But investigators needed a reason to arrest and hold Awlaki. They focused on his apparent interest in prostitutes. FBI sources told U.S. News and World Report in 2004 that Awlaki, who had twice been arrested for soliciting prostitutes in San Diego in the 1990s, had been observed crossing state lines with prostitutes in the D.C. area. They thought of invoking the little-used Mann Act, a federal law that prohibits the interest transport of women for "immoral purposes," to arrest him.
Before investigators could detain him, Awlaki left for Yemen in March 2002. Though American-born, Awlaki had spent much of his childhood in Yemen, his parents' home country, returning to the U.S. for college.
By July 2002, however, Awlaki was under investigation because an individual who was "the subject of a Houston JTTF investigation sent money" to Awlaki, according to a document in a restricted government database. Awlaki's name was placed on an early version of what is now the federal terror watch list.
Then investigators realized they had a felony charge on which they could detain Awlaki. They discovered that the U.S.-born cleric attended Colorado State University in the early 1990's on an F-1 foreign student visa, stating on the visa application that he was actually born in Yemen and not New Mexico. This enabled authorities to charge Awlaki with passport fraud, a felony punishable by up to 10 years in prison.
In October of 2002, a federal judge in Denver signed off an arrest warrant for Awlaki.
"We were ecstatic that we were able to get a warrant on this guy," said the former JTTF agent.
However, JTTF investigators were astonished when just days after the warrant was issued, the U.S. Attorney's Office in Denver decided to rescind it. According to the former JTTF agent, members of the terrorism task force were "disappointed and shocked" by the decision. The agent says the supervisory assistant U.S. Attorney on the case, David Gaouette, had been fully briefed on Awlaki's suspected terrorism ties. At the time, Gaouette oversaw all terror cases in the Denver-based District of Colorado, according to a spokesman for the U.S. Attorney's office.
Gaouette, an assistant U.S. attorney since 1989, was appointed by Attorney General Holder this August as the interim U.S. Attorney for Colorado. When asked why Awlaki's arrest warrant had been rescinded, a public affairs officer said Gaouette was unfamiliar with the particulars of the Awlaki case, and would have to research it before he could comment. Gaouette's office did not reply to a request for a copy of the Awlaki arrest warrant. The clerk's office for the U.S. District Court for the District of Colorado was also unable to provide a copy of the warrant, citing the age of the case and the fact that the warrant was rescinded.
Because the warrant was rescinded, authorities say they missed a golden opportunity to detain Awlaki. The morning after the warrant was cancelled, October 10, 2002, Awlaki stepped off a Saudi Airlines flight from Riyadh to New York.