FBI Probes U.S. Link to Mumbai Attacks

The FBI is expanding its investigation in a Chicago terrorism case to determine whether a key suspect may have helped scout targets for last year's massive coordinated attack in Mumbai, India that killed 166 people, according to U.S. law enforcement officials.

The Justice Department announced late last month that it had charged two Chicago-area men—David Coleman Headley, the son of a former Pakistani diplomat, and a childhood friend, Tahawwur Hussain Rana-- for plotting to attack a Danish newspaper for publishing cartoons deemed offensive to the Prophet Mohammed.

But since then, the case has taken some dramatic turns that have attracted the interest of Indian Government investigators and transformed it into one of the most significant international terrorism cases that the FBI has brought since 9/11, the officials say.

After his arrest at Chicago's O'Hare Airport on Oct. 3, Headley waived his rights to a lawyer and admitted to FBI agents that he had worked directly with Ilyas Kashmiri—a notorious Al Qaeda-linked terrorist – to plan the assassination of an editor of the Danish newspaper (who he mistakenly believed was Jewish) and the cartoonist who drew the cartoon of Mohammed, according to a detailed 47-page FBI affidavit filed in federal court on Nov. 6.

In virtually no other case since the initial wave of post 9/11 investigations has the FBI confirmed such a direct link between a U.S. based suspect and a high-ranking international terrorist. (Kashmiri, identified by federal prosecutors as one of the Pakistan's most wanted terrorists, is leader of a group closely associated with Al Qaeda and was the target of an unsuccessful CIA drone attack last September.)

Headley also told the FBI that he had "worked at various times" and "received training" from Lashkar-e Taiba, the Pakistani based terrorist group that is believed to have orchestrated the Mumbai attacks, the FBI affidavit states.

In the days after his arrest, Headley waived his right to a court hearing and continued to cooperate with the FBI, a senior law enforcement official (who like others interviewed for this story declined to be named told NEWSWEEK. The official said federal prosecutors now hope to file new charges in the case in the next "few weeks." John Theis, a lawyer for Headley, declined to comment.

Based in part on statements made by Headley – as well as a wealth of intercepted emails, phone calls and other evidence--FBI agents have been aggressively investigating additional leads in the case and have been working with Indian investigators in Mumbai to nail down Headley's admitted work for Lashkar, the U.S. officials say.

At the same time, India's National Investigation Agency—which was created after the Mumbai attacks to specifically investigate terrorism cases-- has launched its own probe. The agency has developed evidence that between 2006 and 2009, Headley travelled to India at least nine times and scouted targets for Lashkar, Indian intelligence officials (who also asked not to be identified talking about the ongoing probe) told Sudip Mazumdar, a Newsweek reporter in India.

Among the targets that Headley scouted was the luxurious waterfront Taj Mahal Hotel where the Mumbai terrorists remained holed up for nearly two days killing guests and staff at random, the Indian official said. During one of his trips to India, Headley had stayed at the hotel.

Headley is also believed to have scouted other Mumbai targets, including the Jewish Chabad House that was seized by two of the terrorists during the Mumbai attacks, the Indian official said. (The Chabad House's American rabbi, Gavriel Holtzberg, and his six month pregnant wife, Rivka, were among those killed in an ensuing gun battle.)

The Indian National Investigation Agency have filed charges against Headley in connection with the Mumbai attacks, the Indian officials told Muzamdar. The charges have not yet been made public.

Coming: More on the Chicago terror case: the Bollywood connection, Al Qaeda videos, and a look at jihadi life in Wazirstan.