Fraud suspect released before trial.

Byline: Bill Bishop The Register-Guard

Federal prosecutors are appealing a judge's decision Monday to allow a former Ashland resident, who fled the country under suspicion that his Islamic charity had aided terrorists, to remain free pending trial on federal tax fraud and money laundering charges.

After two hearings Monday, U.S. Magistrate Judge Thomas Coffin rejected claims by a federal prosecutor that Pirouz Sedaghaty, also known as Pete Seda, is a public danger. Instead, Coffin based his ruling on whether Seda might again flee.

It's not clear whether prosecutors have obtained or might reveal additional information at a hearing today before U.S. District Judge Michael Hogan in Eugene.

Coffin ordered Seda released Monday despite repeated requests from Assistant U.S. Attorney Chris Cardani to find Seda a potential public safety threat.

In a 20-minute morning hearing, Coffin indicated he believes that both sides were "less than forthcoming" with information necessary for him to decide the release issue.

The judge said prosecutors have shown only "vague concerns" that Seda might be dangerous.

"We have conjecture, the expression of a question, by the government. But we have no details," Coffin said in court. "If the government has information that is not being shared, what are we to do?"

But Coffin apparently agreed with Cardani's assertion that Seda had not sufficiently explained where he'd been living, how he earned money and other details of his life during 4 1/2 years as a fugitive.

Coffin gave Seda and his lawyer, Lawrence Matasar of Portland, four hours to provide additional information to the court's pre-trial service.

After a brief afternoon hearing, Coffin indicated the additional information Seda provided was enough to sway his decision to release Seda before trial. Cardani continued to press for Seda's detention.

Coffin allowed Cardani one day to propose a list of restrictions governing Seda's release. Cardani declined to discuss potential release terms outside of court.

Seda, whose age is not known because of conflicting information on four passports he held, co-founded the Al-Haramain Islamic Foundation in 1999. He fled the country in 2003 after federal officials began an investigation.

The U.S. Treasury Department froze the foundation's assets and the government of Saudi Arabia dissolved the foundation in 2004.

Seda and the group's other founder, Soliman Hamd Al-Buthi, were indicted in 2005 on tax and money laundering charges.

Al-Buthi, a government official in Saudi Arabia, remains a fugitive. Seda returned to the country and surrendered voluntarily last month.

Coffin said Seda's voluntary return weighs heavily in favor of allowing his release before trial.

Coffin also noted the government has not linked Seda to any act of violence.

Although the federal Treasury Department has said Seda's group had direct links to Osama bin Laden and to al-Qaeda-linked Islamic fighters in Chechnya in 2000, Cardani disclosed no evidence of the links during Monday's hearing or during an earlier detention hearing shortly after Seda surrendered last month.

In the earlier hearing, Cardani noted that Seda's foundation distributed extremist Islamic literature to prison inmates, espousing violence against nonbelievers. He argued the literature indicates Seda could be dangerous.

Cardani also argued that conflicting information submitted by Seda, and the existence of numerous passports, indicates he may be planning to flea again if the criminal charges become more serious than Seda expects.

"We're not backing away from the dangerousness issue," he told Coffin.