Dealer Was Aware Airliner Would Be Missile Target, F.B.I. Asserts

By David Johnston and Philip Shenon, The New York Times

WASHINGTON, -- The clandestine meeting between the arms dealer and the prospective buyer of the surface-to-air missile, the government says, took place at a hotel with a commanding view of the runways at Newark International Airport on Sept. 17, 2002, less than a week after the first anniversary of the September 2001 hijackings.

The two watched aircraft take off and land at the nearby airfield, according to an F.B.I. affidavit unsealed today in federal court in Newark. The arms dealer, Hemant Lakhani, a Briton born in India, told the buyer, who was in reality an F.B.I. informant, that he was aware that the shoulder-fired Russian-made missile would be used in an attack against a commercial airliner in the United States, the affidavit says.

Mr. Lakhani also said, according to the affidavit, that he understood the economic harm such an attack would cause the United States. "Make one explosion . . . to shake the economy," he is quoted as telling the buyer, described in the affidavit as "a cooperating witness."

The conversation was one of more than 150 secretly recorded by investigators during an 18-month inquiry that led on Tuesday to Mr. Lakhani's arrest in Newark on charges of trying to sell such a missile to American agents. The missile, one of dozens that the government says Mr. Lakhani was to provide, had in fact been made inoperable by the agents' Russian counterparts in a sting operation, however, and no terrorists were ever actually involved in the plot.

In an earlier meeting in New Jersey, on Jan. 17, 2002, Mr. Lakhani and the buyer discussed Osama bin Laden. According to the affidavit, Mr. Lakhani said Mr. bin Laden had "straightened them out" and had done "a good thing."

At yet another New Jersey meeting, on April 25, 2002, when the buyer told Mr. Lakhani that the missile was intended for a "plane" and would "hit the American people over here," Mr. Lakhani replied that "the Americans are bastards," the affidavit says.

Today Mr. Lakhani, who is 68 years old and lives in North London, was charged in a federal complaint with trying to provide material support to terrorists and trying to sell arms without a license.

Two other men arrested on Tuesday were also identified today. Prosecutors said one was Yehuda Abraham, a 76-year-old jeweler from New York. The other was Moinuddeen Ahmed Hameed, a 38-year-old citizen of India who, the government said, arrived in the New York area on Tuesday from Malaysia.

Court documents said Mr. Lakhani had enlisted Mr. Abraham and Mr. Hameed to help manage the financial arrangements for the arms deal. Both were charged with conspiring to operate an unlicensed money-transmitting business, but neither with any terrorism-related offenses.

All three men appeared in federal court today, Mr. Lakhani and Mr. Hameed in Newark, Mr. Abraham in Manhattan.

Neither Mr. Lakhani nor Mr. Hameed addressed the court at the Newark hearing. Both men were handcuffed, their hands in front of them and chains around their waists.

Mr. Lakhani wore a blue short-sleeve shirt and dark pants. Shortly before the 15-minute hearing began, he was seen animatedly conferring with his lawyer, Donald J. McCauley, a federal public defender who later declined to comment on the case.

After the hearing, Christopher J. Christie, the United States attorney in Newark, told reporters that Mr. Lakhani was a "significant arms dealer" who had promised to deliver missiles "specifically for the purpose of shooting an American commercial airliner out of the sky."

"There is no question that Mr. Lakhani was someone who was sympathetic to the beliefs of the terrorists who were trying to do damage to this country," Mr. Christie said.

American officials said today that it was Russian investigators who first came across Mr. Lakhani, when, they said, he sought suppliers for illegal arms among Russian crime groups. The case was the first undercover terrorism investigation that the United States and Russia worked together, and Larry Mefford, chief of counterintelligence and counterterrorism at the F.B.I., said, "This was an unprecedented example of joint cooperation, and we look forward to building on this success."

In the affidavit unsealed today, the authorities described how American investigators had tracked Mr. Lakhani's activities through the cooperating witness, who, it said, convinced Mr. Lakhani that he was a shadowy middleman for Somali terrorists affiliated with Al Qaeda. That witness is expected to testify when the case goes to trial, but he was not identified in court documents released today.

In addition, the affidavit details how Russian security officers operating under cover fooled Mr. Lakhani into believing that they were black-market suppliers who had sold him a fully functional weapon, which, already made inoperable, was transported by ship from St. Petersburg to the Port of Baltimore and seized by federal agents on Tuesday.

The price for that first missile was $85,000, to be paid in $100 bills, with a $30,000 down payment, the authorities said. But in all, they said, Mr. Lakhani had agreed to provide the buyer 50 missiles at a total price of $5 million. American officials said today that the case was still being investigated in Russia, apparently because of the possibility that Mr. Lakhani might have been close to tapping into an arms pipeline.

As the case shifted to the courts, the debate about the extent of commercial aircraft's vulnerability to missile attack continued today. President Bush said at his Texas ranch that American airliners and airports were safe. "The fact that we were able to sting this guy is a pretty good example of what we're doing in order to protect the American people," Mr. Bush said.

"Today," he added, "the airports are much more secure than they were prior to Sept. 11. America is a safe place for people to fly, because we are working hard to make sure that our homeland security is strong."

But overseas there was new evidence of a threat posed to passenger planes by terrorists. British Airways announced that it had suspended all flights to Saudi Arabia through Sunday because of what the airline described as "heightened security concerns in the region."

Law enforcement officials in the United States, Britain and Saudi Arabia said the airline was responding to the recent arrest of several Muslim militants in Saudi Arabia who were reported to have been plotting to attack a British Airways plane as it took off or landed at the international airport in Riyadh, the Saudi capital, or Jeddah.

The arrests in the United States this week and the reports of further terrorist threats in Saudi Arabia appeared to bring new pressure on the Bush administration to respond to the specter of shoulder-fired missiles.

The House's leading Republican on aviation security, Representative John L. Mica of Florida, said in an interview that it was clear that the government would need to pay to install antimissile devices on at least some passenger planes, and that installation should begin with larger jets flying to international destinations where terrorism is a special concern.

"These terrorists are not interested in shooting down a small Cessna," Mr. Mica said. "You want to cover your larger passenger aircraft. They want to make a splash, whether it's in Kenya, where they've tried before, or in Saudi Arabia or someplace else."

Though he praised the Bush administration for its early efforts to study the problem, Mr. Mica suggested that the government might want to speed up the research and the deployment of antimissile equipment, like flares or electronic jamming devices. "I think we can do this on an expedited basis," he said.

While American officials said Mr. Lakhani was an established arms dealer, his neighbors in North London described him today as a quiet businessman and said they had no knowledge that he might have been involved in arms trading.

The affidavit portrays him much differently. In one conversation in October 2002, it says, Mr. Lakhani told the cooperating witness that although it was not an "easy job" to obtain the missiles, he could get "the merchandise" and that it would be "high-class stuff."

The document also suggests that Mr. Lakhani was aware of the dangers of illegal arms trading, which, it said, he described as more risky since the Sept. 11 attacks. Advising the cooperating witness against placing money directly into Mr. Lakhani's bank account, he said, according to the affidavit: "This business is getting so dangerous. No one has the guts to do it."

"I won't do anything," he added, "if it's risky."

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