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Tension grows between Calif. Muslims, FBI after informant infiltrates mosque
In May 2007, Monteilh said he recorded a conversation about jihad during a car ride with Niazi and another man. Monteilh said he suggested an operation to blow up buildings and Niazi agreed. An FBI agent later cited that and other taped conversations between the two in court as evidence that Niazi was a threat.
A few days later, Ayloush got an anguished phone call from Niazi and the other man in the car.
"They said Farouk had told them he had access to weapons and that they should blow up a mall,'' Ayloush recalled. "They were convinced this man was a terrorist."
Ayloush reported the FBI's own informant to the FBI. He said agents interviewed Niazi, who gave them the same account, but the agency took no action against Monteilh.
Still, Monteilh's mission was collapsing. Members of the mosque told its leaders that they were afraid of Monteilh and that he was "trying to entrap them into a mission," according to Asim Khan, the former mosque president. The mosque went to Orange County Superior Court in June 2007 and obtained a restraining order against Monteilh, court records show.
Soon afterward, Monteilh said FBI agents "told me they wanted to cut me loose." After he vowed to go public, he said, he met with three agents at the Anaheim Hilton, where an FBI supervisor threatened him with arrest.
"She said, 'If you reveal your informant status to the media, it will destroy the Muslim community's relationship with the FBI forever." Monteilh said.
The FBI declined to comment on Monteilh's allegation.
At a subsequent meeting, Monteilh said, he signed a non-disclosure agreement in exchange for $25,000 in cash. An FBI letter to Monteilh's attorney, on file in U.S. District Court in Santa Ana, says Monteilh signed the non-disclosure agreement in October 2007.
But Monteilh was arrested in December 2007 on a grand-theft charge and ended up back in jail for 16 months. In January, he sued the FBI, alleging that the bureau and Irvine police conspired to have him arrested, then allowed his informant status to become known in prison, where he was stabbed.
The FBI and police have denied the allegations, and the lawsuit was dismissed on jurisdictional grounds. But the judge allowed Monteilh to file an amended complaint, with similar allegations, in September. The case is pending.
A case unravels
In the meantime, the case against Niazi unfolded. He was indicted in February 2009 by a federal grand jury on charges of lying about his ties to terrorists on immigration documents. In court, prosecutors said that jihadist materials were found on Niazi's computer and that he had wired money to an alleged al-Qaeda financier. Prosecutors said he is the brother-in-law of Osama bin Laden's security coordinator. Much of the evidence was FBI testimony about Niazi's recorded conversations with an FBI informant, who sources say was Monteilh.
"Frankly, there is no amount of bail or equity in a home that can protect the citizens of this community" from Niazi, Assistant U.S. Attorney Deirdre Eliot said in arguing for his detention.
Within days of Niazi's indictment, Monteilh revealed his informant status in a series of interviews with Los Angeles area media.
"I think the FBI treated me with the utmost treachery," he said in the interview with The Post.
In subsequent months, Monteilh sought out Niazi's attorneys and told them he was ordered to entrap their client.
A year and a half later, on Sept. 30, prosecutors summarily moved to dismiss the case against Niazi, and a judge agreed. The U.S. attorney's office in Los Angeles cited the lack of an overseas witness and "evidentiary issues." Sources familiar with the decision said Monteilh's role - and his potential testimony for the defense - was also a factor.
Niazi declined to comment. His attorney Chase Scolnick said he is "very pleased with the outcome. It is a just result."
In recent weeks, Monteilh said, he has been approaching Muslims at a local gym and apologizing for "disrespecting their community and religion." Monteilh, who is now unemployed, says he regrets his role in the Niazi case and was glad when the charges were dropped.
On a recent Friday, more than 200 men sat on the carpet for prayers inside the Irvine mosque, most of them in khakis or jeans. During the sermon, the imam offered some advice.
"If an FBI agent comes in and says, 'You're under arrest,'â??" he told the crowd, they should pray to Allah - and then call a lawyer.
As worshipers milled around outside, they said they support the FBI's role in fighting terrorism but feel betrayed by the infiltration of their sacred place.
"The FBI wants to treat the Muslim community as a partner while investigating us behind our backs,'' said Kurdi, the Loyola student. "They can't have it both ways."
Staff researcher Julie Tate contributed to this report.