Sept. 19, 2003 – U.S. Attorney David Nissman tried to dispel concerns about links to terrorist groups on Friday as he announced charges including money laundering, tax evasion, mail fraud and conspiracy against a high-profile V.I. businessman and four other individuals, all of them U.S. citizens of Arab heritage.
A 76-count indictment was handed up by a federal grand jury against Fathi Yusuf, 62, owner of Plaza Extra Supermarkets; Waleed "Wally" Hamed, 41, his brother, Waheed "Willie" Hamed, 38; Maher "Mike" Yusuf, Fathi's son; Isam "Sam" Yousuf, a relative and store manager; and United Corp., which does business as Plaza Extra Supermarkets. It was announced by Nissman on Friday at a press conference in the Ron de Lugo Federal Building on St. Thomas.
Notice to the media of the press conference, but not of its nature, went out on Monday.
The indictment charges that between 1996 and 2001 Plaza Extra reported income of $300 million but failed to report another $60 million on V.I. tax returns. Fathi Yusuf and Waleed Hamed also are accused of filing false gross receipts tax returns.
Fathi Yusuf appeared at an advice-of-rights and detention hearing elsewhere in the de Lugo Building on Friday morning after having been arrested on Thursday along with his son and the Hamed brothers. Magistrate Geoffrey Barnard set bail at $500,000 each for Maher Yusuf and Waheed Hamed. He denied bail to Waleed Hamed and Fathi Yusuf.
Federal prosecutors appearing at the hearing told Barnard the defendants were a flight risk.
Defense attorney Robert King said the investigations that led to the indictments had taken place over two years, and in that time some of the defendants had left the territory and returned, proving they were not a flight risk. King also noted that Fathi Yusuf had raised 10 children in the Virgin Islands, saying that further made it unlikely that he would flee the territory.
Fathi Yusuf and Waheed Hamed were expected to appeal the denial of bail to District Court Judge Thomas K. Moore, according to a knowledgeable source.
Transporting abroad of cash, checks alleged
At the press conference, Nissman described in detail the methods allegedly used by the defendants to defraud the V.I. government of millions of dollars in tax revenues.
He said that each Plaza Extra store had a "cash room" where unreported cash was kept and to which only the defendants and certain other employees had access. The conspirators allegedly sent employees to local banks with the unreported money to purchase cashier's checks, traveler's checks and money orders made out to unrelated individuals or entities.
Nissman said they also used unreported currency to cash checks for Plaza Extra customers. According to the indictment, the checks, amounting to at least $2 million, were then transported by at least two of the defendants, Fathi Yusuf and Waleed Hamed, to Amman, Jordan, to be deposited in bank accounts at the Cairo Amman Bank.
When asked where the money went from there and whether there was any evidence of it having been sent to Al-Qaeda or any other terrorist groups, Nissman replied that it is difficult to get information from foreign governments. And he said he wasn't going to speculate about such possibilities.
In October 2001, a month after the Sept. 11 terrorist attacks on the U.S. mainland, federal and local law-enforcement agents raided the Plaza Extra stores on St. Thomas and St. Croix simultaneously. They were reportedly looking for illegal aliens working in the stores. Fathi Yusuf had pleaded guilty in June 2000 to employing such aliens, and in September 2001 he was sentenced to a month's home confinement and a year's probation for employing three illegal immigrants.
Following the October 2001 raids, rumors ran rampant in the territory about possible links between Yusuf and the Arab terrorists believed responsible for the Sept. 11 attacks.
At the time, "I felt sorry for the defendants," Nissman said on Friday. "I had to go on the radio and say the rumors weren't true." His denial had minimal effect on the stories being bandied about — of tunnels beneath the stores with caches of weapons, of Mohamed Atta working at one of the stores, of millions of dollars being found in safes at Yusuf's businesses.
Nissman said on Friday cash had been found during the October 2001 raids, but it was far from the millions of dollars that rumormongers claimed at the time.
The indictment announced on Friday charges Fathi Yusuf and Waleed Hamed with having smuggled millions of dollars in cash into French St. Martin and of depositing it into accounts at Banque Française Commerciale held by Yusuf, Hamed and Yousuf.
Nissman said he had expressed publicly his concerns about illegal activities moving back and forth between the Virgin Islands and St. Martin, specifically money laundering in St. Martin and the entry of illegal immigrants into the territory via the French dependency, which lies about 100 miles to the east.
Government seeks forfeiture of real estate
Along with charges that the alleged conspirators transported the unreported cash to bank accounts outside the United States, the indictment says they used some of the money to build "expensive residences in the Virgin Islands." Fathi Yusuf has built an enormous pale yellow structure that juts prominently into the skyline along the road commonly known by the same name — Skyline Drive.
If Yusuf is convicted of the charges against him, the monolithic structure could be forfeited, as could up to 12 other pieces of real estate on St. Thomas and St. Croix. The U.S. Attorney's Office also has asked the court to make the defendants pay back the $60 million.
For conspiracy to launder money, the maximum punishment is 20 years in prison and a fine that is twice the amount of the property involved in the laundering scheme.
For mail fraud and money laundering, the maximum penalty in each case is a 20-year jail sentence, a fine of $250,000 and twice the amount of the property involved.
Filing false tax returns carries maximum three-year prison sentence and a $100,000 fine.
Conspiracy to engage in a criminal enterprise and engaging in a criminal activity each carry a maximum penalty of 15 years imprisonment and a fine three times the amount of the property gained from the scheme.
Toward the end of the charging document, it is stated that each of the conspirators agreed that they would commit at least two acts of criminal activity. This is not explained in the document, nor was it mentioned at the press conference.
At the start of the meeting with the media, Assistant U.S. Attorney Azekah Jennings announced that the lengthy indictment document had been posted to a Web site in the interest of saving paper. Thus, no one in the media had read the indictment at the time of the press conference.
Nissman said his office had conducted a series of compliance seminars to educate bank employees about the importance and the legal requirement of reporting suspicious transactions and activity. He said alert bank employees played a role in getting the case against Yusuf and the other defendants started in July 2001 by reporting certain activities of the defendants and their operatives.
According to Nissman, this case is the first indictment for violations of federal tax laws in the Virgin Islands district and resulted from a joint investigation by the FBI and the Internal Revenue Service. Noting the gap of more than two years between those first reports and the indictment, he said: "Sophisticated financial investigations take some time."
After the news conference, he said that he sometimes felt that the process was taking too long. But he give no sign of being deterred by such slow progress from continuing his quest to stop the economic bleeding of the territory's assets caused by the kinds of illegal activities alleged in the indictment.
The charging document for this case as well as tho
se for other indictments announced on Friday may be found here.
Judi Shimel also contributed to this report.
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