FBI affidavit details months of talks that led to arms sting

WASHINGTON — WASHINGTON - The clandestine meeting between the arms dealer and the prospective buyer of the surface-to-air missile, the government says, took place at a New Jersey hotel with a commanding view of the runways at Newark International Airport on Sept. 17, 2002, less than a week after the first anniversary of the September 2001 terrorist attacks.

The two watched aircraft land and take off from the nearby airfield, according to an FBI affidavit unsealed yesterday in federal court in Newark. Hemant Lakhani, a British arms dealer born in India, told the buyer, who was in reality an FBI informant, that he knew the sophisticated Russian-made missile would be used in a terror attack against a commercial airliner in the United States, the affidavit said.


At the meeting, according to the affidavit, Lakhani said that he understood the economic harm such a missile strike would cause the United States: "Make one explosion ... to shake the economy," Lakhani was quoted as telling the buyer, described in the affidavit as a cooperating witness.

The conversation was one of the more than 150 surreptitiously recorded by investigators during the 18-month investigation that led on Tuesday to Lakhani's arrest in Newark on charges of later trying to sell such a missile to American agents. The missile had in fact been made inoperable by the agents' Russian counterparts in a sting operation, however, and no terrorists were ever actually involved in the plot.


According to the affidavit, Lakhani more recently asked for a commitment from his Russian "suppliers" - actually undercover Russian agents working on the sting operation - for 50 more missiles to be sent to the United States by Aug. 30, and also said he was interested in purchasing a ton of C-4 plastic explosive.

In a meeting in New Jersey on Jan. 17, 2002, Lakhani and the buyer discussed Osama bin Laden. According to the affidavit, Lakhani said that bin Laden had "straightened them out" and had done "a good thing."

In yet another meeting in New Jersey, on April 25, 2002, when the buyer told Lakhani that the missiles were intended for a "plane," that would "hit the American people over here," Lakhani replied that "the Americans are bastards," according to the affidavit.

Yesterday, Lakhani, who is 68 years old and lives in North London, was charged in a two-count federal complaint accusing him of trying to provide material support to terrorists and trying to sell arms without a license.

Two other men arrested on Tuesday were also identified yesterday. Prosecutors said one was Yehuda Abraham, a 76-year-old jeweler from New York. The other man was Moinduddeen Ahmed Hameed, a 38-year-old Indian citizen, who arrived in the New York area on Tuesday from Malaysia.

The missile, meanwhile, arrived at the Port of Baltimore from Russia in recent days and was transported to New Jersey, where it is in FBI custody, a federal law enforcement source said yesterday.

The court documents said that Lakhani enlisted Abraham and Hameed to help manage the financial arrangements for the arms deal. Each of them were charged with conspiring to operate an unlicensed money-transmitting business, but neither Abraham nor Hammed was charged with any terrorism-related offenses.

All three men appeared in federal court yesterday, Lakhani and Hameed in Newark, and Abraham in Manhattan. Neither Lakhani nor Hameed addressed the court. Both men were handcuffed with chains around their waists and hands in front. Lakhani, 68, wore a blue short-sleeve shirt and dark pants and was seen animatedly conferring with his lawyer, Donald J. McCauley, shortly before the 15-minute hearing began.


After the hearing, Christopher J. Christie, the U.S. attorney in Newark, told reporters that Lakhani was a "significant arms dealer" who promised to deliver the missiles "specifically for the purpose of shooting an American commercial airliner out of the sky."

"There is no question that Mr. Lakhani was someone who was sympathetic to the beliefs of the terrorists who were trying to do damage to this country," Christie said.

U.S. officials said yesterday that Russian investigators first came across Lakhani when he was seeking suppliers for illegal arms among Russian crime groups. The case was the first undercover terrorism investigation that the two countries worked on together.

Larry Mefford, head of intelligence and counterterrorism at the FBI, said, "This was an unprecedented example of joint cooperation and we look forward to building on this success."

In the affidavit, authorities described how U.S. investigators tracked Lakhani's activities through the cooperating witness who persuaded Lakhani that he was a shadowy middleman for Somali terrorists affiliated with al-Qaida. The cooperating witness is expected to testify when the case comes to trial, but he was not identified in court documents released yesterday.

In addition, the court document details how Russian security officers operating undercover fooled Lakhani into believing that they were black market suppliers who had sold him a fully functional weapon, which was transported by ship from St. Petersburg to the port of Baltimore. The deadly accurate SA-18 missile - in reality a disarmed weapon that could not have fired a missile - was seized on Tuesday.


The price for the first missile was $85,000 with a $30,000 down payment, all of it to be paid in $100 bills. But overall, authorities said, Lakhani had agreed to provide the buyer with 50 missiles at a total price of $5 million.

U.S. officials said yesterday that the case is still being investigated in Russia, apparently because of the possibility that Lakhani might have been close to tapping into an arms pipeline.

While the case shifted to a Newark courtroom, the debate continued about the safety of commercial aircraft and their vulnerability to missile attack. President Bush, at his ranch in Crawford, Texas, said that U.S. airlines and airports were safe.

"The fact that we were able to sting this guy is a pretty good example of what we're doing in order to protect the American people," Bush said.

But there was new evidence yesterday of the threat posed to passenger planes by terrorists possibly trying to obtain shoulder-fired missiles. British Airways announced that it had suspended all flights to Saudi Arabia through Sunday because of what the airline described as "heightened security concerns in the region."

Law enforcement officials in the United States, Britain and Saudi Arabia said the airline was responding to the arrest of several Muslim militants in Saudi Arabia in recent days who were reported to be plotting to attack a British Airways plane as it took off or landed at the international airports in Riyadh, the Saudi capital, or Jeddah.


The arrests in the United States this week and the reports of new terrorist threats in Saudi Arabia appeared to bring new pressure on the Bush administration to respond to the threat of shoulder-fired missiles.

The leading Republican in the House on aviation security, Rep. John L. Mica of Florida, chairman of the transportation subcommittee on aviation, said in an interview that it was clear that the federal government would need to pay to install anti-missile devices on at least some passenger planes.

Sun staff writer Laura Sullivan and the Associated Press contributed to this article.