Two Years in Prison for Conspiracy, Tax Crimes

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Fairfax — A Fair Oaks man was sentenced last week in federal court to two years in prison for secretly conspiring to act as an agent of the Pakistani government in the U.S., without telling federal authorities about this affiliation, as required by law. He is Syed Ghulam Nabi Fai, 62, a U.S. citizen and resident of the Penderbrook community.

He was also punished for tax violations in connection with a decades-long scheme to conceal the transfer of at least $3.5 million from the government of Pakistan to fund his lobbying efforts in America related to Kashmir. He’d pleaded guilty to both these offenses, Dec. 7, 2011, in U.S. District Court in Alexandria, and returned last Friday, March 30, for sentencing.

Fai served as the director of the Kashmiri American Council (KAC), a non-governmental organization in Washington, D.C., that purported to be run by Kashmiris, financed by Americans and dedicated to raising the level of knowledge in the U.S. about the struggle of the Kashmiri people for self-determination.

But according to court documents, the KAC was secretly funded by officials employed by the government of Pakistan, including the Inter-Services Intelligence Directorate (ISI).

“Mr. Fai spent 20 years operating the Kashmiri American Council as a front for Pakistani intelligence,” said U.S. Attorney Neil MacBride. “He lied to the Justice Department, the IRS and many political leaders throughout the United States as he pushed the ISI’s propaganda on Kashmir.”

Furthermore, said James McJunkin, assistant director in charge of the FBI Washington Field Office, “Mr. Fai had a duty to inform the U.S. Government of the finances which he received from Pakistan to fund lobbying efforts. Concealed foreign affiliations can be a significant threat to our democracy, and those who engage in hiding these associations will be brought to justice.”

Fai was arrested July 19, 2011, and during his guilty pleas in December, he admitted in court that, from 1990 until about July 18 of this year, he lied to and defrauded the U.S. government. According to court documents, Fai told FBI agents in March 2007 that he’d never met anyone who identified himself as being affiliated with the ISI. Then in May 2009, he falsely denied to the IRS on a tax return for the KAC that the KAC had received any money from foreign sources in 2008.

#Furthermore, court documents state that, in April 2010, Fai sent a letter to the Justice Department claiming that the Pakistani government didn’t fund the KAC. He also told the IRS that the KAC hadn’t received any money from foreign sources in 2009. Again, in July 2011, Fai lied to the FBI that neither he nor the KAC received money from the ISI or from Pakistan.

But in fact, U.S. authorities say he repeatedly submitted annual KAC strategy reports and budgetary requirements to Pakistani government officials for approval. In 2009, they say, these documents included his plans to “secure U.S. congressional support for U.S. action in support of Kashmiri self-determination.”

Fai also admitted not telling the IRS that, from 1990 until July 18, he arranged for at least $3.5 million to be transferred to the KAC from ISI and Pakistani government employees. Court documents explain that he did so via his co-defendant Zaheer Ahmad, 63 — a U.S. citizen living in Pakistan — plus middlemen (straw donors), whom Ahmad reimbursed with ISI and Pakistani-government funds for their alleged charitable — and therefore tax-deductible — “donations” to the KAC.

So Fai’s sentence last week “sends a strong message that using the tax-exempt status of charitable entities to promote or conceal federal crimes carries heavy consequences,” said Acting Principal Deputy Assistant Attorney General John DiCicco.

Judge Liam O’Grady sentenced Fai to 24 months in prison, followed by three years supervised release. As part of his plea agreement, Fai forfeited $142,851.32 seized from him by the government last July.

Conducting the investigation into this case were the Washington field offices of the FBI and the IRS criminal-investigation division.

Prosecuting it were Assistant U.S. Attorneys Gordon Kromberg and Daniel Grooms; trial attorney John Gibbs of the Counterterrorism Section of the Justice Department’s National Security Division; and Special Assistant U.S. Attorney Allison Ickovic from the Justice Department’s Tax Division. [End of report from Connection Newspapers]

Also, from the website Talking Points Memo:

While the 62-year-old had already pleaded guilty back in December, he argued that his lobbying efforts were not affected by the millions he received from Pakistan’s intelligence agency.

“Because he needed financial resources, Dr. Fai was willing to accept funding from any donor that was willing to contribute as long as there were no strings attached to the receipt of the funds,” his lawyer in a court document ahead of his sentencing.

Fai, the lawyer wrote, “strenuously denies that his advocacy on behalf of Kashmir was ever influenced by the official or private positions supported by the government of Pakistan, or that he acted as an agent of Pakistan, or a mouthpiece for its agenda on Jammu and Kashmir.”

In his own letter to the judge, written in an attempt to secure a probation sentence instead of being sent to prison, Fai maintained that the source of his funding didn’t have an impact on his agenda.

“Since the cause was sacred and I needed financial resources, I was willing to take funds as long as there were no strings attached to them,” Fai wrote in a letter to the judge. “The financial dire straits compelled me to accept funds from any source that was willing to contribute. I was frightened of the disclosure that foreign monies were funding our initiatives. If it were to become public knowledge, it would devastate my credibility.” – Source: Talking Points Memo – April 3, 2012, “‘No Strings Attached’: Man Claims Secret $3.5M From Pakistani Spy Agency Had No Influence” by Ryan Reilly

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