A woman allegedly at the center of a phony driver’s license scheme linked to Middle Eastern men prosecutors say have connections to the World Trade Center disaster has turned up dead.

Tennessee license examiner Katherine Smith’s burned body was found Sunday in the wreckage of a car that appears to have been torched, say authorities. She was to testify the next day before a federal magistrate judge for a detention hearing on a charge of conspiracy to obtain fraudulent identification documents.

Smith and five co-defendants were arrested Feb. 5 after they left a state driver testing station. Prosecutors said Smith had processed four driver’s license applications that morning based on false information provided by co-defendant Khaled Odtllah, 31, of Shelby County.

At Monday’s hearing, federal prosecutor Tim DiScenza described Smith’s death as “most unusual and suspicious.” He also said two of her co-defendants had “connections” to the World Trade Center, which was destroyed in the Sept. 11 terrorist attacks.

Smith, describing Odtllah as a friend, told authorities that he had asked her to help him obtain driver’s licenses six or seven times before.

Co-defendants Mohammed Fares, Mostafa Said Abou-Shahin and Abdelmuhsen Mahmid Hammad are scheduled to appear before a federal magistrate judge today. The FBI said the men drove to Memphis from New York last week to get Tennessee driver’s licenses. Their ages and addresses were unavailable.

Odtllah and Sakhera Hammad, 24, of New York City, the other alleged middleman, made their appearance on Monday, when they were ordered held without bond until trial.

The FBI has custody of Smith’s charred Acura, which she bought from Odtllah, at an undisclosed location in Memphis, said Memphis FBI spokesman George Bolds.

“(Smith) was the subject of a pending FBI investigation. Her death coming at the time it did is very coincidental. We’re looking at that,” Bolds said. “As best we can, we’d like to recreate what happened and try to determine whether or not there was any sort of foul play in connection with her death or whether it was an auto accident.”

Smith, 49, authorities say, was probably alive after her car hit a utility pole Sunday. They believe her car was deliberately torched.

The Highway Patrol and the FBI are reportedly continuing a joint investigation into the one-car crash, according to the Memphis Commercial Appeal. The agencies are also working together in the ongoing criminal investigation into the fraud charge.

Fagan said investigators want to know if the fatal car wreck and the driver’s license scheme “intertwine criminally,” or if Smith’s death was a coincidence.

“We’re not ruling out anything. We’re looking at all aspects of that investigation,” he told the Commercial Appeal. “We have a crash. We have a car that’s hit a pole and we know it burned. Now, what sequence – that’s part of the investigation.”

Attorney Anthony Helm, representing Odtllah, accused DiScenza of raising the terrorism issue based solely on the Middle East origins of Smith’s co-defendants. While Smith was released on her own recognizance pending Monday’s hearing, her co-defendants have remained in federal custody since their arrest.

Citing a report from the Shelby County Medical Examiner’s Office, Fagan said Smith was identified through dental records and that there was evidence she had inhaled smoke. To a layman, Fagan said, the evidence suggests Smith was alive when the car caught fire.

“You obviously would have to be breathing to inhale smoke, which would tell you that she was not deceased prior to impact,” he said.

Gene Marquez, resident agent in charge of the Memphis office of the federal Bureau of Alcohol, Tobacco and Firearms, said the ATF is contributing an ATF-certified fire investigator cross-trained as an explosives expert.

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