Cellphone cases appear to be unraveling

WASHINGTON — Early this year, federal authorities alerted police departments around the United States of the threat posed by people making bulk purchases of prepaid cellphones.

With a burgeoning underground market for the phones, authorities feared they could be used to bankroll terrorists — or as detonators to trigger a series of explosive attacks.

So when five men in Ohio and Michigan were stopped last week in separate incidents and found to be carrying large numbers of the phones, local authorities decided to do their part in fighting the war on terror. The men were arrested and charged under state law with terrorism-related offenses that left them facing up to 20 years in prison.

But now the local cases against the men appear to be unraveling almost as quickly as they were stitched together.

The FBI has taken the unusual step of declaring publicly that it was unaware of any evidence linking the men to known terrorist groups.

On Tuesday, the prosecutor in the Ohio case dropped the terror-related charges against two men, acknowledging that he did not have the evidence to make them stand up in court. Ali Houssaiky, 20, and Osama Sabhi Abulhassan, 20, both of Dearborn, Mich., still face misdemeanor counts of falsification.

On Wednesday, the prosecutor in the Michigan case asked a judge to dismiss terrorism charges against three men who were found with nearly 1,000 cellphones. Maruan Muhareb, 18, Adham Othman, 21, and Louai Othman, 23, all of the Dallas area, still face federal fraud conspiracy and money laundering charges.

The arrests have raised questions about the role of state and local authorities when it comes to prosecuting terrorists, a function that has been the exclusive province of the federal government since the Sept. 11 attacks.

Lawyers and supporters of the men charged said that they believed the men were arrested because of their ethnicity, and that they were only looking to make some money by buying the phones and reselling them.

"Unfortunately, these Barney Fife-like procedures of the police departments are increasing an Islamic-phobic atmosphere which already exists in American society today," said Dawud Walid, the head of the Michigan chapter of the Council on American-Islamic Relations, a Washington-based advocacy group. His reference was to the deputy sheriff on "The Andy Griffith Show" who was known for his exuberant, if bumbling, police work.

"I don't think that the prosecutor of a very small town has better intelligence information than the FBI," Walid said.

The authorities in Marietta, Ohio, and Caro, Mich., defended their work, which unfolded as the nation was in a state of heightened terrorism alert after a thwarted British terror plot.

In a news release, Mark Reene, the prosecuting attorney for Tuscola County in Michigan, which includes Caro, said he was standing by the charges. He said the charges were authorized only after the Caro police department had contact with federal officials, including the Homeland Security Department and the FBI.

"The only objective has been to determine the facts and ensure the safety of the citizens of this county, state and country," Reene said.

Triggering the arrests were purchases of a widely available consumer item: the prepaid cellphone. The phones are popular with consumers because they are sold with a fixed number of minutes, which lets users avoid spending more on calls than they have budgeted, and don't require a commitment to a service contract.

And, because the phones aren't linked to specific callers, they are essentially untraceable, a quality that has also made them popular with drug dealers and others who want to avoid having their calls traced.

In Ohio, Houssaiky and Abulhassan were stopped by sheriffs' deputies for a traffic violation Aug. 8, then arrested after the deputies found 12 cellphones, $11,000 cash, airplane passenger lists and information on airport security checkpoints. Defense lawyers have said the flight information consisted of old papers left in the car by a relative who worked at an airport. The two men acknowledged buying about 600 phones in recent months as part of a money-making scheme.

James Schneider, the county prosecutor in Marietta, defended the local detective work and the prosecutorial about face, and said authorities would continue to probe for terrorist links.

"I don't think it was a mistake to arrest these fellows, and I don't think it was a mistake to file the charges," Schneider said. "I think the course we are taking is the prudent course."

Asked about a statement by the FBI that the men had no links to terrorism, he said, "I have never talked to the FBI" about the case.