GRANTS PASS, Ore. (AP) - Defense attorneys charged Wednesday that the prosecution engaged in "outrageous government conduct" by failing to disclose that FBI agents paid $14,500 to a key witness in the trial of an Oregon man convicted of helping smuggle $150,000 through an Islamic charity to Saudi Arabia.

Documents filed in U.S. District Court in Portland call for dismissing the charges against Pete Seda, a former tree surgeon and Iranian-born U.S. citizen also known as Pirouz Sedaghaty. He was co-founder of the American branch of the Al-Haramain Islamic Foundation in Ashland.

They also called for Seda to be released and for an investigation into why the payments were not disclosed before trial.

Although Seda was not convicted of terrorism, prosecutors are seeking the maximum eight years in prison for his tax fraud and conspiracy convictions based on arguments he intended the money to support Muslim fighters battling the Russian army in Chechnya.

In court documents, defense attorneys say they did not learn until after the trial that FBI agents paid $14,500 cash to Richard Cabral and his wife, Barbara, and were trying to pay her $7,500 more. He died before trial and she testified for the prosecution about their contacts with Seda.

Without that information, defense attorneys said they lost their only chance to attack her credibility as a witness in front of the jury.

Her testimony was the only direct evidence in an otherwise circumstantial prosecution case arguing Seda was trying to get money to Muslim fighters in Chechnya, the defense said.

In legal briefs, defense attorneys noted that other defendants have been granted new trials or seen their charges dismissed over similar failures when they are central to a case, even if they are inadvertent.

Cabral testified during the trial that she and her husband worshipped with Seda at his prayer house in Ashland and joined him on a 1999 pilgrimage to Mecca, where he asked them for money to "help send blankets and food and help the mujahideen in Chechnya."

After she testified, a juror leaned over and told her she had done a good job. The judge then dismissed the juror. Defense lawyers argued that was evidence that Cabral's testimony had enough impact on the jury to justify a new trial.

Court documents said the FBI disclosed the payments on Dec. 22, but did not provide documents until Jan. 6, and the government acknowledged in a cover letter that it had failed in its obligations to share evidence with the defense.

"Mr. Sedaghaty, however, takes strong issue with the government's statement that its failure to comply with its obligations can be characterized as `inadvertent,"' defense attorneys wrote. "The record as it exists now suggests that this case has been infected with governmental conduct so extreme that dismissal of the indictment is warranted."

Those documents showed FBI Special Agent David Carroll and Internal Revenue Service Special Agent Colleen Anderson interviewed the Cabrals at least 20 times while they investigated Seda following the Sept. 11, 2001 terrorist attacks, and the FBI handed Richard Cabral three cash payments totaling $14,500, defense attorneys wrote. They said Barbara Cabral was present at one of those payments. The documents also say the Cabrals became friends of the FBI agent.

Defense documents quote Carroll as saying he told Barbara Cabral before the trial that he would "try to get her something," and after the trial told her he was trying to get her $7,500. Carroll added Barbara Cabral had told him April 19 that she had suffered a heart attack and needed money for medical expenses.

A hearing has been set for Jan. 25 in U.S. District Court in Eugene on previous motions for a new trial, but that could be set back in light of the new filings.

The prosecution hasn't filed its response, and the assistant U.S. attorney who tried the case, Chris Cardani, said he could not comment.

Defense attorney Larry Matasar said he could not comment on the case outside court.

The Treasury Department froze the assets of the Ashland chapter and declared it a "specially designated global terrorist" in 2004.

Last month, a federal judge in San Francisco ordered the U.S. government to pay more than $2.5 million in attorney fees and damages after he concluded anti-terrorism investigators wiretapped the phones of Al-Haramain without a warrant.

(Copyright 2011 by The Associated Press. All Rights Reserved.)

January 13, 2011, KATU