Washington, Dec 7: In a major embarrassment to the ISI, US-based Kashmiri separatist leader Syed Ghulam Nabi Fai, today pleaded guilty to federal charges of spying for the Pakistani spy agency and illegally lobbying the Congress to influence the American policy on Kashmir.
Fai, 62, also acknowledged secretly receiving money from the ISI through clandestine routes and causing revenue losses to the US government to the tune of USD 200,000 to 400,000.
Pleading before the US Eastern District Court of Virginia, Fai, head of the Kashmiri American Council (KAC) pleaded guilty and agreed to the charges of federal prosecutors that he received at least USD 3.5 million from ISI between 1990 to 2011.
His sentencing is scheduled for March 9. Fai agreed before the court that he was in direct contact with the ISI officials including the head of its security directorate.
The guilty plea was announced by Neil MacBride, US Attorney for the Eastern District of Virginia. He conceded receiving talking points from ISI regarding what to say and write. He agreed that he received directions from ISI with regard to which specific individuals to invite for KAC conferences.
Fai has consented to forfeit all four bank accounts in his name or in the name of KAC totalling about USD 140,000. He also agreed before the court that he had send to the ISI annual budget of the KAC for approval.
“For the last 20 years, Mr. Fai secretly took millions of dollars from Pakistani intelligence and lied about it to the US government,” said US Attorney MacBride.
“As a paid operative of ISI, he did the bidding of his handlers in Pakistan while he met with US elected officials, funded high-profile conferences, and promoted the Kashmiri cause to decision-makers in Washington.”
“Syed Fai today admitted his role in a decades-long scheme to conceal the fact that the government of Pakistan was secretly funding his efforts to influence US policy on Kashmir,” said Assistant Attorney General Monaco.
Fai continues to be under house arrest till the time of his sentencing. Fai was arrested on spying charges on July 19 and then put under house arrest.
A resident of Fairfax Virginia, an affluent suburb of Washington DC, Fai is the head KAC and claimed to lobby on behalf of the people of Kashmir.
The FBI had arrested Fai for allegedly collaborating with ISI by “clandestinely” funnelling hundreds and thousands of dollars to change the view of American lawmakers on Kashmir.
“The Tax Division is committed to prosecuting any individual who illegally uses the tax-exempt status of charitable entities to promote or conceal federal crimes,” Principal Deputy Assistant Attorney General DiCiccio said in a statement.
“Mr. Fai purposefully hid financial transactions from the US government, with intentions that his scheme to fund lobbying efforts by a foreign government would go unnoticed,” said FBI Assistant Director in Charge McJunkin.
“The FBI will detect and defeat those who attempt to surreptitiously exert foreign influence on our government by using agents who conceal their foreign affiliation.”
“The illegal activity in this case, including tax charges and abuse of charitable organisations, harms all Americans, as we all have to pay our fair share for the government services and protections that we enjoy,” said Internal Revenue Service (IRS) Special Agent in Charge Hammett.
Today, Fai admitted that, from 1990 until about July 18, 2011, he conspired with others to obtain money from officials employed by the government of Pakistan, including the ISI, for the operation of the KAC in the United States, and that he did so outside the knowledge of the US government and without attracting the attention of law enforcement and regulatory authorities.
To prevent the Justice Department, FBI, Department of Treasury and the IRS from learning the source of the money he received from officials employed by the government of Pakistan and the ISI, Fai made a series of false statements and representations, according to court documents.
For example, Fai told FBI agents in March 2007 that he had never met anyone who identified himself as being affiliated with the ISI and, 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, the statement said.
In addition, according to court documents, Fai sent a letter in April 2010 to the Justice Department falsely asserting that the KAC was not funded by the government of Pakistan. Later that year, Fai falsely denied to the IRS that the KAC had received any money from foreign sources in 2009.
In July 2011, Fai falsely denied to FBI agents that he or the KAC received money from the ISI or government of Pakistan. In fact, Fai repeatedly submitted annual KAC strategy reports and budgetary requirements to Pakistani government officials for approval.
For instance, in 2009, Fai sent the ISI a document entitled “Plan of Action of KAC / Kashmir Centre, Washington, DC, for the Fiscal Year 2010,” which itemised KAC's 2010 budget request of USD 658,000 and listed Fai's plans to secure US congressional support for US action in support of Kashmiri self-determination.
Fai also admitted that, from 1990 until about July 18, 2011, he corruptly endeavoured to obstruct and impede the due administration of the internal revenue laws by arranging for the transfer of at least USD 3.5 million to the KAC from employees of the government of Pakistan and the ISI.
According to court documents, Fai accepted the transfer of such money to the KAC from the ISI and the government of Pakistan through his co-defendant Zaheer Ahmad and middlemen (straw donors), who received reimbursement from Ahmad for their purported “donations” to the KAC.
Fai provided letters from the KAC to the straw donors documenting that their purported “donations” to the KAC were tax deductible and encouraged these donors to deduct the transfers as “charitable” deductions on their personal tax returns.
Fai concealed from the IRS that the straw donors' purported KAC “donations” were reimbursed by Ahmad, using funds received from officials employed by the ISI and the government of Pakistan.
An affidavit filed in July had alleged that although the KAC held itself out to be a Kashmiri organisation run by Kashmiris and financed by Americans, it was one of three “Kashmir Centers” that are actually run by elements of the Pakistani government, including ISI. The two other Kashmir Centers are in London and Brussels.
