NEWARK – A British man arrested on suspicion of smuggling a surface-to-air missile into the U.S. appeared in federal court Wednesday and was charged with trying to aid terrorists.
Hemant Lakhani, an India-born 68-year-old London arms dealer with possible ties to Indian organized crime, was charged with attempting to provide materials to terrorists and trying to sell arms without a license. He was being held without bail.
"This morning, the terrorists who threatened America lost an ally in their quest to kill our citizens," Christopher Christie, U.S. attorney for New Jersey, said during a press briefing following the hearing.
• Raw Data: Complaint Against Lakhani (pdf)
For the first charge, if convicted, Lakhani faces 15 years maximum in prison and a fine of $250,000. For the second charge, he could face 10 years in prison and up to a $1 million fine.
Lakhani was nabbed Tuesday as part of a joint U.S.-Russian-British sting operation at a hotel near Newark Liberty International Airport (search) in northern New Jersey.
Soon afterward, a raid at a jewelry dealership in Manhattan yielded two other suspects, who were arrested on suspicion of money laundering.
"This investigation shows that all agencies of the federal government and our international allies will work together tirelessly to keep innocent people safe," Attorney General John Ashcroft said. "America is vigilant against danger. Justice will be done."
The other two suspects were identified as New York City jeweler and money remitter Yehuda Abraham, 76, and Moinuddeen Ahmed Hameed of Malaysia. Hameed arrived from Malaysia Tuesday to collect an initial $500,000 from the buyer, according to the complaint.
Both were discussed during the hearing, but only Hameed actually appeared in court. Both will be charged with money laundering.
There will be a hearing later in U.S. District Court in Manhattan on Wednesday for Abraham, who did not appear in court in Newark. Abraham faces what is called a "rule 40 hearing," (search) where a suspect being federally prosecuted is moved from the district where he was arrested.
He will appear before the court in New York, then be sent to New Jersey. The detention hearing for both him and Hameed was set for the end of August.
Lakhani was nabbed after agreeing to sell a sophisticated Russian SA-18 Igla missile (search) to an undercover FBI agent posing as a Islamic extremist. Christie said the plot included a plan to sell 50 missiles to potential terrorists.
U.S. attorneys said Wednesday that Lakhani knew exactly what he was doing.
The complaint states that during a recorded meeting at a hotel overlooking Newark airport in September 2002, Lakhani and the undercover agents looked out and gestured at planes taking off.
Lakhani allegedly said he understood the purpose of the sale was so shoot down an aircraft and cause economic harm to the United States to "make one explosion ... to shake the economy."
"There is no question that Mr. Lakhani was someone who was sympathetic to the beliefs of the terrorists who were tying to do damage to our country," Christie said.
Prosecutors said there were more than 150 recordings of conversations during the investigation, including some where Lakhani calling Americans "bastards," referring to the Sept. 11 attacks as a "good thing" and calling Usama bin Laden a "hero."
He had just flown to Newark from London on Sunday to close the deal.
U.S. officials said part of the suspect's sales pitch was that the missile could shoot down Air Force One, the president's personal jet. But sources told Fox News that the U.S. Secret Service (search) never thought it was a credible threat.
FBI and homeland security officials began hearing more than a year ago that the British man was interested in obtaining or selling shoulder-fired missiles on the black market.
The investigation began about five months ago when the Russians passed on to the FBI a tip that the arms dealer was shopping for weapons in St. Petersburg.
British officials, including the MI5 (search) domestic intelligence agency, helped track the man's whereabouts, and all three countries' domestic intelligence services worked together to set up the sting.
U.S. officials made a deal with the Russians to provide a surface-to-air missile to the Briton so that he could sell it to an undercover agent.
The missile, which was inoperable, was built in Russia specifically for the operation and brought to the United States aboard a ship that docked in Baltimore. The investigation included the Bureau of Immigration and Customs Enforcement and the Secret Service.
U.S. officials said they hoped the suspects would lead authorities to other black-market arms dealers.
Sky News' Rachel Amatt reported that British police said Wednesday they searched two sites in London at the request of U.S. authorities pertaining to the Briton's arrest. No arrests were made.
Authorities stressed that no specific, credible threat was connected to the alleged plot.
The sting operation marked "a new stage in cooperation" between the intelligence services of former Cold War (search) foes the United States and Russia, said Sergei Ignatchenko, chief spokesman of the Federal Security Service (search) — the successor of the KGB (search).
"It is the first time such an operation has been carried out since the ends of the Cold War, when our special services acted in confrontation with each other," Ignatchenko said in Washington, the Russian state news agency ITAR-Tass reported Wednesday.
The operation came ahead of a summit expected this fall between President Bush and Russian President Vladimir Putin. Putin has repeatedly said that battling terrorism and arms proliferation are areas where cooperation with the West is crucial.
Concerns about terrorists using shoulder-fired missiles to shoot down commercial airliners increased in November when two SA-7 missiles (search) narrowly missed an Israeli passenger jet after it took off from Mombasa, Kenya.
Officials concluded that Al Qaeda (search) probably was behind the attack.
The Homeland Security Department has asked U.S. high-tech companies to look into developing anti-missile technology for commercial planes.
Critics in Congress say the agency is not moving quickly enough or spending enough on the project.
Sen. Charles Schumer, D-N.Y., is backing a bill introduced by Sen. Barbara Boxer, D-Calif., that calls for outfitting 6,800 U.S. commercial planes with anti-missile defenses.
Florida Congressman John Mica, who chairs the House aviation subcommittee, estimates the proposal could cost up to $1 million per plane.
"The threat facing commercial airliners from shoulder-fired missiles here in the United States is no longer theoretical. The danger of an airliner being shot down by one of these missiles is now staring the Homeland Security Department in the face," Schumer said.
"The fact that DHS is planning to take at least two years to develop a missile defense prototype to outfit the U.S. commercial fleet verges on the dangerous," he added.
Meanwhile, the United States sent experts to domestic airports as well as to airports in Iraq and major capitals in Europe and Asia to determine whether they could be defended against shoulder-fired missiles.
Fox News' Mike Emanuel and Catherine Herridge and The Associated Press contributed to this report.