by John Mintz
Washington Post Staff Writer
August 2, 2002
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Federal investigators are reexamining a recent arms smuggling case in Florida to determine whether agents of the Pakistani government tried to buy missiles and nuclear weapons components in the United States last year for use by terrorists or Pakistan's military.
The original criminal case -- a sting operation in which intermediaries allegedly tried to buy the weapons from a diamond thief-turned-informant for the Bureau of Alcohol, Tobacco and Firearms -- attracted little public notice when arrests were made in June 2001. It resulted in a single guilty plea and the sealing of court files for another defendant.
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."