updated 8/1/2006 9:55:49 AM ET 2006-08-01T13:55:49

A jeweler, apparently bent on revenge against his former business associates, was arrested Monday for reporting a bogus plot to bomb the New York subways last Fourth of July, authorities said.

The false report launched an intense and costly terrorist investigation which stretched as far as Israel, as more than 40 investigators conducted 24-hour surveillance and other covert techniques trying to track down fictitious terrorists.

Rimon Alkatri, 34, a native of Syria living in Brooklyn, surrendered Monday after a Manhattan grand jury indicted him on charges of falsely reporting an incident, a crime punishable by up to seven years in prison, according to Manhattan District Attorney Robert Morganthau.

The investigation of the false threat cost well over $100,000 — “resources and man hours that could have been devoted to other areas,” said Chief Phil Pulaski, commander of the NYPD Intelligence Division.

The phony plot came at a time when investigators were pursuing another terrorist plan to bomb the New York subway.

On July 7, authorities said they had thwarted a terrorist plot to flood lower Manhattan by attacking train tunnels under the Hudson River used by tens of thousands of commuters. Eight suspects — including an al-Qaida loyalist arrested in Lebanon and two others in custody elsewhere — had hoped to pull off the attack in October or November, federal officials said.

A call to tip hotline
Monday's indictment alleges that Alkatri, identifying himself as Jose Rodriguez of Israel, called the New York City Police special terrorism tips hotline number last May 30 and reported that he knew of a suicide bomb attack on the New York City subways that was being planned for the July Fourth holiday weekend.

He told investigators that the plot involved five “Arab people,” all Syrians working in the jewelry business, according to Patrick Dugan, chief of the DA’s Rackets Bureau.

The names turned out to be those of five jewelry business associates with whom he’d had a falling out.

In addition to the names, he provided specific details lending credence to his story.

“The specificity of the allegations is what got our attention,” said Pulaski.

Details of fake plot
Alkatri claimed that the conspirators had obtained powder for the bomb attacks by hiding the explosives in hollowed-out jewelry and then importing the jewelry into the United States to a store owned by one of the plotters, Pulaski said.

Authorities said he also told the officer on the hotline that he had overheard two of the fake terrorists talking and that one said, “Everything is ready. You have to, you know, be ready.”

He claimed that the conspirator used the expression, “Allah Akbar,” meaning God is great, Pulaski said.

The detectives were joined by the FBI/NYPD Joint Terrorism task force and Israeli law enforcement in tracing leads and providing information as they raced against the clock to thwart the purported plot.

Two weeks before July Fourth, investigators had identified the potential conspirators, according to Pulaski.

Cooperation with police
The suspected terrorists were extremely cooperative, speaking freely to police and allowing a search of their homes and businesses with bomb sniffing dogs on multiple occasions, a clue they had nothing to hide and perhaps this was a hoax, he said.

One of the people Alkatri accused owns a jewelry wholesale business on Fifth Avenue in Manhattan. Two own jewelry stores in Brooklyn, another is a former owner and one was an employee of a Brooklyn jewelry store.

As the holiday neared, it was became clear that the report was made up, Pulaski said. A common thread emerged from interviews was the name Rimon Alkatri. Police discovered that Alkatri provided police a spurious name and address for himself.

Investigators were unable to trace his phone call because he had used a prepaid cellular phone. He used the phone for only one call, to the hotline, and then threw it away.

The DA will be seeking mandatory sentence of seven years if the defendant is convicted.

Alkatri’s attorney, Samuel Karliner, was not immediately available for comment.

Alkatri’s arraignment was postponed until Tuesday.

Copyright 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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