Prosecutor raises 'Trojan horse' theory in Seda case

EUGENE — Pete Seda's attempt to gain freedom was put on hold for more than two weeks to give government officials the chance to look into his activities abroad the past four years, including his time as a wanted fugitive.

Concluding a daylong hearing Wednesday in Eugene, U.S. Magistrate Judge Thomas Coffin said he would wait until at least Sept. 10 to consider conditions under which Seda could be released on bail while fighting his conspiracy and tax-fraud case involving his defunct Al-Haramain Islamic Foundation chapter in Ashland.

The delay will give federal agents and court officials a chance to learn more about Seda's activities in Iran and Syria since 2003, including the 21/2; years after his 2005 indictment on charges that he helped smuggle $150,000 from Ashland to Saudi Arabia to help Chechen Muslims the government has tied to international terrorism.

In a required pretrial report to court officials, Seda provided little information about his whereabouts and prosecutors questioned whether Seda was truthful that his time abroad was financed through the sale of an Ashland home in 2001.

The delay will give agents a chance to find the last of three passports — two U.S. and one Iranian — which was believed to have been surrendered in Saudi Arabia.

The delay capped a whirlwind hearing delving into Islamic extremism and Seda's possible connections to organizations financing terrorists. It included counterclaims by an expert witness that Seda's personal brand of Islamic faith apparently didn't match some of the extremist literature provided to Al-Haramain from Saudi Arabia and dispensed to Muslim prisoners by Seda.

Coffin hinted in court that he believed he could set a bail and other conditions that could lead to Seda's release from the Lane County Jail — provided Seda becomes more forthright about his comings and goings in the Middle East.

"It seems to me it's possible to fashion conditions that would allow (Seda) to be released," Coffin said. "(But) there's legitimate concerns that the government doesn't know what he's been up to the past four or five years."

Seda, wearing green Lane County Jail clothes and ankle irons, flashed a smiling thumbs-up to a small band of family and supporters as he left the courtroom.

Coffin's words created confidence in Jonah Smith, Seda's son who was present at the hearing.

"It sounds to me like he's being reasonable," Smith said after court.

Smith said raising funds for bail could be a problem, however, "depending upon what the amount is."

Assistant U.S. Attorney Chris Cardani sought to have Seda, 49, jailed without bail as a danger to the community and a possible flight risk while awaiting trial.

Cardani said he didn't believe Seda was necessarily a physical threat to people in Southern Oregon. But the extreme Islamic views of holy war carried in texts distributed by Seda's Al-Haramain chapter starting in the late 1990s could incite violence to Westerners if he continued to work in that arena while released.

"He has connections with very dangerous individuals throughout the world," Cardani said in court.

"We don't know what he's been doing or what he might want to do if he is released," Cardani said. "Questions still beg to be answered."

Cardani even questioned whether Seda's Aug. 15 flight from Germany to Portland for his surrender carried ulterior motives beyond his attorneys' assertions that he returned to fight the charges against him.

In one exchange with Coffin, Cardani said, "The fear is, there may be something that may be a little more to that."

"Are you telling me he's a Trojan horse?" Coffin countered.

"Perhaps," Cardani answered.

Defense attorney Larry Matasar countered that Seda was not a flight risk or a danger, calling Ashland residents Jeff Golden and Caren Caldwell, the assistant minister at the Medford United Methodist Church, as character witnesses.

"I feel very strongly that he's a positive voice in this community," said Golden, a former Jefferson Public Radio talk-show host.

While the Al-Haramain chapter, and Seda's Saudi Arabian partner in it, have been designated as supporters of terrorism, Seda so far has sidestepped that designation.

The case against him, to date, largely has been about alleged tax fraud and money-laundering investigated by the Internal Revenue Service.

In Wednesday's hearing, the government for the first time offered testimony that attempted to link Seda to the promotion of terrorism, radical Islamic views and even Osama bin Laden.

IRS agent Colleen Anderson testified that Seda arranged for an Internet service provider to carry a Web site that at times included messages from what was purported to be Osama bin Laden prior to the Sept. 11 attacks.

Former Ashland resident Daveed Gartenstein-Ross told the court much of what he told the Mail Tribune in a 2006 interview about his time working for the chapter in the late 1990s.

Gartenstein-Ross testified that Seda's chapter preached a radical form of Islam to U.S. prisoners and others, saying Muslims were required to take part in a holy war, or "jihad," against non-Muslims.

Seda knew Al-Haramain chapters throughout the world were suspected to have ties to terrorism, but he did nothing to divorce himself from Al-Haramain, Gartenstein-Ross said.

"I'd love it if Pete would learn the lesson of his involvement with this radical organization," Gartenstein-Ross said. "I like Pete. "¦ At the same time, this organization was teaching radical things, doing radical things.

"I believe he is still in touch with, and sympathetic to, this organization," Gartenstein-Ross said.

But Seda personally indicated that he was steadfastly against terrorism, and Gartenstein-Ross never heard Seda say Muslims should kill non-Muslim "infidels," Gartenstein-Ross said.

"He wasn't a guy who day after day was putting forward radical things," Gartenstein-Ross said.

"I don't know where Pete laid his heart of hearts, but as an organization, we were putting forward a message" for a call to jihad, Gartenstein-Ross said.

Asad Abukhalil, a Middle East expert called by the defense, said some of the literature peddled by Al-Haramain was the kind of "repugnant and fanatic" extremism used to fuel violence and also supported by Saudi Arabia's leading clerics and rulers.

These Saudi interests intentionally supplied their extremist literature free to people like Seda, who in turn mailed copies to more than 1,000 Muslim prisoners throughout the country.

"They don't give anything for free without attaching their religious literature to it," Abukhalil said. "Their kind of religious propaganda is fanatical and harmful.

"This is the work of the Saudi government," he said.

Abukhalil also testified that his cursory reading of Seda's own pamphlet, "Islam Is," does not match the extreme language found in the appendices to the Quran supplied to Seda through Al-Haramain's parent organization in Saudi Arabia.

While the indictment speaks little about terrorism and doesn't charge Seda as a terrorist, some Seda supporters in the courtroom considered it a government smear.

"They're saying he might be a danger, but they haven't charged him with any of this," said Paul Copeland, an Ashland resident and Seda supporter. "It's still only a tax case."

Reach reporter Mark Freeman at 776-4470, or e-mail mfreeman@mailtribune.com.

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