Syed Ghulam Nabi Fai, 62, a U.S. citizen and resident of Fairfax, Virginia, was sentenced on Friday to 24 months in prison, followed by three years of supervised release, for conspiracy and tax violations in connection with a decades-long scheme to conceal the transfer of proceeds from the government of Pakistan to fund his lobbying efforts in America related to Kashmir. Kashmir is a region claimed by both India and Pakistan.
According to court documents filed with his plea agreement, Fai served as the director of the Kashmiri American Council (KAC), a non-governmental organization in Washington, D.C., that holds itself out to be run by Kashmiris, financed by Americans, and dedicated to raising the level of knowledge in the United States about the struggle of the Kashmiri people for self-determination. But according to court documents, the KAC was funded by officials employed by the government of Pakistan, including the Inter-Services Intelligence Directorate (ISI).
On December 7, 2011, Fai pleaded guilty to a two-count criminal information for violations of the Foreign Agents Registration Act (FARA). Count one of the information charged Fai with conspiracy to: 1) falsify, conceal and cover up material facts he had a duty to disclose in matters within the jurisdiction of executive branch agencies of the U.S. government; and to 2) defraud the Treasury Department by impeding the lawful functions of the IRS in the collection of revenue. Count two of the information charged Fai with endeavoring to impede the administration of tax laws.
FARA requires persons acting as agents of foreign principals in a political or quasi-political capacity to make periodic public disclosure of their relationship with the foreign principal, as well as activities, receipts and disbursements in support of those activities. The FARA Registration Unit of the Counterespionage Section (CES) in the National Security Division (NSD) is responsible for the administration and enforcement of the Act.
U.S. officials’ concern in the case is caused by Fai’s apparent non-disclosure of proceeds provided by foreign sources and his relationship with the government of Pakistan. Fai backed himself into a corner by misrepresenting the source of the funds to the FBI and the IRS on repeated occasions. It is unclear how the investigation against Fai began, but there is also a co-defendant in the case, Zaheer Ahmad, who helped with the transfer of funds from the government of Pakistan to the KAC.
The KAC has issued a statement indicating that it had no knowledge of Fai’s dealings with the government of Pakistan or the ISI, and reasserts itself as a non-governmental organization. Apparently, the U.S. almost designated the KAC as an agent of a foreign government under FARA, but refrained from doing so.
The author of this blog is Erich Ferrari, an attorney specializing in Federal Criminal Defense matters. If you have any questions please contact him at 202-280-6370 or firstname.lastname@example.org.