Posted on 07/22/2002 8:35:14 AM PDT by Catspaw
Feds investigate ex-president of Islamic Center
Terrorism task force focuses on possible financial crimes
Bill Morlin
Staff writer
The former president of the Spokane Islamic Center is under investigation by a joint terrorism task force for possible financial crimes.
Hassan Abdul Hadi Mallah, a Palestinian immigrant who became a U.S. citizen in 1988, has been the target of the federal probe for at least seven months, according to his friends and associates.
Besides his financial dealings, the witnesses say investigators asked about Mallah's frequent trips to the Middle East and his vocal support of the terrorist group Hamas.
The witnesses were identified and interviewed by The Spokesman-Review over the past seven months after the newspaper became aware of the investigation.
Mallah could be charged with bankruptcy fraud, wire fraud or other crimes as early as this week, according to law enforcement sources and others tracking the investigation.
The 44-year-old businessman owned a now-defunct office machine company, Spokane Office Concepts, that was hit by an unsolved arson fire shortly before it closed.
Mallah now is involved in an import business, Stone of Jordan, public records show. The business is incorporated in the states of Washington and California.
"As far as we can tell, the company hasn't imported one container of stone from Jordan," said one official. "All we know about are samples."
Mallah's dealings with Stone of Jordan -- raising more than $600,000 from investors throughout the West -- and bankruptcies he filed last year are the primary focuses of the federal probe, interviews revealed.
Mallah did not list his holdings in Stone of Jordan or the sale of his $640,000 house in the Spokane Valley in his personal bankruptcy, as the law requires.
After learning about the federal investigation, Mallah hired Spokane attorney Bevan Maxey for a recent meeting with investigators from the Inland Northwest Joint Terrorism Task Force.
Through his attorney, Mallah declined to answer questions about the investigation. But Maxey said Friday his client knows criminal charges are imminent.
"Mr. Mallah has fully cooperated with this investigation and has tried to address all the concerns in the most appropriate fashion," Maxey said when reached on vacation.
"If there are any monies owed to different individuals, he wants to make sure that they receive whatever it is they're entitled to," Maxey said.
Mallah, well-known in the Muslim community in the Northwest, stepped down last November as president of the Spokane Islamic Center for "personal reasons."
The Islamic Center is one of two mosques in the Spokane area, where an estimated 400 Muslims live.
When he resigned from the mosque leadership, Mallah was soliciting investors for his import company.
After the terrorist attacks of Sept. 11, Mallah made public statements explaining the Palestinian view. He denounced the attacks on the World Trade Center, but also made sympathetic statements about the terrorist group Hamas.
Maxey said "it's piling on" when the task force investigators asked questions about Mallah's sympathies to Hamas or other terrorist organizations.
"Mr. Mallah considers himself a very loyal citizen of the United States," Maxey said.
Being from Jordan, Mallah understands and expresses the Palestinian view in the conflict with Israel, Maxey said.
"I think in the present climate, if any immigrant from the Middle East was involved in any type of federal investigation, I think these same kinds of questions would come up," Maxey said.
Mallah's lawyer said he was aware of a civil suit just filed in Portland and that others may be pending.
The suit alleges Mallah and business partner Mohammad Saeed Rahman, of Portland, sold unregistered securities in the stone-importing business to various investors, many of whom are fellow Muslims.
Stone of Jordan "certificates of investment" are attested "in the name of Allah, the Gracious and Merciful," the documents say.
A Portland attorney who represents two investors said they lost a combined investment of $150,000, which they were told would produce $370,000 in revenue.
The attorney and others familiar with the investment scheme said upwards of $600,000 was collected by Mallah from more than a dozen investors.
Rahman is a licensed securities broker and a senior vice president of First Union Securities in Portland.
Securities regulators in Oregon are investigating whether Mallah and Rahman broke that state's securities laws, said state enforcement chief David Tatman.
"I was the largest investor that he duped along with everyone else," Rahman said of Mallah on Friday when reached at his securities office in Portland.
Rahman, who put his personal loss at $200,000, said it's his opinion that Mallah "is a con man."
"He's admitted to all the investors in Portland that he embezzled the money and will do whatever he can to pay it back," Rahman said.
Rahman said he believes Mallah gave some of the investors' money to his relatives, including some who live in the Middle East.
Rahman has retained attorney Bob Newell, who said Friday he is considering filing suit against Mallah.
"Mr. Rahman never had anything to do with Stone of Jordan other than to invest," Newell said.
Another investor, Daniel Spampinato, of Anaheim, Calif., also said Mallah "screwed me out of a lot of money," but he declined to elaborate or say whether he will file suit.
It's not the first time Mallah's businesses have gotten the attention of criminal investigators.
A fire set by an arsonist caused $120,000 in damage at Spokane Office Concepts in November 1997, public records show.
Two months earlier, another $120,000 loss was reported during a burglary and vandalism at Mallah's office machine business. There were no arrests in either crime.
Similar unsolved crimes, with losses covered by insurance, occurred in 1991 at another business, Star Office Equipment, which Mallah owned, reports say.
Stone of Jordan, according to company documents, was founded in 1997 and was affiliated with Nassar Investment Co., based in Jordan, and Misr El Nour Co., based in Egypt.
On its now-abandoned Web site, Stone of Jordan said it was located at an address in Lake Oswego, Ore., a Portland suburb. But its listed telephone number was in Spokane.
Its Web domain name, jordanstone.com, was listed to Husein Mallah, Hassan Mallah's brother.
Husein Mallah was arrested last November in Spokane on suspicion of being in the United States illegally. He is fighting deportation.
Husein Mallah was listed as the "administrative contact" for Stone of Jordan.
The domain registration also listed another company, Spokane Merchandise Center, located at a rental storage facility in the Spokane Valley.
Hassan Mallah and his former wife, Waunita, owned a house at 2212 S. Steen in the Spokane Valley that they put up for sale for $725,000 in late 2000, real estate records show.
Waunita Mallah surrendered her interest in the home to her husband for $1, signing a quit claim deed on March 8, 2001, two months before the couple divorced for the second time.
On March 30, 2001, Hassan Mallah signed a quit claim, surrendering his interest in a $169,000 home Waunita Mallah bought at 1703 S. Saint Charles Road in the Spokane Valley.
Hassan Mallah sold the lavishly landscaped home on South Steen on June 11, 2001, for $640,000 to Gary Dilley, a warranty deed shows.
But he didn't report the house transaction or his holdings in Stone of Jordan in his bankruptcy filing, those public records show.
Maxey declined comment on possible irregularities in Mallah's bankruptcy, handled by another lawyer.
Waunita Mallah, who has custody of the couple's two teenage children, said last week that she is aware of the federal investigation of her ex-husband.
"It blew us all away," she said. "We are all in shock."
• Bill Morlin can be reached at (509) 459-5444 or by e-mail at billm@spokesman.com
But he was selling STONES? Uh huh.
And I'm most curious about what went up in that unsolved arson fire, too.
He's in deep doo doo, no question about it.
I'll keep and eye on this case & ping you when he's charged. Then we can find out what he's facing.
This is going to be an interesting case, as well as the case of the guy from Detroit who was arrested for having $12 million in fake cashier's checks.
This financial stuff is going get very interesting as it goes from the Canadian border to Mexico and to the East Coast.
They just are not planning more 9/11's, they are involved in all types of scams to raise money for future terrorists acts.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.