PROSECUTORS CHARGE MAN IN MONEY-LAUNDERING SCHEME

Federal prosecutors in Manhattan said yesterday that they had broken up a
Pakistani money-laundering operation that was being run from the basement
of a restaurant in Midtown Manhattan.

Prosecutors said that at least some of the money being sent overseas came
from drug trafficking. The operation was run out of the basement of the
Kashmir restaurant, on Eighth Avenue and 39th Street.

The United States attorney's office in Manhattan said it had charged
Shaheen Khalid Butt with money laundering, operating an unlicensed money
transfer business, currency reporting violations, and conspiring in
immigration fraud.

Prosecutors said that Mr. Butt's unlicensed business, called Manhattan
Foreign Exchange, sent more than $2 million to Pakistan between December
2001 and last month.

Before that, a criminal complaint indicates, the business operated through
a licensed money-transfer business, and sent more than $33 million to
Pakistan. That made it one of the New York area's largest remitters of
money to that country, the complaint said.

Three people were arrested in addition to Mr. Butt. One was charged with
operating an unlicensed money remitting business, and the others were
charged in the immigration fraud conspiracy.

Drew Houlihan, a federal agent, said in the complaint that he and other
agents "observed numerous individuals making frequent deliveries of cash"
to the exchange, "often in large amounts."

The United States attorney in Manhattan, James B. Comey, said the arrests
stemmed from an 18-month undercover investigation of Manhattan Foreign
Exchange that was part of a national task force investigating terrorist
financing.

The investigation resulted in other arrests around the country, officials said.

Michael J. Garcia, a senior official who oversees the new Bureau of
Immigration and Customs Enforcement, said, "By dismantling these illegal
networks, we are denying avenues for terrorist groups to raise and move
funds in this country."

Mr. Butt's connection to the Kashmir restaurant could not immediately be
established. Telephone calls to Manhattan Foreign Exchange and the
restaurant were unanswered. Mr. Butt's lawyer did not return a phone call
seeking comment last night.

Mr. Butt was released on $500,000 bond yesterday in United States District
Court in Manhattan.