Neo-Nazi Leader Was Investigated for Supporting Al Qaeda

August B. Kreis III, the self-appointed director of the neo-Nazi Aryan Nations, came under FBI investigation after making statements supporting Al Qaeda terrorists, a federal prosecutor revealed Tuesday in U.S. District Court in Columbia, S.C.

The revelation emerged when Kreis pleaded guilty to a federal charge of lying to the U.S. government while drawing military veterans’ benefits. He was getting enhanced benefits from the government he hates even though he only served nine months in the U.S. Navy.

During the brief court hearing, Assistant U.S. Attorney Dean Eichelberger revealed that Kreis became the focus of an FBI investigation after he made public statements aligning himself with Al Qaeda jihadists. “Kreis stated that he and members of his movement desired to join Al Qaeda in its jihad against the United States government,’’ the prosecutor said. “Actions in material support of enemies of the government are criminal, and federal law enforcement investigated whether Kreis was acting on these statements or providing support to Al Qaeda.”

Kreis was not charged with providing material support to foreign enemies.  However, an analysis of his financial records by federal investigators revealed that he had “substantial unreported funds” going into his bank accounts, Eichelberger said. “During 2005, for example, Kreis received approximately $33,669 from sources other than the Veterans Administration, and he failed to report any of the money,” the prosecutor said.

“Furthermore, in an eligibility report that he submitted to the VA on Aug. 29, 2006, Kreis stated that during 2005, he had no income from any source. This false report formed the basis for the crime to which Kreis pleaded guilty.”

Kreis, a 56-year-old longtime racist with former ties to white supremacist Posse Comitatus, peacefully surrendered to the sheriff in Fulton, Tenn., in June after earlier telling federal authorities he was ready to die in a gun battle.

He has been in custody in South Carolina since his arrest on the federal indictment. He was unable to post a $50,000 bond, despite a fundraising effort by fellow racist R. Vincent Bertollini, who came to the financial rescue of Aryan Nations leader Richard Butler more than a decade ago. (Butler, founder of the group, died in 2004. Today, Kreis is one of several people who claim to lead the remnants of what was once one of America’s leading hate groups.)

As a result of his guilty plea, Kreis faces a maximum penalty of five years imprisonment and $250,000 fine. In a written plea agreement, federal prosecutors agreed to not oppose a minimum prison sentence under the Federal Sentencing Guidelines which will be calculated as part of the pre-sentence report.

Federal defender Allen Burnside is expected to ask the court to sentence Kreis to time served when he appears for sentencing. Kreis suffers from diabetes and other health issues and now is confined to a wheelchair.

Eichelberger said the investigation revealed Kreis was receiving an “improved pension” from the VA as a result of his nine-month service in the U.S. Navy.

“Despite his brief service and discharge based on a determination that he was not suited for military service, Kreis qualified for this pension because he served during war time,” Eichelberger said.

The VA’s “improved pension” is based on need, and all recipients are required to report all income from any source. The VA then reduces pension benefits on a dollar-for-dollar basis for any qualifying income. It also uses reported income to determine continued eligibility, Eichelberger said.

U.S. District Judge Joseph F. Anderson Jr., ordered an expedited pre-sentence report, but did not immediately set a date for sentencing.