Five relatives of a U.S. citizen suspected of being a senior al-Qaida operative were arrested in California and Utah on charges of defrauding banks of hundreds of thousands of dollars.
The FBI said it was investigating whether any of the money was used to finance Middle East terrorism.
Four of the five defendants — all U.S. citizens or legal residents from Jordan where the family of al-Qaida suspect Shawqi Omar has extensive ties — were arraigned Thursday. The fifth was excused for medical reasons.
Nothing in the indictments ties any of the relatives to a terror network, and federal prosecutors officially referred to the case as a criminal enterprise. But agents are working to determine where all the money went, said Greg Bretzing, a supervisor in the FBI’s Joint Terrorism Task Force in Salt Lake City.
“This is an ongoing investigation. This is nowhere close to being over,” he said.
Loans and mortgages
The FBI said Omar’s relatives netted $327,000 from fraudulent bank loans and bad mortgages in Utah, and Bretzing said some of the money wound up in Jordan with Omar’s relatives.
Omar, a 44-year-old Kuwaiti native with U.S. and Jordanian citizenship, has been indicted in Jordan with Iraq insurgent leader Abu Musab al-Zarqawi in an aborted chemical attack on the Jordanian intelligence agency.
Omar has been held by the U.S. military in Iraq since he was arrested in Baghdad in 2004. He has not been charged in Iraq with any crime, but the U.S. government claims he had bomb-making materials and was harboring an Iraqi insurgent and four Jordanian fighters at the time of his arrest.
In one of the allegedly fraudulent transactions, two relatives are accused of using the same Mercedes-Benz sedan as collateral for loans totaling $80,000 that they failed to repay to two Utah banks, court documents said.
Neither of the two owned the car, which belonged to another family member, according to the documents.
Paul Toller, a Utah First Credit Union vice president, said it loaned $40,000 to Omar’s brother using the Mercedes as collateral.
But Sharif Omar was a used-car dealer who had “borrowed and repaid on other car loans,” and that nothing about the Mercedes-backed loan appeared suspicious, Toller said.
Soon after taking out the loan — which Sharif Omar told a bank officer was for home improvements — he stopped making payments. Investigators contend he gave the $40,000 to a nephew, who included it in a wire transfer to an account in Amman, Jordan.
Sharif Omar, 37, pleaded not guilty Thursday in federal court in Salt Lake City and was released pending trial. If convicted, he faces up to 60 years in prison and $1.75 million in fines on charges of bank fraud and money laundering, a prosecutor said.
Another brother, 42-year-old Bassam Omar, an engineer who owns several Utah businesses, was also indicted. Family members say he was the joint owner of the Baghdad construction company Shawqi Omar was managing at the time of his arrest.
‘Not fair to him or us’
He denied that Shawqi Omar is a member of al-Qaida in an NBC News interview in February. “He is not a terrorist, and it’s not fair to him or us,” he said.
Another of Shawqi Omar’s brothers, who was not indicted, accused federal agents of manufacturing ties between Omar’s alleged terrorist actions and the family’s U.S. business holdings.
“There is no connection,” Gus Omar, who works at one of three Utah car dealerships owned by the family, told The Salt Lake Tribune.