Wed Oct 9, 3:25 PM ET

By Andrew Stern

CHICAGO (Reuters) - Federal officials on Wednesday announced the indictment of the head of a U.S. Muslim charity, charging he used donations to fund terrorism around the world.

Syrian-born Enaam Arnaout, who has been in custody since last April, engaged in a "multinational criminal enterprise that for a decade used charitable contributions of innocent Americans -- Muslims, non-Muslims and corporations alike -- to support al Qaeda" as well as turmoil in Chechnya (news - web sites) and "armed violence in Bosnia," the Justice Department (news - web sites) said.

"It is sinister to prey on good hearts to fund the works of evil," Attorney General John Ashcroft (news - web sites) told a Chicago news conference.

The seven-count indictment largely repeated charges made against Arnaout, 40, in documents released at the time of his arrest earlier this year and at subsequent court hearings.

He had previously been charged only with lying in a court document that his Benevolence International Foundation filed when it challenged the seizure of its assets in the aftermath of the Sept. 11 attacks.

At the time, the foundation said it was a "faith-based humanitarian organization that engages in charitable work around the world" and "does not engage in or fund terrorist activity."

Ashcroft told reporters the indictment was based in part on records found in the group's offices in Bosnia which included notes detailing when al Qaeda was formed in Afghanistan (news - web sites) in 1988. The network, formed by Osama bin Laden (news - web sites), is believed responsible for last year's attacks on New York and Washington.

The records contained lists of Al Qaeda followers who attended the group's training camps and donor lists to the charity. Ashcroft said the donor lists would be sorted through to determine who was innocently making a charitable contribution and who sought to fund groups bent on violence.

"It is chilling that the origins of al Qaeda were found in a charity pledged to do good," Ashcroft said.

Wednesday's indictment alleges Arnaout engaged in racketeering, money laundering, mail and wire fraud and other illegal activities to fraudulently obtain charitable donations.

He could be sentenced to 90 years in jail with no possibility of parole if found guilty.

-- Anonymous, October 09, 2002