CHICAGO, Feb. 11 (JTA) — Jewish community leaders here reacted with satisfaction to this week’s outcome of a federal counter-terrorism case involving the head of a Chicago-based Islamic charity. Enaam Arnaout, whom prosecutors have linked to Osama bin Laden, entered a surprise guilty plea to racketeering conspiracy at a federal courthouse in Chicago on Monday, admitting in court that not all money collected by his organization went to humanitarian causes. Arnaout, the director of the Benevolence International Foundation, entered his guilty plea to the first count of the indictment, just as U.S. District Judge Suzanne Conlon was about to begin jury selection for the trial. Federal prosecutors dropped the remaining counts of the seven-count indictment, including the charge that Arnaout used his foundation to help bin Laden’s terrorist network, Al-Qaida. The trial, which had been expected to last a month, attracted much media attention in Chicago, in part because the prosecution had planned to bring in overseas testimony. The Arnaout case has been watched closely by the Jewish Community Relations Council of the Jewish United Fund/Jewish Federation of Metropolitan Chicago Since the early 1990s, the JCRC has played an active role in tracking several Illinois-based Islamic organizations with alleged links to terrorism abroad. “The Arnaout trial marks a significant turning point,” said Michael Kotzin, executive vice president of the Chicago federation. It is the first federal criminal trial dealing with support for international terrorism, he noted. “This development sends the message that — especially post 9/11— the U.S. government takes this matter seriously and that it is focused on drying up the sources of funding in this country for international terrorism,” he said. “And hopefully the government will now be able to obtain helpful specific information from Arnaout,” who has agreed to cooperate with authorities. U.S. Attorney General John Ashcroft said of the outcome: “The guilty plea makes clear we will prosecute and imprison those who would exploit the generosity of charitable donors to provide financing for violence overseas. “We will shut down terrorist funding sources. We will ensure that terrorist sympathizers who fund violence or terrorism meet swift, certain justice.” Arnaout, a Syrian-born U.S. citizen, admitted that for about a decade, his organization has been defrauding donors by leading them to believe that all donations were being used strictly for peaceful, humanitarian purposes. He said that a material amount of the funds were actually being diverted to buy supplies for Jihad fighters in Chechnya and Bosnia-Herzegovina. The foundation has been effectively shut down since the Treasury Department linked it to terrorist financing after the Sept. 11 attacks, freezing its assets. Attorneys for Arnaout assert that only a small portion, about $300,000-$400,000 of the $20 million raised by the foundation, was provided to the Bosnian army and Chechen fighters. Patrick Fitzgerald, U.S. attorney for the Northern District of Illinois, said Monday’s outcome signaled a major turn of events, given that the Benevolence Foundation had initially sued in court when the federal government froze its assets. The group had claimed it had done nothing wrong and that the process had been abused, Fitzgerald said. Arnaout faces a maximum sentence of 20 years in prison and a $250,000 fine. At a news conference immediately after the plea was entered, Joseph Duffy, Arnaout’s defense attorney, said that Arnaout believes he couldn’t receive a fair trial by jury considering the constant media frenzy surrounding Al-Qaida, the recent heightened terror alert status and “the constant drumbeat of war with Iraq.” “One has to question whether a fair and impartial jury could be found anywhere in America today that could sit in judgment of an Arab American in a case involving allegations of terrorism,” said Duffy. Fitzgerald responded in a later news conference that the notion that Arnaout couldn’t get a just trial was “nonsense,” and pointed to the fairness of the jury system. While Arnaout and his attorneys deny any links to Al-Qaida or bin Laden, the federal prosecution holds steadfast to its allegations that his foundation had ties with Al-Qaida and is prepared to present that evidence at sentencing. During the news conference, Fitzgerald referred to a list of evidence — including documents and photographs — that he said links the foundation to Al-Qaida. A hearing to discuss Arnaout’s sentencing is set for March 10.