Suspected terror case becomes fraud probe
3 men ordered held in Michigan
BAY CITY, Mich. -- Three Palestinian-American men who were found with nearly 1,000 cellphones were charged yesterday with federal fraud conspiracy and money laundering after a county prosecutor backed off from terrorism charges filed earlier.
Maruan Muhareb, 18, Adham Othman, 21, and Louai Othman, 23, all of the Dallas area, were charged in Bay City with conspiracy to defraud consumers and telephone providers by trafficking in counterfeit goods. They also were charged with money laundering on suspicion that they used proceeds from the counterfeit cellphone transactions to buy more phones.
Magistrate Judge Charles Binder ordered the men held at least until a detention hearing tomorrow. They were arrested Aug. 11 after buying dozens of cellphones at a
A Michigan prosecutor, Mark E. Reene, had charged the three with collecting or providing materials for terrorist acts, and surveillance of a vulnerable target for terrorist purposes.
But Reene yesterday asked a judge to dismiss those charges.
Nabih Ayad, a lawyer for the three men, called the charges ``outrageous" and accused state and federal officials of ``scratching each other's backs" by shifting jurisdictions.
``This is a clear indication of racial profiling: picking someone up and holding them for days and trying to find something to charge them with," he said. ``It's supposed to be the other way around."
The federal complaint makes no mention of terrorism. It alleges that the three men defrauded consumers, TracFone Wireless Inc., and
Florida-based TracFone sells prepaid cellphones with a limited number of minutes at subsidized prices. It makes money when buyers purchase additional minutes.
The government alleges the men are part of a scheme to buy up phones that Nokia makes for TracFone and then remove TracFone's proprietary software, enabling use of the handsets with any cellular provider. When the phones are altered, they are no longer genuine Nokia products.
People involved in the trade of so-called unlocked cellphones maintain that the practice is legal.
In another case, two men from Michigan were released from jail Tuesday -- the same day a prosecutor in Ohio dropped similar charges against them. They were arrested with a dozen cellphones, passenger lists, and $11,000 in cash during a traffic stop Aug. 8.
Authorities said they found airplane passenger lists and information on airport security checkpoints along with the cash and cellphones in the car.
