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Al-Qaida’s four-star financier?

NBC News has uncovered a hole in the U.S. effort to block the flow of funds to suspected terrorist financiers.  NBC’s Lisa Myers reports.
/ Source: NBC News

In the heart of Milan, Italy, home to Europe’s chic and fashionable, stands the Hotel Nasco, a four-star hotel that bills itself as a place of “class and elegance.” What the hotel doesn’t advertise widely is the name of its owner: Ahmed Idris Nasreddin — whom the United States and the United Nations last year branded a terrorist financier.

“We felt very strongly,” says a top U.S. Treasury official, Juan Zarate, “that he had been providing material support, financial support, to al-Qaida.”

That means all Nasreddin’s bank accounts and assets around the world, including the hotel, were supposed to have been frozen 18 months ago.

“The objective,” said former senior U.S. Treasury official James Gurule, “is to shut down those businesses, to take them out of business so that they can no longer facilitate the financing of acts of terror.”

So what should have happened with the Hotel Nasco? “It should have been shut down,” Gurule says. “It should have been shut down. Its accounts should have been frozen, and it should have been shut down.”

But NBC News sent a producer to check into the hotel just last week and found everything operating without any problems.

Zarate, the Treasury official, says his office is aware of the Hotel Nasco. “We are working very closely with the Italian government to make sure that the appropriate actions are taken,” he said.

Still, 18 months after the crackdown on Nasreddin, the United States still has not listed the hotel among his assets to be frozen. In fact, officials concede the United States learned of the hotel only six-months ago.

Yet, NBC News was easily able to obtain documents in Milan listing Nasreddin as the hotel’s owner. Earlier this year, his company Nasco Business Residence Center signed an agreement with another company, authorizing the other company to manage the hotel.

Hotel Nasco has the same address as four other Nasreddin businesses, some also bearing the distinctive name “Nasco” — as in, Nasreddin Co.

But Zarate says that the case demonstrates how complicated it is to clamp down on terrorist financing. He says he has no doubts that the hotel is owned by Nasreddin but says there are questions about how much control Nasreddin, who lives in Morocco, has over the operation. “It’s a big loophole,” he acknowledged, “a big piece of property.”

Zarate insists that overall sanctions against Nasreddin have been “fairly successful.”

However, a United Nations report issued Monday confirms that while Nasreddin and an associate had their bank accounts frozen, “nothing has been done with respect to any of their other physical or business assets.”

Although Nasreddin has publicly been “designated” as a terrorist, he has not been charged with any crime. He declined an interview, but his son tells NBC his father has no ties to terrorists, has never been charged with a crime and hopes soon to be checked off the terrorist list.

Lisa Myers is NBC News’ senior investigative correspondent, based in Washington.

Aram Roston is an NBC News investigative producer, also based in Washington.