One reason, informed sources said,
was that prosecutors, in an unusual step, removed
references to Pakistan from public filings because
of diplomatic concerns.
The alleged weapons buyers
repeatedly said in conversations taped by
authorities that they represented the Pakistani
government and were arranging the purchases for
Pakistani intelligence, the then-Taliban government
of Afghanistan or terrorists.
Many details of the case
have not been made public previously. The
investigation was brought to light by "Dateline
NBC," which shared some material, including
undercover audiotapes, with The Washington Post and
is scheduled to air its report tonight.
Lawyers for the two men
arrested in the sting said their clients have no
connections to terrorists or arms dealers, and
became involved only when approached by a U.S.
government informant.
"None of those people who
came over from Pakistan were government officials
who could get an arms deal done," said Jim
Eisenberg, attorney for Mohammed "Mike" Malik, one
of the potential buyers, who remains free and whose
case is sealed.
Val Rodriguez, lawyer for
Diaa Mohsen, the only man in the case currently
imprisoned, said his client also lacked the ties
necessary to arrange a secret arms deal. He
acknowledged, however, that Mohsen "kept trying to
get the connections [the undercover agent] wanted."
However, both Mohsen and Malik, he added, "had
contact with people who knew terrorists."
Asad Hayauddin, spokesman
for the Pakistani Embassy here, said his government
does not "buy weapons on the black market. . . . The
government of Pakistan had nothing to do with this,
so maybe it was rogues."
But the U.S. government is
convinced that the alleged buyers were, in some
fashion, connected to militant groups affiliated
with the Pakistani government. U.S. intelligence
confirmed key parts of the buyers' statements
concerning their affiliations, and a federal
prosecutor attested to that in court hearings.
Teamed up in the sting were
two men who had spent a lifetime deceiving people --
but on opposite sides of the law.
One is Randy Glass, 50,
an admitted lifelong fraud artist from Baltimore.
Once he found himself charged with bilking jewelers
out of $6 million, Glass volunteered to track down
arms merchants for the federal government.
The other is Dick Stoltz,
56, an easygoing, 31-year veteran of the ATF who has
a legendary reputation for working undercover as a
gun smuggler or Mafia hit man for years at a time.
For 2-1/2 years, this pair
posed as illegal dealers hawking arms purportedly
diverted from U.S. military armories, and made 500
audio- and videotapes of their eager customers.
Fourteen months ago, ATF and FBI agents in Florida
arrested two men from Jersey City, N.J. -- Mohsen,
originally from Egypt, and Malik, an immigrant from
Pakistan -- moments after showing them a new
shipment of arms.
Some federal officials were
frustrated that the FBI, while allowing a Florida
agent to work on the probe, did not declare the case
a counterterrorism matter. That would have given ATF
officials better access to FBI information and U.S.
intelligence from around the world, and would have
drawn bureaucratic backing from people all the way
to the White House, officials said.
"Had more attention been
paid to this inside the government, the case agents
in the trenches would have had more information on
who these Pakistani people on U.S. soil were," said
Stoltz, who is now retired. "It would have steered
us in other directions, and possibly justified
continuing the investigation. . . . We couldn't
understand why this wasn't treated as a national
security matter."
An FBI official said the
case "was handled appropriately," but acknowledged
that some FBI agents believed that officials in FBI
headquarters "could have been more aggressive."
After the Sept. 11 terror
attacks, the FBI and the ATF decided to take another
look at the Pakistani figures who tried to acquire
the weapons, in the hope of making additional
arrests and learning more about their possible links
to terror.
The story began with Glass,
a former jeweler in Boca Raton, Fla., who had been
arrested at least 10 times since his teenage years,
mostly for small thefts and frauds. His only stretch
in jail was one year in the 1980s, for misdemeanor
possession of cocaine.
In 1996, after his fourth
wife turned state's evidence, Glass was indicted in
Florida on federal charges of cheating jewelry
wholesalers from Antwerp to Toronto out of $6
million.
It seemed a good time to
shift gears, and in the fall of 1998 he called
federal agents and asked whether they were
interested in listening in as he chatted up an old
friend who had spoken to him of an arms deal. The
agents were interested, and on their instructions
Glass called his friend, diamond broker Diaa Mohsen,
to say he had a lucrative business proposition.
Mohsen, a member of
Egypt's national soccer team in the 1960s and a U.S.
citizen for 30 years, flew to Fort Lauderdale
the next day. Wired for sound by agents, Glass
listened as Mohsen said he knew people eager to buy
U.S. weapons, including officials of a government
and "terrorists" who would pay in heroin.
"They use rocket grenades,"
Mohsen said. "They have like 120-millimeter
howitzer."
In the hope that Mohsen
could lead them to big-time arms dealers, ATF
officials arranged for Stoltz to join the team,
posing as rogue arms trader "Ray Spears." The
agency set him up in a Florida warehouse crammed
with supposedly stolen U.S. weapons.
Soon Mohsen was bringing
them his contacts. An Egyptian father-son team
wanted to buy mortars and Stinger missiles -- the
kind used to shoot down aircraft -- for the
Congolese military and later for rebels in the
breakaway Russian province of Chechnya. Both deals
died.
Agents were amazed at the
ease with which they reeled in brokers seeking
Stingers, famed for helping Afghan guerrillas defeat
the Soviet army in the 1980s. "All we had to do was
say 'Stinger,' and they came running," Stoltz said.
Their other secret weapon
was Glass, agents said. While at first Glass wanted
simply to reduce a potentially lengthy sentence, he
threw himself into the case out of patriotic
motives, they said.
"Randy went way beyond what
was required to get a sentence reduction," Stoltz
said. "Most undercover operations take place in a
hotel room or a bar, but I drove these [arms dealer]
subjects to his home in a gated community, with two
maids and yapping dogs and kids. It gave them a
level of comfort," Stoltz added.
As it progressed, the sting
snared a New York investment banker, Kevin Ingram,
who ultimately pleaded guilty to conspiracy to
launder $350,000 that Glass told him was the
proceeds of other arms deals.
Mohsen, meanwhile,
introduced the undercover agents to a friend,
Mohammed "Mike" Malik, a Jersey City deli owner
originally from Pakistan. Mohsen said Malik, in
turn, could connect them to the ultimate buyers, who
Mohsen identified as "the intelligence of Pakistan"
and as people close to Afghanistan's Taliban regime
and al Qaeda founder Osama bin Laden.
Malik met many times with
Stoltz over the next two years, saying that his
clients in Pakistan wanted to buy hundreds of
Stingers, TOW antitank missiles, many varieties of
rockets and artillery, night-vision goggles and even
"heavy water," which can be used to produce
plutonium for nuclear weapons.
Pakistanis who said they
represented the buyers in Islamabad flew to Florida
several times to negotiate with Stoltz. At various
points, Malik and these middlemen said that they
represented Pakistan's spy agency, the
Inter-Services Intelligence (ISI). The ISI, they
said, was seeking weapons for the Pakistani military
and for terrorist groups Islamabad has sponsored in
the disputed Kashmir region along the Indian border.
U.S. officials say that at
least before Sept. 11, elements of ISI and
Pakistan's military worked closely with bin Laden,
the Taliban and Kashmiri terrorists.
At one point, one of Malik's
middlemen arranged for Stoltz to speak by telephone
with a man in Pakistan who he described as a top
Pakistani military procurement officer. U.S.
officials say they are convinced the man holds that
job.
Stoltz said in an interview
that U.S. investigators concluded Malik and the
middleman were "associates of Middle Eastern
terrorists," and had "associations with militants
and arms trafficking groups."
In a closed hearing in May
2000, Assistant U.S. Attorney Neil Karadbil told a
Florida judge reviewing Glass's case that Glass was
helping uncover "an actual deal" involving Pakistani
officials, and that "the individuals that Mr. Glass
has dealt with are essentially terrorists."
In January 2001 Malik and
the middlemen began arranging for $32 million to be
sent to Florida from a bank in Dubai for a series of
arms deals, arrangements U.S. agents confirmed by
electronic eavesdropping. The weapons' destination
"was going to be for Kashmir, or in defense of the
Taliban," one U.S. official said.
The buyers insisted on using
convoluted fund transfer methods that they hoped
would allow them to secure the return of the money
if the deal soured. Weeks of delay resulted -- and
eventually, the frustrated Pakistanis went home.
Suspecting the deal was
dead, agents arrested Mohsen and Malik in June 2001
on charges of trying to export weapons without a
license. But the Pakistani figures had left the
country and were not arrested.
Mohsen pleaded guilty to
trying to export Stinger missiles and night-vision
goggles without a license, and is serving a 30-month
sentence. But Malik remains free, and the resolution
of his case is unclear because documents have been
sealed.
Mohsen is cooperating with
U.S. officials in a continuing investigation of the
Pakistani connection, said Rodriguez, his attorney.
Glass, meanwhile, pleaded
guilty to two counts in connection with his jewelry
fraud case, and served seven months.
"I was a scoundrel for a
long time," he said, "but I got a chance to use my
talents for my country."