Chicago man knew of Mumbai attack beforehand

A man walks past Tahawwur Hussain Rana's office, which says ''Immigrant Law Center'' in Chicago, October 28, 2009.

CHICAGO (Reuters) - A Pakistani-born Chicago businessman charged with helping plan an attack on a Danish newspaper knew about the assault on Mumbai in advance and discussed other potential targets in India, prosecutors said on Monday.

In arguing against releasing Tahawwur Rana from jail on bond, federal prosecutors in Chicago gave more details about a conversation authorities recorded earlier this year between Rana and accused conspirator David Headley.

In the September 7 conversation during a long car drive, Rana, 48, and Headley, 49, discussed Rana's meeting in Dubai days before the November 2008 attack on Mumbai with an associate referred to as "Pasha," the nickname for Abdur Rehman Hashim Syed, a retired major in the Pakistani military, prosecutors said.

Rana also asked Headley to pass his compliments on to the coordinator of the Mumbai attacks, which killed 166 people, the court filing said.

"Rana was told of the attacks before they happened and offered compliments and congratulations to those who carried them out afterwards," prosecutors said.

Travel records showed Rana, a Canadian citizen, was in Dubai days before the Mumbai attack, they said.

Headley, a U.S. citizen with Pakistani-American parentage, is accused of making five scouting trips to Mumbai on behalf of militant Pakistani groups including Lashkar-e-Taiba, which is blamed for the Mumbai assault. Headley allegedly used Rana's travel and immigration business as a cover during his trips.

Syed has been accused by U.S. authorities of being Headley's contact with Ilyas Kashmiri, described as "one of Pakistan's most wanted terrorists and a direct link to al Qaeda," in court documents.

Headley and Rana also discussed four other potential targets -- the Danish newspaper that published cartoons offensive to Muslims in 2005; Bollywood, India's film industry; Somnath, a temple in India; and Shiv Sena, a political party with roots in Hindu nationalism.

Prosecutors said Rana later lied to investigators after he was arrested, saying his conversation with Headley was about potential business ventures.

Asked about Mumbai, Rana told investigators he was vaguely aware of the attacks but that he and "Pasha" had discussed the fighting in the disputed territory of Kashmir.

His lawyer said Rana was "duped" by Headley, who is cooperating with authorities, and that Rana was a peaceful man and a member of the Iqbal Society, which adheres to a non-violent philosophy.

Rana's case is 09 CR 849.

(Reporting by Andrew Stern; Editing by Cynthia Osterman)