Judge: Islamic charity founder free until ruling

A federal judge has issued an order allowing a man convicted of using a defunct Islamic charity to smuggle money to Saudi Arabia to remain fee while awaiting an appeals court ruling.

Pete Seda, also known as Pirouz Sedaghaty, was convicted in 2010 of tax evasion and conspiracy for using his Al-Haramain Islamic Foundation charity to help smuggle $150,000 from Oregon to Saudi Arabia in 2000 and signing a fraudulent tax return to cover it up.

His lawyers said he is not a risk to flee. U.S. District Court Judge Michael Hogan agreed, ruling that Seda will remain free while an appellate court decides on his appeal, the Medford Mail Tribune reported.

Before that process gets underway, the 9th U.S. Circuit Court of Appeals will decide whether Seda should say out on bail while it considers his appeal.

Federal prosecutors did not oppose the motion by Seda's defense team. The defense argument was based on a 9th Circuit ruling that essentially states defendants who get out on bail in U.S. District Court before beginning their prison term should stay out on bail whie the appeals court makes its own bail decision.

The 9th Circuit judges have not indicated when they plan to rule on Seda's request.

Before learning of the ruling, Seda had been prepared to fly next week to Colorado, where he was ordered to begin serving his 33-month federal prison term.

At trial, prsecutors alleged that Seda's motive was to fund Islamic terrorists in Russia's breakaway Chechnya region. Hogan ruled that the prosecution failed to show that connection. If that argument had been successful, it could have led to as many as eight years in prison under federal sentencing guidelines.

For much of the past three years, the former arborist from Ashland, Oregon, has been living in Portland with his wife. He has been allowed to travel between Portland and Ashland, according to the defense.

Prosecutors have indicated they will seek an order to force Seda to report to prison quickly should the appeals court rule against granting him bail.

Prosecutors say Seda's dual citizenship could allow him to get an Iranian passport and flee. He's a native of Iran who also holds U.S. citizenship.