U.S. Probes Terror Ties to Boston Software Firm Jerry Guidera and Glenn R. Simpson The Wall Street Journal December 6, 2002 QUINCY, Mass. -- A software company raided here by antiterrorism investigators was targeted because several employees already are under scrutiny for alleged terrorist ties and because it does computer work for the military, the Federal Aviation Administration and Congress and may have access to classified information. Agents with the U.S. Customs Services and the Federal Bureau of Investigation raided the company, Ptech Inc., at 4 a.m. Friday, confiscating files and computer equipment. Based in a blue-collar suburb south of Boston, the firm has annual revenue of up to $10 million and specializes in software programs that help run corporate networks. Efforts to reach Ptech executives for comment were unsuccessful. Its offices were closed Friday, and no one returned a call left on the company's voice-mail system. According to General Services Administration records, Ptech gained government approval in 1997 to market its services to "all legislative, judicial, and executive branches of the federal government" under a Clinton Administration government-efficiency improvement effort. The company has stated in government filings that it has enjoyed security clearance to work on sensitive projects since December 1997, according to records obtained by the Washington-based the Investigative Project, a terror research group. Revenue from federal government work totaled $3.1 million as of August 2002. Among other projects, Ptech helped build the Military Information Architecture Framework, a software tool used by the Department of Defense to link data networks from various military computer systems and databases, a contract that was renewed in September. The company also has done work for the North Atlantic Treaty Organization, the House of Representatives and the Energy Department, and the FBI itself has used its software for budgeting tasks. Tom Ridge, the Bush administration's chief of homeland security, said the company's work "has been scrutinized by the best, and it poses no strategic threat or operational threat to this country. But there is a nexus there that led to the law enforcement action, and that's all I can tell you." Financial Backers Probed Ptech's financial backers include two suspected terror financiers, investigators said: Saudi businessman Yassin Qadi, who the U.S. Treasury lists as a financial backer of al Qaeda and other terrorists, and a company run by M. Yaqub Mirza, a Pakistani immigrant who controls a web of businesses and charities in Northern Virginia raided by antiterror investigators in March. A lawyer for Mr. Qadi, who was the subject of a page one article 2 in The Wall Street Journal last month, said his client invested $5 million in Ptech in the mid-1990s and sold his stake in 1999. He said Mr. Qadi was a passive investor and never had any day-to-day involvement in the company. The lawyer denied that Mr. Qadi has any ties to terrorism. Shortly after last year's attacks, U.S. authorities froze the assets of Mr. Qadi, a prominent Saudi businessman who they alleged has secretly financed al Qaeda and Hamas, the Palestinian militant group. They also asserted that he helped run the Muwafaq Foundation, a charity that funneled millions of dollars to terror kingpin Osama bin Laden. Saudi authorities recently said they too had blocked Mr. Qadi's accounts. Mr. Qadi is fighting to regain control of his assets. Mr. Mirza is one of Ptech's board members. According to court records and Justice Department documents, Mr. Mirza and several associates are suspected of funding the Palestinian Islamic Jihad, which targets Israeli civilians with suicide bombers. U.S. officials privately say Mr. Mirza and his associates also have connections to al Qaeda and to other entities officially listed by the U.S. as sponsors of terrorism. Many of Mr. Mirza's investments are made through a firm he runs called Sterling Management, and one of the companies he has set up includes the name of the software company raided Friday -- the Sterling Ptech Fund LLC. Investigators said they believe that entity holds a stake in Ptech for Mr. Mirza. Mr. Mirza's lawyer, Nancy Luque, said Mr. Mirza has no involvement in terrorism and asserted that the government has failed to find any evidence to the contrary. Ptech also received backing from BMI Inc., a defunct New Jersey firm now drawing government scrutiny for its financial relationships with Muslim charities allegedly involved in terrorism. Government filings show BMI made loans to Ptech when it was founded in 1994, and a lawyer familiar with the matter said BMI also was a Ptech investor. BMI, in which Mr. Qadi also invested, was the subject of an FBI terrorism probe in 1998-99. The FBI says BMI's investors also include Mousa Abu Marzouk, who operates openly as a top Hamas leader based in Damascus, Syria, and is designated by the Treasury as a terrorism sponsor. In 1999, a BMI employee told the FBI that the company may have financed the bombings of U.S. embassies in East Africa in 1998, according to a sworn FBI statement. BMI also was named as a possible conduit for Hamas related funds in a separate 1998 FBI court filing. Ptech's chief scientist, Hussein Ibrahim, joined the company after a lengthy stint at BMI, where he served as vice president from 1989 to 1995. After The Wall Street Journal article about Mr. Qadi disclosed BMI's alleged involvement in fraud and terrorism, Ptech's Web site was altered to remove references to Mr. Ibrahim's employment at BMI. Two other Ptech officials of concern to U.S. officials are Muhammed Mubayyid and Suheil Laheir, both of whom formerly worked for a Boston-based Islamic charity called Care International, which has been the subject of U.S. terrorism probes since shortly the Sept. 11, 2001, attacks. (The Islamic charity isn't related to the Atlanta-based charity of the same name.) Close Ties Records indicate close ties between the Islamic charity and the Boston branch of Al Kifah Refugee Center, the Brooklyn branch of which was named by prosecutors as the locus of the 1993 conspiracy to bomb the World Trade Center. Al Kifah's Boston office on Commonwealth Avenue is located in the same suite that Care International listed in its 1993 incorporation documents. A Web site registered by Al Kifah has been used by Care International, according to terrorism researcher Steven Emerson. And the militant Islamic newsletter Al-Hussam (The Sword) listed its publisher Al Kifah until April 1993, after which it listed Care International as its publisher. The newsletter's address also is the one on Commonwealth Avenue. According to Al Kifah records, Mr. Mubayyid donated $720 to the refuge center in care of Abdullah Azzam, a now-deceased mentor of Mr. bin Laden. The center was operated by Makhtab Al-Khidamat/Al-Kifah, a charity whose assets have been frozen by the U.S. antiterror investigators. In late 1993, Care and Al Kifah both launched efforts to make the Islamic religious movement more high-tech. "It is the duty of every Muslim, especially those with the latest technical expertise from the U.S., to contribute this knowledge that Allah has bestowed on them," a Care document announcing the project says. A spokesman for Care International, Asim Ghafoor, has said that the group has no links to terrorism. Write to Jerry Guidera at jerry.guidera@wsj.com 3 and Glenn R. Simpson at glenn.simpson@wsj.com 4 URL for this article: http://online.wsj.com/article/0,,SB1039184086357188113.djm,00.html Hyperlinks in this Article: (1)http://online.wsj.com/page/0,,2_0800,00.html (2)http://online.wsj.com/article/0,,SB1038261957100299628,00.html (3)mailto:jerry.guidera@wsj.com (4)mailto:glenn.simpson@wsj.com