Federal jury in Oregon convicts Islamic charity co-founder on tax, false return charges

The co-founder of an Islamic charity has been convicted of charges related to helping smuggle $150,000 to Muslim fighters in Chechnya.

Defense attorneys argued that Pete Seda was the leader of a centrist Muslim movement who made friends of local rabbis and ministers but unknowingly ran afoul of U.S. tax law.

But the Oregon jury disagreed Thursday and convicted him on one count of conspiracy to defraud the government and one count of filing a false tax return.

Seda, the co-founder of the U.S. chapter of the Al-Haramain Islamic Foundation in Ashland, Ore., was taken into custody minutes after the jury read its verdict after almost 13 hours of deliberation.

Part of Seda's crime took place when the charity's co-founder, Soliman Al-Buthe, left the country in March 2000 with a donation of about $130,000, allegedly without declaring the amount. Seda, 52, also failed to note the donation on the charity's tax forms.

Al-Buthe, who is in Saudi Arabia, faces the same charges as Seda but cannot be extradited. The original donation in February 2000 of $150,000 from an Egyptian doctor was deposited and converted at an Ashland bank, and the remaining $20,000 remains unaccounted for.

"The verdict is a devastating blow to Mr. Seda and his family," said defense attorney Steven Wax. "We do not believe that it reflects the truth of the charges. We will be pursuing a just result of this case to the highest court in the land, if need be. This fight is not yet over."

Judge Michael Hogan set Seda's sentencing for Nov. 23.

Prosecutors asserted during the trial that there was a darker side to Seda, using documents on his computer's hard drive relating to the plight of Chechnyan Muslim fighters to show he was sympathetic to elements of radical Islam. The prosecutors said the cash Al-Buthe took out of the country was likely broken into smaller amounts and used to fund the Chechnyan fighters.

Seda, 52, shortened his last name from Sedaghaty and adopted the nickname Pete instead of his first name, Pirouz, after moving from his native Iran and attending Southern Oregon University in Ashland. He found widespread support when he helped open a branch of the now-defunct Saudi charity in Ashland to improve the understanding of Islam and relations with Muslims.

Seda became a community fixture, working as an arborist and taking part in local events, including walking a camel down the main street in the Fourth of July parade. A raid on his home, which served as the headquarters of the Al-Haramain chapter, led to an indictment on tax charges while he was out of the country and turned him into an international fugitive.

Seda returned voluntarily with the help of a friend, Portland attorney Tom Nelson, who has been involved with a related legal battle over alleged government eavesdropping on attorneys for Al-Haramain.

After the verdict, plainclothes U.S. marshals stood behind Seda as he hugged his wife, children and attorneys.

As he lingered, one of the marshals stood behind him.

"Sir," the marshal said, "we gotta go."