A former Titusville resident who ran a U.S.-based Islamic charity accused of aiding al-Qaeda and other terrorist groups was indicted Wednesday by a federal grand jury on racketeering, conspiracy, money-laundering and fraud charges.
Enaam Arnaout, 40, executive director of Benevolence International Foundation Inc. in the Chicago suburb of Palos Hills, Ill., was accused in a wide-ranging indictment of defrauding thousands of donors by secretly supplying money and weapons to terrorists and rebels instead of humanitarian aid to war-ravaged nations.
The charges are the U.S. government's most sweeping action yet against an official of a charitable organization since the war on terror began. "It is sinister to prey on good hearts to fund the works of evil," Attorney General John Ashcroft said at a Chicago news conference. "We will find the sources of terrorist blood money."
Tax returns show that Benevolence raised more than $12.3. million from 1996 to April 2001. Officials did not disclose how much allegedly went for illicit purposes, and the charity itself was not indicted.
Arnaout was charged under federal racketeering laws usually reserved for organized-crime groups and large drug rings. The seven-count indictment alleges that Benevolence and its predecessor organization were part of a criminal enterprise to aid terrorists overseas and that Arnaout was one of its managers providing funds, support and political cover to Afghan rebels and later terrorist groups, including al-Qaeda. If convicted, Arnaout faces up to 90 years in prison without parole.
Matthew Piers, a Chicago lawyer representing the foundation, said that while Arnaout knew Osama bin Laden in the 1980s, he never funded his terrorist network. "They have absolutely no evidence that BIF or Arnaout ever participated in terrorism," he said, adding that the indictment contained "misstatements, guilt by association and attempts to rewrite world history for the last 15 years."
Arnaout is accused of concealing since 1992 that charitable funds were being used to fund violence abroad. Only "certain trusted donors" were aware that money was being sent overseas to fund terror, the indictment said.
Arnaout also is accused since September 1994 of conspiring with others to launder money through bank accounts in Illinois, New Jersey and overseas to fund violence, and of obstructing justice by providing false statements in court that Benevolence never provided aid to terrorists.
He and other alleged co-conspirators are accused of delivering an X-ray machine, money and anti-mine boots to Chechen rebels in 1995,; and helping an al-Qaeda founding member to pose as a Benevolence director in 1998 in Bosnia.
Arnaout fought alongside bin Laden in the 1980s against the Soviet occupation of that country, and government officials said they think he kept working with him through the years. According to an FBI affidavit filed earlier this year, while in Pakistan, Arnaout once picked up one of bin Laden's wives at the Islamabad airport and hosted her for a week at his Peshawar home.
"Arnaout was part of Osama bin Laden's inner circle in Afghanistan in the late '80s," said Rita Katz, director of the SITE Institute, a Washington-based anti-terrorism think tank. "He played a crucial role in the transformation of al-Qaeda from a band of rebels to the international terrorist group that it is today."
Arnaout's connection to Central Florida began in the early 1990s, when he moved to Brevard County, shortly after arriving from overseas with his U.S.-born wife, Nancy Noyes, a nurse. The couple married in in 1989. Titusville neighbors recalled little about Arnaout, other than remembering seeing him dressed in traditional Muslim clothing and carrying religious books.
Arnaout got a Florida driver's license in 1990 and initially lived with his in-laws in Titusville before renting a condominium with Noyes, court records show. Arnaout and Noyes also lived in Croatia during the Balkans conflict in the early 1990s.
By 1994, however, the couple had divorced in Florida, and Arnaout relocated to the Chicago area. His ex-wife could not be reached for comment. A man who answered the telephone at her house said, "We have nothing to say."
According to Ashcroft, Arnaout deceived donors and concealed his relationship with al-Qaeda and bin Laden over during a 10-year period. Arnaout served as a director of communications at an al-Qaeda training camp in Afghanistan in the late 1980s, the government said.
When Benevolence International Foundation's offices in Bosnia were raided in March 2002, international investigators said they retrieved an archive of documents linking Arnaout and the charity to bin Laden and al-Qaeda.
The indictment follows a crackdown on three large Muslim charities that began last fall after the Sept. 11 terrorist attacks. Arnaout, a Syrian-born naturalized U.S. citizen, has been jailed since April 30 when the FBI and the U.S. Attorney's Office in Chicago charged him with perjury for saying he never assisted bin Laden's groups. A judge recently dismissed those charges, but federal prosecutors immediately filed new ones.
Ibrahim Hooper, a spokesman for the Council on American-Islamic Relations, a Washington-based civil-rights group, said the indictment means the government will finally have to make its evidence public. Federal investigators froze the charity's assets last December using secret evidence.
And that, Hooper said, has reduced much-needed aid from reaching overseas.
"That's the problem - all of the legitimate fund-raising organizations have been shut down," Hooper said. "They [Muslims] have been forced not to give or are giving at the local level."
Pedro Ruz Gutierrez can be reached at or 407-420-5620. Jim Leusner can be reached at or 407-420-5411.
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