The owner of a limousine company involved in a fatal crash was a paid government informant, it has emerged.

Saturday's crash in Schoharie, New York, left 20 people dead including four sisters who had been on the way to a birthday party with relatives and friends.

It has also been revealed that the vehicle involved in the crash failed a safety inspection in September and that the driver was not properly licensed.

As the state of New York moved to shut down the company, Prestige Limousine, it emerged that its owner Shahed Hussain was an FBI informant who helped agents to investigate domestic terror threats.

Image: Eighteen people in the limousine were killed, as well as two pedestrians

Mr Hussain came to the US from Pakistan in the 1990s and settled in Albany where he was granted asylum along with his wife and two sons, according to evidence he gave in a previous trial.

In 2003, he was working as a government translator when he pleaded guilty to fraud after helping someone cheat on their driving test.

But he agreed to work as an FBI informant and served no jail time.

Driver Scott Lisinicchia died in the crash
Image: Driver Scott Lisinicchia died in the crash, along with 19 other people

He helped authorities target an Albany pizza shop owner and an imam, both of whom were convicted of money laundering and conspiring to aid a terrorist group.

Both men said Mr Hussain, 62, had tricked them, however.

In 2009, he was behind another sting that saw four men convicted of planning to bomb synagogues and shoot down planes.

This operation had focused on a Newburgh mosque where Mr Hussain posed as a wealthy representative of a terrorist organisation from Pakistan.

Aunt of four victims Barbara Douglas 0:21
Video: Four sisters killed in limo were 'fun-loving'

The FBI supplied him with luxury vehicles to help him play the part.

Wearing a wire, he helped make tapes of the defendants choosing targets and ranting against Jewish people.

But defence lawyers said he was a master manipulator who entrapped a group of nobodies while earning $96,000 (£73,000).

US District Judge Colleen McMahon said at the time: "I believe beyond a shadow of a doubt that there would have been no crime here except the government instigated it, planned it and brought it to fruition.

"That does not mean there was no crime."

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Albany-based lawyer Dana Salazar, who represented Mr Hussain in an unrelated civil case, confirmed to the Rochester Democrat & Chronicle on Monday that her client was the informant.

The FBI has declined to comment.

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