A federal judge in Chicago has dealt the Justice Department a stinging blow in yet another case it had promoted as one involving terrorist activities.

In a sharp blow to the government, a judge refused Thursday to add as much as a dozen years to the sentence of an Islamic charity director linked to Osama bin Laden, saying his racketeering offense was not a crime of terrorism.

Enaam Arnaout, 41, would have been sentenced to 20 years under federal guidelines calling for tougher prison terms for those convicted of terrorism offenses.

Judge Suzanne B. Conlon ruled, however, that the terrorism guideline does not apply in Arnaout's case. He was not convicted of a terrorism offense, she said, "Nor does the record reflect that he attempted, participated in, or conspired to commit any act of terrorism."

Defense attorney Joseph Duffy said the decision "pretty much vindicates what the defense has claimed from the inception, and that is that neither he nor his charity had anything to do with terrorism."