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.
