Defense: Mosque funds for debt

A Falls Church man charged with embezzling more than $430,000 from the Islamic Center of Washington, D.C., was authorized to take the money so that the mosque’s director could repay a debt to him incurred for the upkeep of two reputed mistresses, his counsel said yesterday.

The debt represented back rent and other costs the center’s director owed to the accused, Farzad Darui, for two apartments he maintained for the women, defense attorney Victoria Toensing said.

Papers filed by the defense last year say the debt was for “the housing and feeding” of the director’s “additional ’wives’ or mistresses.”

Mr. Darui, 48, has been charged in U.S. District Court with embezzling the funds while he was business manager for the mosque — one of the most prominent Islamic places of worship in the country. The center, on Massachusetts Avenue Northwest, was dedicated in 1957 and is one of the nation’s oldest mosques. The Washington Times first reported the criminal investigation in 2006.

Prosecutors say Mr. Darui funneled money — over 5½ years beginning in 2000 — from the mosque’s bank accounts by sending checks to two Virginia-based companies that he controlled.

They contend Mr. Darui altered mosque checks to make them payable to Zaal Inc. and Blue Line Travel, which he operated; that he deposited checks payable to employees or contractors of the center into his business bank accounts; that he had the center’s director, Abdullah M. Khouj, unknowingly endorse duplicate checks; and that he changed the center’s mailing address for a checking account to a post office box in the District to help conceal the theft.

During opening arguments of Mr. Darui’s trial yesterday, Assistant U.S. Attorney Ronald W. Sharpe said Mr. Darui changed the “payee” line on mosque checks 142 times during the period.

According to court documents, concern about the center’s finances arose after Mr. Khouj ordered an independent audit because he was planning to leave his post to become the Saudi ambassador to South Africa.

“Remember, this is a paper case,” Mr. Sharpe told jurors. “Follow the money, ladies and gentlemen, follow the money.”

However, Ms. Toensing said her client is innocent of the charges and never cashed any check of which Mr. Khouj was not “fully aware.”

Ms. Toensing said one of Mr. Khouj’s reputed mistresses had “emotional problems” and pulled out electrical cords and bathroom tiles in at least one apartment.

“Ladies and gentlemen, this is not how we would do business,” Ms. Toensing said. “But it is the way Dr. Khouj insisted on doing business and paying back Mr. Darui.”

Court filings also show that Saudi Arabia exercised financial control over the mosque. Ms. Toensing said the Saudis sent $500,000 each year to the center, that there were no restrictions on how Mr. Khouj used such funds and that the director used some of the money for personal purposes.

Both Mr. Darui and Mr. Khouj are expected to testify in the case, which is set to continue today. Yesterday’s witnesses included a librarian at the center who cashed checks for the mosque and an FBI agent who led the embezzlement investigation and found and seized numerous checks, documents and other items, including a typewriter during searches of Mr. Darui’s offices.

Mr. Darui faces a maximum sentence of20 years in prison and a $250,000 fine if convicted. Prosecutors also are seeking to have him forfeit property that may have been derived from the suspected scheme.