Man arrested as unregistered Pakistan agent

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WASHINGTON - A man was arrested Tuesday on the charge that he was part of a conspiracy to act as an agent of Pakistan in the United States without revealing his affiliation with the Pakistani government as required under law, the Department of Justice said in a statement. Sources told CBS News that the man is not a spy.

Syed Fai was arrested on charges of being an unregistered agent of a foreign government. Also known as Ghulam Nabi Fai, he is the executive director of the Kashmiri American Council (KAC), which India has viewed for many years as a front for the Pakistani government.

In an affidavit filed with the criminal complaint, said the Justice Department, the Kashiri American Council is one of three "Kashmiri Centers" that is operated within elements of the Pakistani government, including the Inter-Services Intelligence Agency (ISI), Pakistan's intelligence agency.

According to the Justice Department, a confidential witness told investigators that he was part of a plan to shroud the money transferred by ISI to Fai to use as a lobbyist on behalf of the KAC to further Pakistan's interests.

"Mr. Fai's alleged conduct illustrates the risk to our fair and open government," said FBI Assistant Director in Charge McJunkin in a press release. "The charges underscore the dedication of Special Agents who enforce laws ... that are designed to detect and defeat those who attempt to surreptitiously exert foreign influence on our government by using agents who conceal their foreign affiliations."

Though the charges are not related to espionage, the arrest adds new strain to the already difficult relationship between the U.S. and Pakistan, which suffered after the U.S. found Osama bin Laden hiding inside Pakistan and killed him without telling the government there.

Pakistan's Inter-Services Intelligence has a complicated relationship with U.S. intelligence. The agency is a crucial ally in the war on terrorism but also works against the U.S. at times, including running double agents against the CIA.

An ISI liaison to the media declined immediate comment.