/ 15 August 2003

The sting that netted a dealer

Hemant Lakhani was in trouble from the moment he began talking to his American contact in December 2001. This was someone he could talk comfortably with in Urdu and Hindi and someone he clearly thought he could trust.

But in the charge sheet presented against the London businessman, which was published on Wednesday, his contact was identified as a ‘cooperating witness” — or CW — an FBI informant.

Lakhani, it seems, was under the watchful eye of secret service agencies right from the start.

What remains less clear is how much the agencies ‘led him by the nose” into an elaborate sting that ended with his arrest on Tuesday.

Lakhani appears to have bought the missile from an undercover agent in Russia and sold it to another agent in the US.

The documents released this week do not say who first mentioned the subject of buying missiles during those initial discussions. They say only that the FBI informer, ‘under the direction of federal law enforcement officers, began to have conversations with defendant Hemant Lakhani”.

Over the next 20 months, 150 of those conversations, mostly in Urdu and Hindi, were recorded by the FBI.

Whoever raised the issue, Lakhani flew to New Jersey on January 17 2002 to meet the informant and told him he could supply ‘various weapons, including anti-aircraft guns and missiles”.

The FBI informant apparently represented himself as someone interested in buying such weapons, but it is not clear whether he did this before or after Lakhani’s offer. But he said he represented a Somali group who wanted to buy a sample missile and then buy in bulk later.

The conversation passed on to Osama bin Laden (again it is unclear who raised the subject) and Lakhani apparently said that the al-Qaeda leader had ‘straightened them all out” and ‘did a good thing”.

Lakhani does not, however, give the appearance of a seasoned player in the arms trade.

Throughout the prosecution account of the whole saga, he repeatedly comes across as a blusterer, rather too anxious to impress on his contact that he is a ‘serious businessman” capable of getting hold of ‘high-class stuff”.

At the January 2002 meeting, he pulled out a military brochure and the business cards of three employees of a ‘military production company” that is not named in the documents. In a follow-up phone call and at another meeting in a New Jersey hotel, Lakhani confirmed ‘it can be done”. He asked who the buyer was and the FBI informant told him the missiles would be for ‘jihad” against a plane to ‘hit the people over here”. Lakhani seemed to approve.

‘The Americans are bastards,” the prosecution reports him as saying — a line that was euphemistically repeated a thousand times in United States news broadcasts of Wednesday’s court proceedings.

Lakhani wanted to know if the buyer would be interested in 200 missiles. The informant said just one would be enough to be getting on with.

At the beginning of May, Lakhani called his contact again, saying he had met his supplier, although there is no account of him making any trip to Moscow. Over the telephone he read out the capabilities of the missiles he was promising to get hold of — the Igla S, a longer-range version of the SA-18 shoulder-launched anti-aircraft missile.

In mid-May, he followed up the offer by faxing over a brochure advertising the missile. Throughout the rest of the year, the two men continued to negotiate the size and cost of the consignment. They also talked again about its purpose.

When Lakhani asked what the target would be, the informant gestured to the airliners taking off and landing at Newark airport.

According to the charges, Lakhani made it clear that he understood what was intended, saying it would ‘make one explosion … to shake the economy”.

By October last year Lakhani and his business colleague were talking about the details of the deal. The money would be handed over to his New York money man, Yehuda Abraham, a Manhattan gem dealer, through another fixer, Moinuddeen Ahmed Hameed, a Malaysian.

Both were arrested on Tuesday. Hameed appeared in the Newark Federal Court on Wednesday alongside Lakhani, while Abraham made a preliminary appearance before a Manhattan judge.

In a gesture towards caution that now appears absurd in light of how compromised Lakhani’s deal was from the start, he told his contact that Abraham would prove his identity by showing him a dollar bill with the serial number F83616063J.

A down payment of $30 000 was handed over to Abraham in mid-October once the dollar bill had been presented, and the next few months seem to have been taken up with discussion over the payment of commissions and the cover story for the shipment — ‘spare parts for medical facilities” and for a ‘laboratory bench”.

Lakhani said the shipment would be made from St Petersburg.

Quite when Lakhani made his first trip to Russia was not apparent this week but, according to a source familiar with the Moscow end of the investigation, he appeared on the radar screens of Russia’s internal security service, the FSB, in March this year. He clearly did not make a convincing impression.

The source described Lakhani as an ‘idiot”, who ‘apparently went to Moscow in March on the off-chance” he would find something. ‘He was then directed [by persons unknown] to a purported production facility of the system in the Krasnoyarsk region”, the source said.

‘After he made a direct approach to the factory, they informed the FSB, who then took control of the situation,” he said.

According to Russian arms experts, no factories in the Krasnoyarsk region make the Igla system.

According to the court documents presented on Wednesday, Lakhani arranged for his American contact, the FBI informant, to fly to Moscow last month.

On July 14 the two of them met two FSB officers posing as suppliers in a Moscow office, in a meeting that was videotaped.

Halfway through it, the Russians pulled out the sample missile — a specially built, harmless replica. Lakhani apparently picked it up more than once to inspect it, and offered the Russians $70 000 for it.

He was selling it for $85 000 — a small margin for all the trouble he had been to, but ultimately he envisaged a sale of another 50 missiles for $5-million, to be delivered by the end of August.

The four men held two more meetings in St Petersburg over the next two days, at the port where the Russians once more showed Lakhani and the FBI informant the missile, and the crate it would be shipped in. And on July 18 Lakhani showed the Russians bank instructions, on his company letterhead, authorising payment of the $70 000.

The London businessman and his American partner then flew out of Moscow. Lakhani was shadowed constantly by the FBI, according to one source, and spent the next few weeks arranging a last meeting in Newark, where the two men would discuss the larger deal and a $500 000 down payment.

After all that work, the import-export man from the textile business was finally about to hit the big time. —