EUGENE — Pete Seda will serve nearly three years in federal prison as a money launderer and tax cheat but not as a financier of terrorism.
U.S. District Judge Michael Hogan on Tuesday sentenced the 53-year-old Seda to 33 months in prison for helping smuggle $150,000 to Saudi Arabia through his now-defunct Al-Haramain Islamic Foundation chapter in Ashland in 2000 and then lying about it on tax forms to cover the crime.
Hogan declined to add about five more years to the sentence after ruling that prosecutors failed to prove the money actually made it to Islamic extremists in Chechnya fighting a mujahedeen, or holy war, against Russia.
"There's no doubt the Chechen mujahedeen was involved with terrorism, but there hasn't been a link to this defendant," Hogan said during an afternoon hearing in U.S. District Court in Eugene.
Hogan also allowed Seda two months more freedom while wearing a GPS tracking device before he must report to federal prison in Sheridan to serve his sentence.
Prosecutors had sought immediate incarceration of Seda, whom they considered a flight risk after he spent nearly three years as an international fugitive hiding in Middle Eastern countries before returning voluntarily in 2007 to fight the charges against him.
"So far, you've done what you have told me you would do," Hogan told Seda. "But don't do something to break that confidence."
Outside of court, a smiling Seda hugged supporters but declined comment at the request of his defense attorneys "because I have a big mouth."
Lead defense attorney Steven Wax said outside of court that his team will appeal Seda's 2010 conviction on money-laundering and tax-fraud charges as well as Tuesday's sentencing.
Wax said he also will ask the 9th U.S. Circuit Court of Appeals to grant Seda his freedom until that appeal is settled, which likely will last longer than the full prison term ordered by Hogan.
Wax said not sentencing Seda as a supporter of terrorism was "significant" in keeping Seda's sentence to less than three years, as well as helping put him in a "far better position" to remain free pending appeal.
Dwight Holton, the U.S. attorney for Oregon, said he was pleased this case, which started in 2003 and contained nearly 550 court filings, was finally over, despite Hogan not adding the terrorism enhancement sought by prosecutors.
"We thought we had proved it, but it's the judge's decision," Holton said. "We respect that decision."
FBI agents traveled the globe in their quest to follow the money trail from Ashland to Saudi Arabia and Chechnya, even enlisting the help of Russia's replacement to the KGB in the case.
"Money is the lifeblood of terrorist organizations," Holton said. "We're trying real hard to cut off that lifeline.
"Shutting down Al-Haramain internationally and here was an essential part of that," Holton said.
Seda, also known as Perouz Sedaghaty, has never been labeled by the government as a supporter of terrorism. However, his Al-Haramain chapter, its parent organization and a co-defendant in the case — a Saudi national named Soliman Al-Buthe — have been labeled supporters of terrorism.
The 9th Circuit on Friday re-affirmed those designations.
Al-Buthe, who lives in Saudi Arabia, where there is no extradition agreement with the U.S., remains wanted here for his role in the money-laundering case.
Al-Buthe and Seda took a $150,000 donation from an Egyptian doctor and turned it into a $12,500 cashier's check and $1,000 traveler's checks at an Ashland bank in June 2000. Al-Buthe then carried that money back to Saudi Arabia without declaring it, in violation of federal law.
The checks were cashed in Saudi Arabia, but the money trail evaporated.
Defense attorneys said the money was meant for charitable work.
Seda then filed a false tax return to hide the crime.
In sentencing Seda, Hogan deemed the acts as "complex and intricate conduct" and that Seda committed obstruction of justice and perjury. Those findings helped nudge Seda's prison term higher than if he'd been sentenced as a run-of-the-mill tax cheat.
Hogan Tuesday also ordered Seda to pay the Internal Revenue Service nearly $81,000 on taxes owed had the return been filed properly.
Seda's case also spawned a separate civil case in which a federal judge in December ordered the U.S. government to pay more than $2.5 million in fees and damages to attorneys representing Al-Haramain because of illegal wiretaps. The attorneys waged a nearly five-year legal challenge to the Bush administration's so-called Terrorist Surveillance Program.
Reach reporter Mark Freeman at 541-776-4470, or e-mail firstname.lastname@example.org.