Federal prosecutors announced Thursday they have indicted Pete Seda, the head of the Ashland branch of the Al-Haramain Islamic Foundation, on fraud and tax charges.

Seda, also known as Pirouz Sedaghaty and Abu Yunus, and another officer of the foundation, Soliman Hamd Al-Buthe, are part of a three-count indictment for illegally transporting $150,000 to Saudi Arabia.

The indictment, filed in U.S. District Court in Eugene, charges them with conspiracy to defraud the United States, filing a false IRS return for a tax-exempt corporation and failure to file a report of international transportation of currency.

Known locally as a peace activist, Seda has been living in the Middle East since before investigators raided his Ashland residence last February as part of a money laundering and tax evasion case.

The federal grand jury in Eugene, which filed the indictment, did not charge Seda as a terrorist.

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The indictment notes that documents of incorporation filed by Al-Haramain state, "Al-Haramain Islamic Foundation Inc. stands against terrorism, injustice or subversive activities in any form and shall not support any statement or acts of terrorism."

The indictment alleges the money was destined for Chechnyan rebels, who are being supported by Muslim fighters in a jihad, or holy war, to defeat Russian forces.

Last September, the Bush administration designated the Saudi Arabia-based Al-Haramain as a group suspected of supporting terrorism through its only U.S.-based location in Ashland and through a mosque in Springfield, Mo.

The government charges Seda and his foundation with concealing financial transactions "through deceit, craft, trickery and dishonest means."

Seda first started the Al-Haramain branch on Oct. 27, 1997, establishing an account with Bank of America in Ashland. In Dec. 31, 1999, he filed for tax-exempt status, according to the indictment.

In February 2000, the U.S. government alleges an Egyptian donated $150,000 to Al-Haramain in Riyadh, Saudi Arabia, to be sent to Chechnya.

The funds were transferred to an Al-Haramain bank account in Ashland, then converted into 130 $1,000 traveler’s checks by Seda and Al-Buthe.

In addition, Seda purchased a $21,000 cashier’s check from Bank of America in March 2000 payable to Al-Buthe, the indictment states.

Al-Buthe then covertly took the money out of the United States in March 2000, then cashed the $1,000 traveler’s check and cashier’s check at Al Raijhi Banking and Investment in Saudi Arabia, the indictment alleges. It is a violation of federal law to transport more than $10,000 in traveler’s checks out of the country without filing a report with the U.S. government.

The indictment doesn’t specifically charge Seda with money laundering, or specify whether the money ended up in the hands of Chechnyan rebels.

The government charges that Seda, Al-Buthe and the foundation engaged in a conspiracy by failing to fill out paperwork acknowledging the funds were leaving the United States and by filing a false tax return that concealed how the money was transferred. Seda claimed on his tax return that the money had been used to purchase a building in Missouri, rather than being transported out of the country.

If convicted of the allegations, Seda could face up to eight years in prison and Al-Buthe up to 10 years. The indictment seeks $130,000 to be forfeited from the U.S. branch of Al-Haramain.

The IRS, federal Immigration and Customs Enforcement and the FBI were involved in the investigations.

"The system of charitable donations in the United States is built on trust, honesty and integrity," U.S. Attorney Karin Immergut said in a statement. "The Department of Justice has a duty to investigate and prosecute any cases where the trust is abused criminally."

Reach reporter Damian Mann at 776-4476, or e-mail dmann@mailtribune.com