A former FBI informant who infiltrated a mosque and helped bring in a counterterrorism suspect suffered a blow in trying to sue his former handlers over his alleged mistreatment when the agency cut him loose.

A federal judge issued tentative rulings Thursday against Craig Monteilh, who for more than a year worked to spy on Orange County mosques and helped build a case against an Afghan-born man who prosecutors say has ties to Osama bin Laden.

U.S. District Court Judge James Selna will hear arguments from attorneys Friday on the FBI's motion to dismiss the lawsuit and issue a final ruling.

Selna indicated he would dismiss the lawsuit against the agency and against a supervisor who oversaw Monteilh's operation.

If Selna tosses Monteilh's lawsuit, it will be a major setback for the man who claimed he was hung out to dry by his FBI handlers at the end of a sensitive counterterrorism operation he said was dubbed "Operation Flex."

Monteilh, a 48-year-old former fitness instructor with a criminal past, provided information in the case against Ahmadullah Niazi, who was arrested in February 2009 on suspicion of lying about ties to terrorist groups on his application to become a U.S. citizen and other papers.

Monteilh claims FBI agents spent months instructing him to pretend to be a half-French, half-Syrian Muslim convert and secretly film and record dozens of worshippers at mosques, including the Islamic Center of Irvine.

In court papers, Monteilh said he worked for the FBI for 15 months in 2006 and 2007 and his level of involvement in the surveillance operation grew until he led prayers and made $11,200 a month for his spying.

But things turned sour when the Irvine Police Department accused him of scamming two women out of more than $157,000 by getting them to give him money to invest in human growth hormones and supplement sales.

Monteilh claimed he was in fact working on behalf of an FBI drug task force and was instructed to plead guilty to grand theft so he wouldn't blow his cover as an informant. The agency disputes that and denies having any part in the scam.

"The FBI absolutely was not involved in directing Mr. Monteilh to defraud anyone," spokeswoman Laura Eimiller said.

Monteilh eventually served eight months in prison in the case.

"It's all about justice for my family. They took me away from my children and my wife for eight long months," Monteilh said.

His attorney, Adam Krolikowski, said if the judge's ruling becomes final, he will appeal and also file an amended complaint against the FBI supervisor.

"The fact of the matter is that Mr. Monteilh is a man who was betrayed by the FBI and he was sent to prison for work that he performed for the FBI," he said.

Aside from suing the agency, Monteilh also has tried to get back at the FBI by working with the American Civil Liberties Union of Southern California as it crafts a lawsuit of its own.

In April, he signed a 28-page declaration detailing his informant work to help the group as it prepares for the lawsuit. That case has not been filed.

"The ACLU of Southern California is deeply concerned about the FBI's use of informants in religious institutions," the ACLU said in a statement. "Mr. Monteilh has given the ACLU information in the course of our investigations, as have dozens of other individuals throughout the region. The ACLU does not now and has never represented Mr. Monteilh in any litigation."

Monteilh has also met with Niazi's defense attorney, Krolikowski said.

Though the FBI has said little publicly about the case, it is scrambling behind the scenes to silence the ex-informant. In recent days, Associate General Counsel Henry R. Felix has asked Monteilh's lawyer to disclose any information he shares with civil rights lawyers representing his former targets and has warned Monteilh a nondisclosure agreement he signed remains in effect.

The unusual case underscores the risks the FBI takes when it relies on outsiders to help build cases in sensitive counterterrorism investigations.

It is not uncommon for informants to feel disillusioned at having worked for the government when investigations end, but it's rare for an informant to turn against the FBI, said Ken Wainstein, former general counsel for the FBI.

"Like any relationships, sometimes the handler-confidential informant relationship can go south," he said.

Monteilh is no stranger to legal woes. The one-time machine operator at a Wonderbread factory has a lengthy rap sheet dating to the 1980s, and a history of evictions and debts for everything from car payments to rent to credit cards.

His brushes with the law accelerated dramatically after a bitter divorce in 2000, when his ex-wife alleged in court papers he had threatened her life, tried to choke her and pulled a gun on her.

In court papers and his ACLU declaration, he says he was asked to work as an informant for local law enforcement in 2004, when he became friendly with some police officers in a local gym. By 2006, he was promoted to the FBI's counterterrorism operations.

Monteilh alleges he gathered phone numbers and contact information for hundreds of Muslim-Americans and recorded thousands of hours of conversation using a device on his key fob or cell phone during his stint with the FBI.

His said his handlers told him to work out with Muslims at gyms, asked him to get codes for security systems so they could enter mosques at night and encouraged him to ask mosque members about "jihad" and supporting terrorist operations abroad.

In June 2007, however, mosque members became suspicious of Monteilh and requested a restraining order, saying that he had spoken repeatedly about engaging in jihad.

A judge granted the order and roughly six months later, the Irvine police arrested him for the steroid case.

Monteilh was released from prison in 2008 and now lives with his second wife in Orange County.


Reporter Thomas Watkins reported from Los Angeles.