The Justice Department has agreed to end its investigation into an international Islamic financial network with ties to the Muslim Brotherhood and a Saudi prince in a settlement in excess of $37 million. You just haven’t heard about it. The Obama Justice Department has declined to release the settlement agreement, or even publicly acknowledge its existence.
Main Justice (H/T Liana) -The Islamic Investment Co. of the Gulf (Bahamas) Ltd., which reportedly has ties to the Muslim Brotherhood, agreed to pay some $37 million to resolve an investigation into whether the firm structured its real estate investments to unlawfully avoid U.S. taxes on them, according to people familiar with the matter.
The first third of the settlement is already paid, these people said.
But the company inked a non-prosecution agreement with the government, which means the deal doesn’t require court approval and isn’t filed in public.
When asked about the settlement earlier this week, Justice Department spokesman Charles Miller said: “I have nothing on this.”
The secrecy of the deal has prompted interest in Congress. Rep. Frank Wolf (R-Va.), chairman of the House appropriations subcommittee that oversees the Justice Department budget and author of legislation that created the National Commission on Terrorism in the 1990s, told Main Justice he planned to ask the department next week to release the documents.
“They’ve got to let this thing out,” Wolf — a persistent critic of the Barack Obama administration Justice Department — said in an interview, referring to the bank’s alleged ties to terrorism financing.
New York lawyer James J. McGuire, who is listed in court filings as a lawyer for the Islamic bank’s corporate parent, did not respond to a voice mail and a message left with his assistant seeking comment.
In a case that has had many strange twists and turns, the mystery surrounding the settlement is only the latest. The saga dates back to 2004, when two former employees of a related firm called Overland Realty Capital, LLC sued the company in state court in Texas and said they were fired for blowing the whistle on fraud.
In 2007 the Wall Street Journal reported that a federal grand jury in Boston was examining whether the firms evaded taxes on complicated real estate deals.
A prosecutor from the Justice Department’s counterterrorism section first handled the case, according to a Wall Street Journal story from that year. But the original terrorism-related probe morphed into the same kind of strategy used to nab gangster Al Capone, who was eventually prosecuted not for the Prohibition-era crime syndicate he ran, but for the easier-to-prove charge of tax evasion.
The firm structured real estate investments through a network of shell companies in offshore tax havens including the Cayman Islands, the Journal reported in 2007. Such structures, while not necessarily illegal, become unlawful when designed primarily to circumvent IRS rules.
While the department is staying mum on the settlement, the company at issue is linked to the royal family in Saudi Arabia, a powerful U.S. ally. It is a subsidiary of Dar Al-Maal Al-Islami Trust, known as DMI Trust, which was founded by Saudi prince Mohammed Al-Faisal Al-Saud.
A Muslim Brotherhood leader, Yassin Qadi, came under investigation in the U.S. for allegedly using a DMI affiliate in the 1990s to transfer money to organizations affiliated with the Palestinian group Hamas and al-Qaeda.
Former Sudanese leader Hassan al-Turabi, an Islamist who gave al-Qaeda leader Osama bin Laden a base in Khartoum in the 1990s, spent a decade on DMI’s board. A spiritual leader of the Brotherhood, Yusuf al-Qaradawi, an Al-Jazeera television show host who has expressed support for suicide bombings, also served as an early DMI adviser.
The settlement was negotiated by the Justice Department’s Tax Division, which has been without a confirmed director since the start of the Barack Obama administration. Obama’s first choice for the job, Mary L. Smith, faced stiff resistance from Republicans for her lack of tax experience. The acting head of the division is a career Justice Department lawyer, John A. DiCicco.