Update:  On March 3, 2011, a district judge ruled that prosecutors do not have to provide an Oregon charity founder more documentation about their failure to disclose a witness against him had been paid by the FBI. This ruling came two days after the same judge said he would not respond to Pete Seda’s attorneys’ oral request for a new trial. Seda’s attorneys have said they will file a written request for a new trial. No date has been set for a hearing on the defense motion for a new trial. Defense lawyers have until March 14 to file their response to the prosecution’s arguments that their failure to divulge the information about paid witnesses did not justify throwing out Seda’s convictions for tax fraud and conspiracy.

On Feb. 23, 2011, attorneys for Pete Seda, co-founder of Al-Haramain Islamic Foundation of Oregon, filed documents seeking additional evidence about the prosecution’s failure to disclose that payments to a witness had been made.   The request came six days after documents filed by the prosecutor’s office shed light on several mistakes in the government’s handling of the case. An evidentiary hearing is scheduled for March 1.

In October 2010 Seda was convicted of tax fraud charges relating to alleged funding of Chechen rebels fighting Russia. He was released in January after post-trial evidence revealed that the prosecution may have altered documents and the FBI paid $14,500 to a prosecution witness but failed to notify Seda’s attorneys before the trial.

As part of their efforts to win a new trial, attorneys for Seda argue that they need more information about the prosecution’s actions to determine the extent of their misconduct. In their request for a hearing, they wrote, “The importance of providing access to the material sought is underscored by the fact that the material provided to date by the government is rife with inconsistencies and incomplete accounts and statements strongly suggesting that more specific information exists.”

In documents filed on Feb. 18, prosecutors said the witness who received the payment, Barbara Cabral, was “not a crucial witness,” and its omission “was a mistake, not a deliberate attempt to gain an advantage… and that the error was harmless.”  They are asking the court to not grant a new trial.

Seda had been charged with conspiracy to defraud the U.S. government and filing a false return with the Internal Revenue Service. Prosecutors say Seda conspired in March of 2000 to launder $150,000 to militants in Chechnya.  Seda’s attorneys say the money was a charitable donation that his accountant forgot to disclose on the charity’s tax forms.

Al-Haramain Islamic Foundation Oregon was shut down by the Department of Treasury in 2004 in a proceeding that has been held unconstitutional by the federal court in Oregon. The case is now on appeal to the Court of Appeals for the Ninth Circuit. The charity is also known for winning the first judgment against the United States for an illegal wiretap of its communications with its attorneys. The government is appealing that ruling.