Former Ashland peace activist Pete Seda, accused of tax fraud and money laundering, will have his day in federal court Aug. 30. - AP

United States v. Pete Seda

David Berger sat in a downtown Ashland coffee shop July 3 looking across the table at an old friend, still unable to fathom why one U.S. government witness calls Pete Seda "the smiling salesman for radical Islam."

Seda was in town to watch the Fourth of July parade. The former arborist and Ashland peace activist often walked in the parade with his camel, which he used as a tool for teaching Americans about his Muslim faith.

But the electronic bracelet on Seda's ankle served as a constant reminder that this time he would stay in the shadows, knowing his six years as an accused cog in the financial support of international terrorism will end soon — one way or another.

"I'm very glad, and I think Pete's very glad, that it's all finally coming to an end," Berger says.

The beginning of the end starts Aug. 30 in a Eugene federal courtroom, where Seda goes on trial on charges of money laundering and tax fraud in what the government claims were clandestine efforts to funnel cash illegally through his Ashland-based Al-Haramain Islamic Foundation charity to Muslim rebels in Chechnya later deemed terrorists.

Seda, 52, was indicted on the federal charges five-and-a-half years ago while he was out of the country. He returned as an international fugitive on Aug. 15, 2007, to fight the charges.

Seda's been free under federal supervision ever since, recently living in Portland, as defense lawyers and federal prosecutors slugged it out in court for three years over what jurors could and couldn't hear about the case.

The more than 400 federal court filings read more like a John Grisham novel than a case spearheaded by the Internal Revenue Service.

FBI surveillances. Government raids. Qurans touting Muslim holy war against the United States. Life on the lam in Syria. Illegal government wiretaps. And even some handiwork by Russian spies aiding the FBI.

And through it all are allegations of international terrorism supported by Seda from behind the gates of 3800 Siskiyou Blvd., Ashland, a property long since seized by the government and sold at a U.S. Department of Treasury auction.

"It's a classic 'be afraid of this Muslim' case," says Tom Nelson, an Oregon attorney and friend of a Saudi national named Soliman Al-Buthi, Seda's accused partner in the case.

The crimes alleged against Seda were laid out in an affidavit written by Medford-based IRS Special Agent Colleen Anderson used to obtain a warrant to search Seda's residence in February 2004.

On its face, it reads like a somewhat routine money-laundering case.

An Egyptian doctor in England wired $150,000 to Seda's foundation's bank account in Ashland in February 2000, the affidavit states. In March, Al-Buthi flew from Saudi Arabia to Ashland, where the pair transferred the money into a $21,000 cashier's check and 130 $1,000 traveler's checks that Al-Buthi carried back to Saudi Arabia in violation of federal financial-reporting laws, the affidavit states.

Seda failed to report the donation properly on the foundation's 2000 tax return, the affidavit alleges.

Seda's defunct charity and Al-Buthi, who remains in Saudi Arabia and is not extraditable for trial, have been designated supporters of terrorism by the government. Seda has not.

"This is not a terrorism case, regardless of what the government's going to try to turn it into," says Nelson, a practicing Muslim who said he sees Seda occasionally at a Portland mosque. "Those who really know Pete, those who know how he is, know why they don't have a terrorism case against him."

Seda's defense attorneys and federal prosecutors repeatedly have declined to discuss any aspect of the case.

But in an Aug. 10 evidentiary ruling, U.S. District Court Judge Michael Hogan outlined what evidence involving terrorism likely will enter into the two-week trial and how federal prosecutors intend to use it.

In the ruling, Hogan hinted that prosecutors likely will assert that the pair intentionally smuggled money to aid Chechen rebels and that the false tax statement was done to hide the money flow from authorities and was not a simple accounting mistake.

"Although the court is leery of the need to delve into the international terrorist financing allegedly motivating the conduct of the co-conspirators, the government must prove intent and may introduce its theory to support its case," Hogan wrote.

Likewise, Hogan wrote that Seda's defense likely will attempt to rebuff this theory of nefarious intent by arguing that Seda's motives were peaceful and the financial irregularities not willful.

Hogan at one point labeled this the "peaceful nature theory."

Hogan also wrote of a possible defense theory that Seda's sympathy for Chechen rebels fighting the Russians was fueled not by holy war but by Russian brutality of Chechens — a concern defense documents claim was shared by U.S. officials.

Seda's camp also has argued that it needs jurors to hear such testimony to fight "possible juror perceptions in a post-9/11 world regarding Islam and that context to (Seda's) 'peaceful' interest in Chechnya," Hogan wrote.

Each side has planned to present experts who will slug it out over these topics, court papers show.

The issue of Seda's intent has drawn intense interest among his supporters in Ashland, who say they have seen nothing but a peaceful nature from Seda during his 20-plus years there.

Former radio talk-show host Jeff Golden of Ashland, who had Seda on his show as a guest three times, says even a conviction on financial crimes without the government proving its theory of intent could be a conviction Ashland would accept.

"If a jury convicts him of technical failings in the handling of money, it's hard for me to imagine his Ashland friends would turn against him," Golden says.

Jurors in the trial will hear about the history of jihad, or holy war, against nonMuslims as outlined in the case and in passages of Qurans distributed by Seda's charity.

Jurors also will hear that Seda believed he was under federal surveillance after 9/11 and that he initiated contact with local FBI agents, condemning the attacks and Osama bin Laden during the same time frame his false tax return allegedly was being prepared.

Jurors might also hear limited evidence that Al-Buthi was under watch through the government's Terrorist Surveillance Program, which was part of a recent federal ruling rendering warrantless wiretaps involving this case illegal.

Jurors won't hear that Seda was an international fugitive for two-and-a-half years, hiding out in Syria and other Middle Eastern countries with no extradition treaty with the United States.

Likewise, jurors won't hear any classified evidence in the case, nor will they hear that Russian agents found information about Al-Haramain's funding in Chechnya of a "noncharitable nature," Hogan ruled.

The exclusion was made because Russian agents were not expected to appear and offer a proper foundation for the documents' correct translation to English, court papers state.

One of many witnesses expected to be called is Daveed Gartenstein-Ross, a former Muslim friend who wrote about his time in Ashland with Seda in a book titled "My Year Inside Radical Islam."

Hogan ruled that jurors may hear testimony from Gartenstein-Ross, who in a 2006 Mail Tribune interview called Seda "the smiling salesman for radical Islam." They will not, however, hear the title of his book.

Reach reporter Mark Freeman at 541-776-4470, or e-mail at

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