Oregon Charity Founder Convicted of Tax Charges

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Date: 
September 15, 2010

 

Updated Oct. 5, 2010: On Sept. 10, 2010, a federal jury convicted the co-founder of the Al-Haramain Islamic Foundation of money-laundering and tax evasion charges. Prosecutors say Pete Seda used the group, shut down by the Department of Treasury (Treasury) in 2004, to smuggle money to Chechen rebels fighting in Russia. Seda’s sentencing is scheduled for Nov. 23 and he faces up to eight years in prison. His lawyers said he will appeal. On Sept. 23, 2010 Seda's attorneys filed a motion for a new trial, citing fairness problems during the trial. 

Seda had been charged with conspiracy to defraud the U.S. government and filing a false return with the Internal Revenue Service (IRS). Prosecutors say Seda conspired in March of 2000 to launder $150,000 from an Egyptian doctor through Al-Haramain to Muslim revolutionaries in the Russian republic of Chechnya.  Seda’s attorneys say the money was a charitable donation that his accountant forgot to disclose on the charity’s tax forms.
 

Seda and the charity have drawn intense scrutiny from the U.S. government. In 2004, Treasury listed both the Ashland, OR chapter of Al-Haramain and its parent organization in Saudi Arabia as terrorist groups. Subsequently, the Ashland branch's assets were seized and the charity was effectively closed. A federal judge ruled in 2008 that the charity's constitutional right to refute Treasury’s designation had been violated.

Additionally, lawyers for the charity sued the government for wiretapping their phone conversations without a warrant. A federal appeals judge ruled in May 2010 that those wiretaps violated the law.  Al Haramain has proposed that “that in lieu of a transfer of those damages (and likewise compensatory damages) into AHIF's block account the Court shall order their cy pres distribution to one or more other charitable organizations whose missions are 'consistent with the nature of the underlying action.” 
 
The motion for new trial asks the trial court to "take a step back from the proceedings and individual rulings that have been made and consider the cumulative impact of the manner in which the case proceeded, particularly: 1) the cumulative prejudicial impact of the government focus on Islam, terrorism, and anti-Semitism in a case that is charged as essentially a tax case," and review specific rulings on the evidence.  The motion also alleges appeals to prejudice, including anti-Islamic statements and actions.
 
A native of Iran, Seda has been a naturalized U.S. citizen for 16 years, attended Southern Oregon University and had lived in Oregon for almost 25 years.   Friends of Seda, including a Rabbi who spoke as a character witness during the trial, were surprised by the verdict. Seda’s friend, Dave Berger, said, "He was always law abiding. And there's no doubt in my mind he was not trying to do something wrong.”

 

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PDF icon Seda retrial motion.pdf188.11 KB