WASHINGTON, May 12 - Last December, after a high-profile federal terrorism prosecution in Detroit collapsed amid accusations of government misconduct, the Justice Department resorted to a backup plan. Prosecutors brought much less serious charges of insurance fraud against a pair of one-time terror suspects from Morocco, accusing the men of falsely reporting injuries in a minor car accident.
Prosecutors said at the time that they viewed the insurance scam as a serious offense. But internal Justice Department memorandums show that senior prosecutors had serious doubts about the strength of the case and recommended against bringing it, only to have the department go ahead with the lesser charges.
Bringing the fraud case "would appear to be vindictive," a senior federal prosecutor in Detroit wrote in an e-mail memorandum to senior Justice Department officials in 2003. The same prosecutor wrote that the F.B.I. believed that the move would harm counterterrorism efforts among Muslims and "may actually encourage extremists."
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The e-mail messages were provided to The New York Times by an official in the case who asked for anonymity because of a judge's order against talking to the news media about the case and pending criminal investigations in the case.
http://nytimes.com/2005/05/13/politics/13terror.html