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Man charged with smuggling missile

Prosecutor: Suspect called Americans 'bastards' and bin Laden a hero

Lakhani arrives at the federal courthouse in Newark, New Jersey.
Lakhani arrives at the federal courthouse in Newark, New Jersey.

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CNN's Deborah Feyerick on the arraignment of British arms dealer Hemant Lakhani as federal prosecutors provided more details about the weapons sting.
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CNN's Jeanne Meserve has more on the international missile sting operation.
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CNN's Jason Bellini examines the capabilities and prevalence of the Russian SA-18 missile system.
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• Interactive: SA-18 missile 
• Criminal complaint: U.S. v. Lakhani  (FindLaw, PDF)external link
• Criminal complaint: U.S. v. Hameed  (FindLaw, PDF)external link
• Criminal complaint: U.S. v. Abraham  (FindLaw, PDF) external link
• Interactive: The hunt for al Qaeda
• Audio slide show: Bin Laden's audio message, 2/03
• Special report: Terror on tape
• Special report: War against terror

NEWARK, New Jersey (CNN) -- A British citizen accused of smuggling a shoulder-launched surface-to-air missile into the United States for use in a terrorist attack against a U.S. commercial airliner was charged Wednesday in federal court.

Hemant Lakhani was arrested Tuesday in a sting operation -- the result of an 18-month effort involving historic cooperation between intelligence officials in the United States and Russia. Britain also played a key role, U.S. officials said.

"The fact that we're able to sting this guy is a pretty good example of what we're doing in order to protect the American people," said President Bush at his ranch in Crawford, Texas.

Lakhani, who was born in India, could face 25 years in prison if he is convicted on the two counts against him: providing material support to terrorists and illegal weapons dealing.

According to federal prosecutors, the international arms dealer, who boasted of sales to terrorist groups, thought he had struck a deal to sell a missile to a Somali group looking to launch a "jihad" against a U.S. plane.

He tried to sell the group 200 missiles, and insisted it buy 50 after it received the first one. The price for the first missile: $85,000.

The man claiming to represent the Somali group man was in fact an informant for the United States; the missile he brought into the country was a dud; and the undercover Russian authorities who sold it to him were in on the whole plan.

A government source said the cooperating witness was a drug informant seeking leniency.

"This morning, the terrorists who threatened America lost an ally in their quest to kill our citizens," said Christopher J. Christie, U.S. attorney for the District of New Jersey.

Shoulder-fired surface-to-air missiles have raised concern among government and security officials because their portability makes them easy to use against commercial airliners.

Each missile weighs only 30 to 40 pounds, and can fit inside a golf bag, a counterterrorism expert told CNN.

A failed attempt in November to shoot down an Israeli charter jet with a shoulder-fired missile as it took off from the airport in Mombasa, Kenya, was a "wake-up call" for U.S. intelligence agencies, several officials said.

The attempt occurred within minutes of an al Qaeda-claimed suicide bombing at a nearby Israeli-owned hotel that killed more than a dozen people, and authorities believe both attacks were coordinated.

Middleman from gems to jihad

At a court appearance Wednesday, Lakhani waived his right to hear the charges against him, and was ordered held without bail.

According to the federal complaint, prosecutors have recordings of more than 150 conversations -- including video and audio recordings -- in which Lakhani makes his role in the plot clear.

The operation -- involving numerous agencies working together -- also netted the arrests of two gem dealers accused of being the "money launderers" in the plot.

Moinuddeen Ahmed Hameed was charged in Newark. Yehuda Abraham had a procedural hearing in Manhattan and will be charged at a later time, authorities said.

In a news conference on the steps of the federal court building in Newark, authorities from numerous agencies praised the 18-month sting operation as a success in the war on terrorism.

"We have in custody today three men who were prepared, for money, to allow Americans to be threatened and perhaps killed," said Christie.

"There is no question that Mr. Lakhani was someone who was sympathetic to the beliefs of the terrorists who were trying to do damage to our country," Christie said.

"He, on many occasions in recorded conversations, referred to Americans as 'bastards,' [and to] Osama bin Laden as a hero who had done something right and set the Americans straight."

Lakhani's attorney had no comment.

Meanwhile, Justice Department officials told CNN they were frustrated by leaks in the media on the missile sting case because they were trying to get Lakhani to cooperate and give them more information before arresting him.

The U.S. government's hand in the sting was apparently forced after the BBC reported on the operation Tuesday in a story that apparently exaggerated the importance of the imminent arrest.

Apparently, Justice Department officials were trying to "flip" Lakhani and get him to cooperate, but were forced to arrest him after leaks on the sting came out.

Officials also said charges against Lakhani were made public much sooner than they had planned.

When asked if any leaks compromised the investigation, Christie said, "No."

However, several officials privately expressed a great deal of frustration to CNN because they were hoping Lakhani would provide information on other weapons networks ready and willing to service terrorists.

The officials at no time asked CNN to withhold information on the story, but did say they had "operational concerns."

According to the federal complaint, Lakhani's interactions with the cooperating witness date to "in or about December 2001."

Over the coming year and a half, they had numerous conversations and met several times -- including last month in St. Petersburg, Russia, from where he believed the missile would be shipped.

He also met with undercover Russian agents whom he thought were selling him the missile.

Christie said the help of Russian authorities was "absolutely indispensable in our ability to be able to prevent an attack on the United States. I thank, on behalf of the Justice Department, our friends in Russia, without whom we could not have done the work we've done today."

The dud SA-18 Igla missile was sent by ship to Baltimore labeled as "medical equipment," where it was supposed to be picked up by the individuals Lakhani thought were terrorists, U.S. officials told CNN.

U.S. government sources told CNN the missile arrived in Baltimore, after which undercover FBI agents flew it to Newark, where a meeting was scheduled with Lakhani, officials said.

U.S. officials said they were aware at all times of exactly where the disarmed missile was.

Undercover operatives were to meet Lakhani at the port to receive the weapon and to make a down payment of $500,000 for the next 50 missiles, covering 10 percent of the total cost, Christie said.

That's when they nabbed him.

Later Tuesday, authorities arrested the two gem dealers, who work in Manhattan. According to the federal complaint, they were to funnel the cash between the buyer and the seller.

British authorities, acting on a U.S. request, searched two sites in London in relation to the case, British police said. No arrests were made.

Although they would not say what the two sites were, neighbors near one home that was searched said it was Lakhani's home.

U.S. authorities are working to expand the investigation, exploring whether the three arrests can lead them to other smugglers or weapons.

The British angle to the sting report caught the attention of Steven Simon, a senior terrorism expert with the nonprofit U.S. think-tank RAND.

"My initial reaction was maybe there is a connection here," Simon told CNN. "But as we now know, the middleman who was caught in the sting operation is really in it for the money."

"You need to find the middlemen first," said Simon. "Other middlemen will see this guy was the victim of a sting operation ... , and they're going to be less eager to go around the world trying to find people to buy these things."

Since September 11, 2001, advisories have been sent to air carriers citing the possible threat of shoulder-fired missiles. One sent in May discussed intelligence indicating al Qaeda specifically had an interest in using missiles against commercial aviation in North Africa and the Middle East.

The Department of Homeland Security has asked eight government contractors to begin working on detailed plans for anti-missile technology that could someday be put on commercial airliners to prevent a missile strike.

CNN correspondents Deborah Feyerick, David Ensor, Jeanne Meserve and Kelli Arena and producers Kevin Bohn, Ronni Berke and Vivienne Foley contributed to this report.

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