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Financial Crimes
05/19/2010

Al Qaeda supporter pleads guilty to supporting terrorist organization

Kansas City man also admits to bank fraud, overseas money laundering

KANSAS CITY, Mo. - A local man pleaded guilty in federal court Wednesday to conspiring to provide material support to al Qaeda. He also pleaded guilty to bank fraud and money laundering. This guilty plea resulted from an investigation conducted by the Heart of America Joint Terrorism Task Force, which includes U.S. Immigration and Customs Enforcement (ICE).

Khalid Ouazzani, 32, of Kansas City, Mo., waived his right to a grand jury. He pleaded guilty May 19 in the Western District of Missouri to a federal information charging him with conspiracy to provide material support to a terrorist organization. Ouazzani also pleaded guilty to charges contained in an indictment returned under seal Feb. 3 by a federal grand jury in Kansas City.

Ouazzani, a native of Morocco and a naturalized U.S. citizen, swore an oath of allegiance to al Qaeda in June 2008. Ouazzani admitted that from August 2007 to February 2010 he participated in a conspiracy to provide material support or resources to al Qaeda.

Ouazzani also admitted he personally provided more than $23,000 to al Qaeda and performed other tasks at the request of and for the benefit of al Qaeda. Ouazzani had conversations with others about various ways to support al Qaeda, including plans for them to fight in Afghanistan, Iraq or Somalia.

"This case reminds us that terrorism can touch even the small towns and communities of our nation," said Gilbert Trill, assistant special agent in charge of the ICE Office of Investigations in Kansas City. "ICE will continue to use all of its resources to protect Americans from terrorist organizations and individuals who support them."

Ouazzani agreed to contribute $6,500 to al Qaeda in August 2007. A co-conspirator, who is not identified in court documents, made that payment on Ouazzani's behalf.

Ouazzani repaid the co-conspirator in November 2007 through a wire transfer to the co-conspirator's bank account in the United Arab Emirates. Those funds came from Ouazzani's sale of his business, Hafssa LLC, doing business as Truman Used Auto Parts, a retail operation that bought and sold used auto parts and cars.

In June or July 2008, Ouazzani also agreed to pay al Qaeda $17,000, which represented his profit from the sale of an apartment in the United Arab Emirates that was owned by Ouazzani and a co-conspirator (who is not identified in court documents).

Bank Fraud Scheme
Ouazzani obtained a $175,000 line of credit commercial loan from Union Bank in April 2007 for Hafssa LLC (Truman Used Auto Parts). Under the terms of the loan, the funds were to be used as working capital for his business. Ouazzani admitted that he submitted false financial information about himself and the company to obtain the loan, and used substantial amounts of the loan proceeds for various personal purposes.

Ouazzani made only about $13,000 in payments on this loan. In September 2008 Union Bank wrote off the loan (then in the amount of $174,028) as uncollectible. On Feb. 11, 2009, Union Bank obtained a civil default judgment against Ouazzani and Hafssa LLC in the amount of $177,001.

Money Laundering
Ouazzani admitted that he used part of the proceeds of the Union Bank loan to purchase an apartment in the United Arab Emirates with a co-conspirator.

On May 23, 2007, Ouazzani caused a wire transfer of $112,830 to be sent to a bank account in the United Arab Emirates. The funds for this wire transfer included funds obtained from the $175,000 Union Bank loan and involved a series of transactions designed to make it more difficult to trace the funds.

Ouazzani used the wire-transferred funds to purchase an apartment in the United Arab Emirates, which he later sold for a profit of about $17,000. Ouazzani requested a co-conspirator to pay this $17,000 to al Qaeda.

Under federal statutes, Ouazzani is subject to a sentence of up to 65 years in federal prison without parole, plus a fine up to $1 million and an order of restitution. A sentencing hearing will be scheduled after the completion of a pre-sentence investigation by the U.S. Probation Office.

This case is being prosecuted by the following: Assistant U.S. Attorneys J. Daniel Stewart, David M. Ketchmark and Brian P. Casey, and Special Assistant U.S. Attorney Alex Menzel of the Western District of Missouri, with assistance from attorneys at the Justice Department's National Security Division, including the Counterterrorism Section. It was investigated by the Heart of America Joint Terrorism Task Force, led by the FBI, with the assistance of ICE and the Missouri Department of Social Services' Division of Legal Services Investigation Section.