The head of a Chicago-based Muslim charity has pleaded not-guilty to charges of fraud and racketeering. Enam Arnaout appeared in federal court on Friday.

Enam Arnaout heads the suburban-Chicago based Benevolence International Foundation, which he says collects money for humanitarian works in Muslim countries.

Earlier this month, United States Attorney General John Ashcroft announced charges of fraud and racketeering against Mr. Arnaout. He says the charity used some of its donations to support Osama bin Laden, his al-Qaeda network, and other armed groups. "Arnaout is accused of defrauding charitable contributors by falsely claiming that the Benevolence International Foundation used donated fund solely for humanitarian relief," said Attorney General Ashcroft . "In fact, funds were being used to support al-Qaeda and other groups involved in armed violence overseas."

In court Friday, Mr. Arnaout said he was not guilty of the charges against him, which could cost him 90 years in prison if he is convicted. His lawyers have called the government's charges a collection of falsehoods, half-truths and guilt by association.

Mr. Arnaout was arrested in April on charges of perjury for allegedly lying about his links to terrorist groups. In September a federal judge dismissed those charges, though new, similar ones have since been filed.

Last December, federal agents raided the Chicago-area headquarters of the Benevolence International Foundation. They seized foundation records and froze its assets.

Mr. Arnaout is being held in the U.S. government's jail in downtown Chicago. He is not allowed to move from his cell without a three guard escort.