the Northern District of Illinois, respectfully moves Ihia Court to depart upward at least six levels from die total offense level determined uodcr the US. Sentencing Guidelines ("U.S.S.G.") if the Court finds that the enhancement in U.S.S.G. § 3A1.4 doe* not apply.1 To be clear, the government maintains that § 3 A 1 .4 applies in this case and anticipates that the defendant will challenge the Pre-Sentence Report ("PSR") in this regard . The government is filing this motion consistent with the Court's order that motions for departure be filed by June 9, 2003. IftheCotrrt applies U.S.S.G, § 3 At .4 as the government advocates, then this motion will be moot because § 3A1 .4 adequately addresses the wnceais raised in this motion. However, if (he Court declines to

1 The government has one minor objection to the JPSR, namely, to an error on page 15, lines 505-509. The PSR states there that the defendant entered a plea of guilty six days prior to tfce date trial was scheduled to begin, whan in fact he pled gui Ity on the day trial was scheduled to begin. Moreover, the government does not curreatly object to a wo-level reduction for acceptance of responsibility, as the PSR provides. However, when the PSR was written, defendant acknowledged that the obstruction of justice enhancement applied. Defense counsel informed the government in a letter dated June 7,2003, that defeadant was changing his position on the obstruction enhancement, although the reason for this change is unclear. If defendant now denies that he knowingly submitted two false, sworn declarations to the U.S. District Court in an effort to regain control of BIF's money Munich was blocked pending investigation, among other obstructive conduct, then the government will object to any deduction for acceptance of responsibility. See U.S.S.G- § 3E1.1, Note l(a) ("[A] defendant who falsely denies, or frivolously contests, relevant conduct that the court determines to be true has acted in a manner inconsistent with acceptance of responsibility"*).

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION UNITED STATES OF AMERICA v.

ENAAM M. ARNAOUT, a/k/a "Abu Mahmoud", a/k/a "Abu Mahmoud al Suri", a/k/a "Abu Mahmoud al Hamawi", a/k/a "Abdel Samia"

)

No. 02 CR 892

) ) ) ) )

Violations: Title 18, United States Code, Sections 2, 1341, 1343, 1956, 1962, and 2339A

COUNT ONE The SPECIAL APRIL 2002 GRAND JURY charges: 1.

At all times material to this indictment: RELEVANT ORGANIZATIONS Mekhtab al Khidemat A.

In the latter part of the 1980's, an organization

known as "mekhtab al khidemat"

(the "Services Office") maintained

offices and facilities in various parts of the world, including Afghanistan, Pakistan and the United States.

The organization was

operated principally by Sheik Abdallah Azzam and Usama Bin Laden for purposes including the providing of logistical support to the mujahideen

(fighters)

in Afghanistan.

The

support

provided

included financial assistance for military training as well as assistance

with

obtaining

travel

and

identity

documents

and

immigration status in Pakistan. B. Azzam

Until his death in or about 1989, Sheik Abdallah

continued

to work

with

mekhtab

al khidemat

to provide

FindLow

UNITED STATES DISTRICT COQRT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

WWW.FINDLAW.COM

UNITED STATES OF AMERICA No. 02 CR 892

v.

ENAAM M. ARNAOUT,

a/k/a a/k/a a/k/a a/k/a

"Abu Mahmoud", "Abu Mahmoud al Suri", "Abu Mahmoud al Hamawi", "Abdel Sanaa"

Violations: Title 16, United States Code, Sections 2, 1341, 1343, 1956, 1962, and 2339A

COUNT OMB

The SPECIAL APRIL 2002 GRAND JURY charges: 1.

At all times material to this indictment: RELEVANT ORGANIZATIONS

A,

In the latter part of the 1980' s, an organization

known as "nekhtab al khidemat" (the "Services Office") maintained offices and facilities in various parts of the world, including Afghanistan, Pakistan and the United States. The organization was operated principally by Sheik Abdallah Azzam and Usama Bin Laden for purposes including the providing of logistical support to the mujahideen

(fighters) in Afghanistan.

The support provided

included financial assistance for military training as well as assistance with obtaining

travel and identity

documents

and

immigration status in Pakistan. B.

Until his death in or about 1989, Sheik Abdallah

Azzam continued to work with mskhtab al khidemt to provide •»

logistical and financial support to the mujahideen. After Azzam' s

A. IN THE UNITED STATES DISTRICT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

MICHAEL W. DOBBINS CttftK, U.S. DISTRICT COURT

UNITED STATES OF AMERICA, Plaintiff,

2 7 2003

No. 02 CR 892

Judge Suzanne B. Conion ENAAMM. ARNAOTJT, Defendant DEFENDANT ENAAM M. AKNAOirTS NOTICE OF APPEAL

^

Notice is hereby given that Enaam M Amaout, defendant in the above-entitled case, appeals to the United States Court of Appeals for the Seventh Circuit from the final judgment and sentence entered in this cause on August 18,2003. Date: August 27,2003

Respectfully Submitted, ENA AM M. ARNAOUT

By;

One of His Joseph J. Duffy William P. ZiegelmueHcr ToddJ.Hsugh Stetler & Dufiy, Ltd, 140 S. Deattom Street, Suite 400 Chicago, D, 60603 312-338-0200-phone 312-338-0070-fax

AUG 2 8 2003

ONTTED STATES DISTRICT COURT ,_ NORTHERN DISTRICT OF ILLINOIS v ' ' EASTERN DIVISION , UNITED STATES OF AMERICA v. ENAAM M ARNAOUT

.

) ) )

No. 02 CR 892

)

Hon. Suzanne B. ConJott

SEP 1 2 2003

NQTJCE OF APPEAL Notice is hereby given that the UNITED STATES OF AMERICA appeals to die United States Court of Appeals for the Seventh Circuit from this Court's final judgment and sentence entered on the Clerk's docket on August 19, 2003.

Respectfully submitted, PATRICK, /. FITZGERALD United States Attorney

By: JS P. FLEISSNER Assistant United States Attorney

C.KOCORAS 'Assistant United States Attorney 219 South Dearborn Street, 5th Floor Chicago, Dlinois 60604 (312) 353-5300

CBRTgffCATE Off SERVICE The undersigned attorney, John C. Kocoras, certifies that he is employed in the Office of the United States Attorney for the Northero District of Illinois; that on the Hth day of September 2003 he served a copy of the foregoing NOTICE OF APPEAL via messenger to: Mr. Joseph J, Duffy, Esq. Mr. William P. Ziegclmuclier, Esq. Stetlcr& Duffy Ltd, 140 South Dearborn Street Suite 400 Chicago, Illinois 60603

KOCORAS U.S. Attorney

Tte&sury Designates Benevolence International Foundation and Related Entities

Page 1 of 2

FROM THE OFFICE OF PUBLIC AFFAIRS November 19,2002 PO-3632 Treasury Designates Benevolence International Foundation and Related Entities as Financiers of Terrorism Today the US Treasury designated three entities as financiers of terrorism under Executive Order 13224 and will ask the United Nations to add these names to the list of those whose assets must be blocked by all member nations under UNSCR 1390. The financial accounts of the principal entity, Benevolence International Foundation, were blocked pending investigation in December 2001. The three closely linked but separately incorporated entities designated today are Benevolence International Foundation, Benevolence International Fund (Canada), Bosanska Idealna Futura (Bosnia), and their branch offices. "UN designation of these financiers of terror will cut off their access to the global financial system and strip them of their ability to fund evil," said Treasury Secretary Paul O'Neill. Benevolence International Foundation ("BIF") is a U.S. tax-exempt not-ior-profit organization whose stated purpose is to conduct humanitarian relief projects throughout the world. BIF was incorporated in the State of Illinois on March 30, 1992. Although BIF is incorporated in the United States, it operates around the world, in Bosnia, Chechnya, Pakistan, China, Ingushetia, Russia, and other nations. BIF operates as Benevolence International Fund in Canada and as Bosanska Idealna Futura in Bosnia. Enaam Amaout, BIF's Chief Executive Officer and a member of the Board of Directors, recently was indicted in the United States for operating BIF as a racketeering enterprise and providing material support to organizations, including al Qaida, that are engaged in violent activities. Substantial evidence documents the close relationship between Arnaout and Usama bin Laden, dating from the mid-1980s. An article in the Arab News from 1988, reporting on bin Laden's activities at the "al Masada" mujahideen camp in Afghanistan, included a photograph of Arnaout and bin Laden walking together. In a March 2002 search of BIF's offices, Bosnian law enforcement authorities discovered a host of evidence linking Arnaout to bin Laden and al Qaida. Among the files were scanned letters between Arnaout and bin Laden, under their aliases.

In one handwritten letter, bin Laden indicates that Arnaout is authorized, to sign on bin Laden's behalf. I "- i t \s documents also established that Arnaout work members of al Qaida - to purchase rockets, mortars, rifles, and offensive and defensive bombs, and to distribute them to various mujahideen camps, including camps operated by al Qaida. Arnaout claimed to the Chicago Tribune last winter that he did not know bin Laden personally, that he had never been to the "al Masada" camp (at which he had been photographed walking with bin Laden), and that he was working in a restaurant in the Persian Gulf area during the relevant time frame. BIF's counsel later acknowledged in court that "it would appear that the nature of [Arnaout's] contacts [with bin Laden] may have been of a deeper nature than what he described to the Tribune."

http://www.ustreas.gov/press/releases/po3632.htm

6/20/03

, #10-09-02: Prepared Remarks of Attorney General John Ashcroft - Press Conference

Page 1 of 3

Prepared Remarks of Attorney General John Ashcroft Press Conference Chicago, Illinois October 9, 2002 (Note: The Attorney General Often Deviates From Prepared Remarks) Good afternoon. This afternoon, in the United States District Court for the Northern District of Illinois, a grand jury indicted the director of the Illinois-based Benevolence International Foundation. Enaam Arnaout is charged with conspiracy to obtain fraudulently charitable donations in order to provide financial assistance to al Qaeda and other organizations engaged in violence and terrorism. The grand jury charges Arnaout with operating Benevolence International Foundation as a racketeering enterprise. Benevolence International Foundation, or BIF, is a tax-exempt, purportedly charitable organization with offices in Illinois, Pakistan, Bosnia-Herzegovina, and elsewhere. The indictment charges that Arnaout operated BIF for more than a decade in order to use fraudulently the charitable contributions of Muslim-Americans, U.S. Corporations, and other donors to support terrorism and other violence overseas. The grand jury charges Arnaout with seven counts: • One count of conspiracy to engage in a racketeering enterprise. • One count of conspiracy to provide material support to terrorists. • Two counts of money laundering. • Two counts of mail fraud, and ~/c

• One count of wire fraud.

>k !

If convicted of these crimes, Arnaout will face a maximum punishment of 90 years in prison without the possibility of parole. Arnaout is accused of defrauding charitable contributors by falsely claiming that the Benevolence International Foundation used donated funds solely for humanitarian relief. In fact, funds were being used to support al Qaeda and other groups engaged in armed violence overseas. In addition, in an effort to conceal donors who knowingly supported terrorism, Arnaout is charged with commingling charitable contributions intended for humanitarian purposes with contributions intended to support armed violence. In order to deceive donors, and to guarantee the success of his operation, Arnaout is charged with concealing at all times from the government, the general public and a considerable number of donors his relationships with al Qaeda, its

http://www.usdoi.gov/ag/speeches/2002/100902agremarksbifmdictment.htm

6/20/03