Terror Watch: Tangled Ties

Within weeks of the September 11 terror attacks, security officers at the Fleet National Bank in Boston had identified "suspicious" wire transfers from the Saudi Embassy in Washington that eventually led to the discovery of an active Al Qaeda "sleeper cell" that may have been planning follow-up attacks inside the United States, according to documents obtained by NEWSWEEK.

U.S. law-enforcement officials familiar with the matter say there is no evidence that officials at the Saudi Embassy were knowingly financing Al Qaeda activity inside the country. But documents show that while trying to trace a tangled money trail beginning with the Saudi Embassy, investigators soon drew startling connections between a group of Saudi nationals receiving financial support from the embassy and a 34-year-old microbiologist and MIT graduate who officials have since concluded was a U.S. operative for 9/11 mastermind Khalid Shaikh Mohammed.

The microbiologist, Aafia Siddiqui, a mother of three young children, has since fled the country--most likely to her native Pakistan-and is now wanted for questioning by the FBI. But "suspicious-activity reports" (SARS) filed by Fleet Bank with the U.S. Treasury Department, suggest that Siddiqui and her estranged husband, Dr. Mohammed Amjad Khan, an anesthesiologist, may have been active terror plotters inside the country until as late as the summer of 2002.

The reports show that Fleet Bank investigators discovered that one account used by the Boston-area couple showed repeated debit-card purchases from stores that "specialize in high-tech military equipment and apparel," including Black Hawk Industries in Chesapeake, Va., and Brigade Quartermasters in Georgia. (Black Hawk's Web site, advertises grips, mounts and parts for AK-47s and other military-assault rifles as well as highly specialized combat clothing, including vests designed for bomb disposal.)

Fleet accounts associated with the couple also showed "major purchases" from U.S. airlines and hotels in Pittsburgh and North Carolina as well as an $8,000 international wire transfer on Dec. 21, 2001, to Habib Bank Ltd., a big Pakistani financial institution that has long been scrutinized by U.S. intelligence officials monitoring terrorist money flows.

NEWSWEEK first reported, in a June 23, 2003, cover story, that the FBI had identified Siddiqui and Khan as suspected Al Qaeda agents. Internal FBI documents showed that, after his capture in March 2003, Khalid Shaikh Mohammed told U.S. interrogators that Siddiqui was supposed to support "other AQ operatives as they entered the United States." Agents also found evidence that she had rented a post-office box to help another Baltimore-based Al Qaeda contact who had been assigned by Khalid Shaikh Mohammed to blow up underground gasoline-storage tanks. Bureau documents also stated that Khan, Siddiqui's husband, had purchased body armor, night-vision goggles and a variety of military manuals that were supposed to be sent to Pakistan.