Former Ashland activist Pete Seda's 2010 money-laundering conviction for allegedly attempting to fund Chechen terrorists was thrown out this morning by federal appeals judges who chided the government for withholding and misrepresenting evidence to the defense in the case.
The 9th U.S. Circuit Court of Appeals ruling also concludes that federal agents overstepped their bounds during the initial 2004 search of Seda's Ashland home, which served as the Oregon office of the now defunct Al-Haramain Islamic Foundation.
A jury convicted Seda on tax-evasion and conspiracy charges for using his charity to help smuggle $150,000 from Ashland to Saudi Arabia in 2000 and signing a fraudulent tax return to cover it up.
Though prosecutors argued Seda's motive was to fund Islamic terrorists in Chechnya and it was a key component of the entire trial, U.S. District Court Judge Michael Hogan ruled they failed to prove that connection.
"This is a tax fraud case that was transformed into a trial on terrorism," the opinion states.
Among its rulings, the appeals court found fault with the government's unclassified summary of some classified materials that was given to Seda's defense team, saying it was misrepresenting and incomplete.
"We conclude that the substitution's language unfairly colored presentation of the information and, even more problematic, that the substitution omitted facts helpful to Seda's defense," the decision states.
The judges expounded on that decision in a classified opinion not made available.
"Mr. Seda and his family and his defense team are pleased that his concerns about how the way the case was handled were vindicated," Steve Wax, Seda's lead defense attorney, said in an interview this morning.
Seda entered federal prison in February 2012 to begin his 33-month sentence. Wax said he has been in a Portland halfway house for the past three months.
Seda already was scheduled next week to be sent to his Portland residence for home confinement, Wax said. Wax said "we anticipate some change in his status" next week, but he did not elaborate.
Wax argued after Seda's conviction to have him freed pending this appeal, but Hogan ordered him imprisoned.
"Needless to say, it's most unfortunate and unfair he had to serve any time in prison," Wax said.
— Mark Freeman