Posted on 09/26/2001 1:16:36 PM PDT by Liz
Kevin Ingram, the former high-flying Goldman Sachs bond trader who was arrested on June 12 in South Florida on money-laundering charges, was snared in a long-running government sting operation that was closing in on a purported Pakistani buyer of advanced and sophisticated military arms, including some with nuclear capabilities, government documents show.
Dangling $32 million worth of Stinger and TOW missiles, parts for Cobra helicopters and machine guns as bait, agents for the F.B.I., the Bureau of Alcohol, Tobacco and Firearms and U.S. Customs made use of an unsavory roster of middlemen and foreign contacts as they struggled to build their case.
But the government failed to identify a Pakistani connection or any other foreign would-be arms customers with possible terrorist links, and instead arrested two small-time Jersey City dealmakers—an Egyptian and a Pakistani—who had tried haplessly for two and a half years to find a buyer for a stash of weapons gathering dust in a Miami warehouse.
Also arrested was Mr. Ingram, the former head of the mortgage-backed securities desks at Goldman Sachs and Deutsche Bank, who has since pleaded guilty to charges that he agreed to launder money purported to be coming from arms sales provided to him by federal agents.
Mr. Ingram’s arrest has now taken on added significance following the events of Sept. 11. Federal agents, seeking to find out more about who perpetrated the terror attacks and to root out any other terrorists, have been questioning and arresting Arab and Pakistani nationals who live in and around Jersey City.
Coming under immediate suspicion have been the two men linked to Mr. Ingram: Egyptian-born Diaa Badr Mohsen, a self-styled entrepreneur and a money-losing business partner of Mr. Ingram’s, and Mohammed Raja Malik, a Pakistani liquor-store owner. Both are from the Jersey City area.
On Sept. 21, federal agents questioned Mr. Mohsen, who has remained in federal custody, at the Palm Beach County Jail about people he might know in Jersey City with possible links to Osama bin Laden, the terrorist leader. According to his lawyer, Mr. Mohsen knows none of the recent bin Laden suspects and has since been moved to a more secure jail site for his own safety.
Mr. Ingram is out on bail, facing sentencing on Nov. 30. He has agreed to testify against Mr. Mohsen and Mr. Malik, who are scheduled to stand trial on Nov. 5 in Miami on arms-smuggling charges. Richard Lubin, Mr. Ingram’s lawyer, denies categorically that his client had any knowledge of Mr. Mohsen’s and Mr. Malik’s intent to export arms abroad. He also denies that Mr. Ingram knew that the money he was laundering supposedly came from arms sales, despite the government’s contention that undercover agents had explicitly told him so.
“There is no connection whatsoever between Kevin and arms sales,” Mr. Lubin says. The F.B.I. has declined to comment on their broader investigation into the activities of Mr. Mohsen and Mr. Malik, and there is no indication that federal authorities are investigating Mr. Ingram as well.
Nevertheless, court papers being filed in preparation for the upcoming trial, as well as conversations with defense lawyers, paint a stranger picture yet of Mr. Ingram and his post–Wall Street crowd.
The story, as laid out in court papers, begins in December 1998, when a small-time Florida diamond dealer named Randy Glass was arrested for fraud. Faced with a 20-year sentence, Mr. Glass made a bid to shorten his time by offering Mr. Mohsen up to A.T.F. agents as an arms smuggler. The A.T.F. was interested and an elaborate sting was set up, with Mr. Glass going undercover to catch Mr. Mohsen—and his alleged contacts—in the act.
Mr. Mohsen seemed an odd target for a federal undercover operation. Short, burly and bald, with a brash dealmaker’s bark, he was born in Egypt and has lived in the United States for more than 30 years. The 57-year-old Mr. Mohsen sees himself as a globe-trotting middleman. He speaks nine languages and has, over the years, brokered a range of mostly middling deals, such as diamonds in Sierra Leone and wheat in Egypt. According to his lawyer, he had never been convicted of arms smuggling.
On Dec. 7, 1998, the 49-year-old Mr. Glass called Mr. Mohsen at his Jersey City home and invited him down to his house in Boca Raton, court papers show. There, Mr. Glass told Mr. Mohsen of his high-level contacts in the military and of his access to surplus military equipment: Stinger missiles, Cobra helicopters and assorted parts, surface-to-air missiles and more. Mr. Mohsen, with his numerous overseas business contacts, would be perfectly placed to find a buyer, Mr. Glass allegedly told him. According to his lawyer, Mr. Mohsen was intrigued on several levels. As a businessman, it looked like a fine opportunity to make a buck. But Mr. Mohsen, an American citizen, also loved the idea of clandestinely selling weapons to U.S. allies abroad.
“It’s just like Oliver North,” he said excitedly to Mr. Glass, according to one person familiar with his case. On Jan. 21, 1999, Mr. Glass drove a van full of inert Stinger missiles to a hotel parking lot at the Meadowlands, court papers reveal. One person familiar with the case said that Mr. Mohsen was thrilled—he grabbed a few missiles, struck a martial pose and had an accommodating undercover agent snap a picture of him.
Off the bat, he mentioned an associate of his in Egypt with solid contacts with the embattled Democratic Republic of the Congo, a source said. But that deal fell through, sources say, when a cease-fire was struck in July 1999.
It was during this time, in early 1999, that Mr. Mohsen was introduced to Mr. Ingram, also a Jersey City resident, through a mutual acquaintance, according to a source familiar with the matter. Up to that point, Mr. Ingram’s life had followed a starkly different track. He’d had a successful eight-year run at Goldman Sachs, then became head of the mortgage-backed securities desk for Deutsche Bank.
But in September 1998, he’d been forced out of that job following a market downturn. He left, however, a rich man: With the help of Jesse Jackson, Mr. Ingram, who is black, negotiated a settlement—from $10 million to $20 million, some speculate—in return for scrapping a wrongful-termination suit. After 11 years on Wall Street, Mr. Ingram—just 43—was now on the hunt for new projects.
He started a bond-trading house on the Internet and invested in a number of Harlem restaurants. And, soon after meeting Mr. Mohsen, he set up a Jersey City–based construction company called B.I.A.—one black, one Italian and one Arab (Mr. Ingram; Rocco Romero, a relative of Mr. Mohsen’s wife; and Mr. Mohsen, who ran the company). Mr. Mohsen led Mr. Ingram into several unsuccessful investment endeavors overseas—a telecommunications project in Somalia, oil in Egypt. In one case, Mr. Mohsen was given $30,000 in cash by Mr. Ingram to explore buying a factory in Egypt. But sources close to Mr. Mohsen say that he was living more off the expense money given to him by Mr. Ingram than from any business gains.
“They were looking to make a quick, tax-free buck,” says one source close to the case. “But none of the deals worked, and the construction company was a sinkhole.” In July 1999, Mr. Mohsen was introduced to Mr. Malik, 52, a Pakistani national who ran a chain of liquor stores in Jersey City.
According to a source familiar with the case, Mr. Malik said he had a connection to sell arms to Pakistan, which until last weekend was subject to a U.S. military-aid embargo because of its ongoing production and deployment of nuclear weapons. According to a government affidavit, Mr. Malik had military contacts abroad. These contacts wanted to know, as well, if the government would accept heroin as a form of payment, the affidavit states.
Mr. Malik and a Pakistani associate, Raja Ghulam Abbas, together with Mr. Mohsen, met with Mr. Glass and undercover federal agents over lunch at the Tribeca Grill in lower Manhattan on July 14, 1999. Mr. Malik and Mr. Abbas were interested in securing 200 to 300 Stinger missiles for their client, court papers show, at a cost of around $32 million.
Mr. Mohsen’s lawyer contends that the clients represented Pakistani military officials. A spokesman at the Pakistani embassy says that Pakistan has no information on the case. In June 2000, Mr. Abbas, a Jersey City businessman, wrote to the chief of general staff of the Pakistani army: “We are now in a position to offer you the complete range of equipment and spares—including Stinger missiles, 1999 version, with latest dedicated night sight; spares for all types of Cobra helicopters; the TOW missile and any miscellaneous items from radar to guns. All for a very attractive package.”
The letter went on to say: “We would like to be of service to you and Pakistan at this critical time and request that you provide us an opportunity to serve our nation.”
At times, a deal seemed close. But the $32 million sale that Mr. Glass and his F.B.I. handlers so desperately sought never went down. Finally, on June 6, Mr. Glass’ handlers at the F.B.I. and the A.T.F. ran out of patience. After two and a half years, it was time to shut down the sting. On June 12, Mr. Mohsen and Mr. Malik were again lured to the Miami warehouse full of arms, and A.T.F. agents swooped in for the bust.
Also on June 6, according to the government’s account, an undercover agent called Mr. Ingram and said he had $2 million coming in from arms sales that he needed laundered. Mr. Ingram got on a plane to Florida. On June 12, he too was arrested as he prepared to fly the cash overseas to London. Law-enforcement authorities would not comment on their interest since Sept. 11 in Mr. Mohsen, Mr. Malik or Mr. Abbas, who remains at large.
“My client was under the impression he was working for military intelligence or the C.I.A.,” said Mr. Mohsen’s lawyer, Valentin Rodriguez. “His goal was to help the government and maybe find some terrorists along the way. The bin Laden connection is the craziest thing I ever heard.”
Richard Lubin, Mr. Ingram’s lawyer, denies that Mr. Ingram was ever aware of Mr. Mohsen’s arms-dealing activities. Certainly Mr. Ingram—though a close friend and associate of Mr. Mohsen—was not around during the arms talks, nor was he known to have contact with Mr. Malik or Mr. Abbas, according to the government’s case.
His primary interest was money-laundering. According to one source close to Mr. Mohsen, when Mr. Mohsen first introduced his partner to Mr. Glass on June 7, 1999, in Florida, he referred to him as his money manager. On June 18, they met again at Mr. Ingram’s offices at the World Trade Center, where Mr. Ingram facilitated a $100,000 transfer for the undercover Mr. Glass.
Two months later, he and Mr. Mohsen met with Mr. Glass and other government agents at Mr. Glass’ Boca Raton residence. “I’m a financial engineer,” he was recorded as saying, and he tried to persuade them to deposit $80 million in an offshore account for him to manage. Let’s see what you can do with $250,000, Mr. Glass and company countered.
Taking their $22,500 commission, Mr. Mohsen and Mr. Ingram celebrated that night at a neighborhood strip bar, spending $3,800 on bottles of Dom Perignon, before retiring for the night on the Ingee, Mr. Ingram’s 44-foot Sea Ray vessel.
It was then that Mr. Ingram brought in the heavy artillery. In January, Mr. Ingram was put in touch with Jesse Jackson through a third party at the Wall Street Project, a Rainbow Coalition—sponsored organization that pushes for increased minority hiring on the Street. A meeting was arranged. In March, Mr. Jackson and Mr. Ingram visited Deutsche Bank headquarters in New York and met with the bank’s then-U.S. chief executive, John Ross.
Traders were shocked at the sight: Jesse Jackson was on the trading floor. Kevin Ingram’s last Deutsche Bank trade, it seemed, would be a monster one. Still, talks dragged on another month before a deal was struck, without Mr. Jackson.
"When Kevin Ingram was fired, it surprised a lot of people, including Reverend Jackson," said a Jackson spokesman, Lou Colasuonno. "Jesse thought that there was more to the situation than performance. His unit was profitable; it seemed as if Deutsche Bank might have had other reasons."
With the exact terms of the deal remain undisclosed, figures thrown around the Deutsche Bank trading floor have gone as high as $20 million. Deutsche Bank declined to comment, and Mr. Mitchell died last December in a plane crash. But Mr. Ingram’s former colleagues are certain a big deal was cut.
"Look, if I am Kevin and I’ve just been promoted to one of the top five positions in the bank, and then, three weeks later, I get fired for incompetency, I would have played it the same way," one former colleague says. "He had enormous leverage. They had just ordained him. Edson Mitchell was dead wrong in firing him …. I would bet that he got at least $10 million. For Deutsche Bank, it was just another cost to getting the merger done."
Mr. Ingram went on to join the Wall Street Project and, according to sources close to Reverend Jackson, made a contribution to Rainbow Push of "around" $100,000. Having thus squared his affairs, Mr. Ingram’s attentions turned elsewhere, and he soon fell out of touch with the Reverend and his organization.
Florida Transactions
While much of this was going on, Mr. Ingram, together with Peter McCarthy, a former Deutsche Bank colleague, started raising money for TruMarkets, which aimed to be a major online-trading platform for institutions to buy and sell bonds. In two years, TruMarkets raised some $30 million from sources that included Morganthaler Ventures, an early seed investor based in Silicon Valley; ex-Merrill Lynch president Herb Allison, who was also a board member; and the blind trust of Mr. Corzine. At the same time, Mr. Ingram began throwing his weight around politically, donating $20,000 to the Democratic Senatorial Campaign Committee.
According to government court papers, this was also the period of Mr. Ingram’s first money-laundering efforts. In June 1999 he showed up at the Turnberry Isle Resort in Aventura, Fla., with Diaa Badr Mohsen, owner of a Jersey City—based construction company and a supposed business partner, the government alleges. At the time, Mr. Mohsen was being tailed by undercover agents as part of a broader investigation into his involvement in an attempt to smuggle arms out of the U.S.
According to the affidavit, an agent held a series of meetings with Mr. Ingram in which he let it be known that he had funds coming in from arms sales that needed to be laundered. Mr. Ingram accepted $100,000 in cash from the agent, pocketed $9,000–his cut–and wrote the agent a check for $91,000, drawn on the account of Ingram Partners L.L.C. at Chase Manhattan bank.
A month later, the same agent met Mr. Mohsen and Mr. Ingram in Boca Raton and gave Mr. Ingram $250,000 in a black carry-on bag, the government alleges. Again, court papers say, Mr. Ingram took his 9 percent fee and explained how he would wire the money to a London account through his own company, Ingram Partners. The papers say Mr. Ingram and Mr. Mohsen took the carry-on bag, got into Mr. Ingram’s yellow 1998 Ferrari Spider and boarded his boat at the Turnberry Isle Yacht Club.
By late 2000, the dot-com crash was having its affect on TruMarkets. It had an office on 33rd Street and a staff of 50, but no profits. In March, the company declared bankruptcy. Mr. Ingram was also forced to pull out of two development projects in Harlem.
Mr. Ingram is one unhappy mufu right now.
"So," says Spike his cellmate, "what you in 'fo?"
"I tried to money launder stinger missiles...but it's not what you think..."
Spike: "Didja you'sn use Tide-y or Gentle Ivory Flakes?"
Fabulous find, Liz. How do you do it?
What's your analysis? Is the REV-rund JACK-sunnnnn up to his bushy eyebrows in this stuff? What would be the reaction of the fickle American public if it were shown that Jackson had somehow aided and abetted our enemies?
Sheer genius, that's all.......
Rev JJ is a money-monger.....guy can smell a buck faster 'n Clinton can spot a bimbo........
He'll do anything for a buck....he knows plenty.
If you read BACKSTORY above - I excerpted it from the whole Ingram dirty deal
story that I posted back in July. Do a search if you want to be fully briefed. It's fascinating.
Ill, care to give me the Cliff Notes on this one?
Suppose you already have a 501c3 which cannot be audited very easily by the IRS, and furthermore that you are protected by a very corrupt administration (and we all know which administration THAT was).
Someone has perfected a shakedown technique with businesses in which they fork over piles of money to a certain organization.
Now, if that money was used to buy arms and sell them to third world thugs at a profit, who would know? Further, if you could get willing accomplices, like Mr. Ingram, to assist in this endeavor, under the cover of business dealings, one could enlarge one's network.
Perhaps this little scenario is why so many third world thugs allow Jesse to "negotiate" for the release of hostages. Perhaps they already know him as their friendly delivery man. Or perhaps he is trading arms for hostages to enhance his presige..
I think this is a reasonable theory. Why was Jackson so desperate to get to Afghanistan? Normal people know you cannot negotiate with the Taliban. ANd anyone with a brain knows that when Bush says "no negotiations," he means it.
This is my Reader's Dogest version, and it is a theory. But I can't think of anything else that makes sense, and the idea that those people were in Jersey City, and then went to Florida, is just a wee bit too coincidental for me.
I tend to agree with ol' larr as much as I hate to admit it, but I think the 501c3s need to be investigated... Not just he ones with Islamic ties but ALL of them, JW included. I'd really prefer that the tax exempts be done away with and then let the groups find out how much support they really have.
I'd really prefer that the tax exempts be done away with and then let the groups find out how much support they really have.Sadly, I am coming to agree with this position.
I say sadly because I really liked the idea behind Bush's faith based initiatives, but with the state of charities right now, they might be more corrupt and wasteful than the federal government, and have even less accountability.
--and here I thought Jesse was just tempted by the offer of a Nobel Peace Prize for a peaceful resolution which was put out earlier this week to President Bush by the Nobel Committee.
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