Terror finance: two high-stakes cases

As soon as the man walked into the Carnival French Ice Cream Shop in Brooklyn, owner Abad Elfgeeh said he felt something was "very wrong."

The stranger wanted to give Mr. Elfgeeh $100,000 to send to a sheikh in Yemen who ran a charity bakery that makes bread for the poor. But the man couldn't explain where he got the money.

"He looked stupid, like he might rob you," says Elfgeeh, who for years has informally helped family, friends, and neighbors send money to Yemen. "I told him to go to Western Union."

The man turned out to be Mohamed Alanssi, an FBI informant who is now recovering after setting himself on fire in front of the White House to protest what he says is the FBI's betrayal of him, a charge investigators deny.

And Elfgeeh, whose home was later searched as a result of an Alanssi tip, is now facing trial for running an illegal money transfer business, a crime that could put him behind bars for 14 years.

Elfgeeh is one of 20 people implicated by Mr. Alanssi, including a prominent Yemeni sheikh, Sheikh Mohammed Ali Hassan al-Mouyad, who was nabbed in a sting operation in Germany. The sheikh is now in jail in Brooklyn on charges that he provided millions of dollars to Al Qaeda and the Palestinian terrorist group Hamas.

At the time case broke in early 2003, it was considered to be the government's biggest domestic terrorism-finance probe. Now as prosecutors prepare for the sheikh's Jan. 10 trial and Elfgeeh's March trial, Alanssi's bizarre behavior and other revelations surrounding the cases offer an inside look at the complexity of following the money trail in the worldwide war on terror - and the difficulty of proving alleged wrongdoing.

Indeed, defense lawyers in the two cases believe they are textbook examples of what can go wrong when law-enforcement authorities rely on unreliable informants and stage risky undercover operations.

But government prosecutors are confident enough in their evidence to move ahead with the cases, despite the questions surrounding the informant Alanssi.

Some outside terror experts, in fact, laud the government for pressing such cases at all, saying they represent "new territory" in the war on terror.

"It's a sign that the war against terrorism is moving to a new level," says Lee Wolosky, former director for transnational threats at the National Security Council under Presidents Clinton and George W. Bush. "What you're seeing now is a focus on something that's really hard to get at - the nonstructured modes of terrorist financing, which means they exist outside of an organized charity."

At the core of the cases is the mysterious and mercurial Alanssi, who told the FBI that he had known Sheikh Mouyad when he had lived in Yemen and that the sheikh regularly supported Islamic terrorists.

Alanssi eventually set up a meeting with Mouyad in Germany with another FBI informant. The second informant pretended to be a former Black Panther who wanted to donate $2.5 million to arm and train Islamist terrorists.

When the three men finally met in a hotel room in Germany, Alanssi asked the sheikh directly if the money would go to arm Islamic fighters. The sheikh talked primarily about feeding the poor and his charity bakery, which he referred to as "the oven." When pressed again about whether the money would finance a holy war, he responded that with God's will he would "work in these fields, as they are my fields."

In their indictment, prosecutors argue the talk of the "charity" and the "oven" were code words for terrorist activities.

Mouyad and his attorney dispute that. They say that Alanssi knew all along the money was for the sheikh's charity bakery. They also contend that Alanssi had coached the sheikh to agree with whatever the donor, the pseudo Black Panther, said to ensure that he would be given the money.

Alanssi, the sheikh's attorneys say, duped not only their client but the FBI as well. Lawyer Howard Jacobs also disputes government assertions that the sheikh had "bragged" to Alanssi about sending $20 million, as well as arms and communications equipment, to Osama bin Laden.

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