(Reuters) - The Arab-American head of a Dearborn, Michigan community center was arrested by local police on suspicion of being wanted for funneling money to Lebanon's Hezbollah, but was later found to be the wrong man and released, the FBI said on Saturday.

Ali Hammoud, the head of the Bint Jebail Cultural Center, was taken into custody on Friday at his home on an arrest warrant, said Dearborn police Sergeant Edward Fries.

The FBI said the identifying information, including his name, that Dearborn police relied on when officers arrested him matched that of a man wanted on an outstanding warrant, said FBI spokeswoman Sandra Berchtold. FBI agents later met with Hammoud in custody.

"He was determined to not be the person identified in the warrant," Berchtold said.

Hammoud's arrest on Friday and his release on Saturday galvanized the Arab-American community in greater Detroit, said his attorney Majed Moughni.

"He was released within 12 hours because they realized they had a hot potato and this was something they did not want to deal with," Moughni said. "They had a very angry community who was sick and tired of seeing this witch hunt."

Hammoud, who is in his mid-60s, has previously been misidentified as the man with the same name wanted in a federal indictment that accuses 18 individuals of running a cigarette smuggling ring to funnel money to the militant group Hezbollah in Lebanon, Moughni said.

Hezbollah, a militant group in Lebanon backed by Iran and Syria, is on the U.S. State Department list of organization's it says support terrorism.

Moughni said his client's community center is well known in greater Detroit and that it largely serves immigrants from a village in southern Lebanon, where Hammoud was born.

The Ali Hammoud identified in the indictment has fled to Lebanon, Moughni said.

The circumstances of Hammoud's arrest were unclear. The FBI and Dearborn police said that he was arrested after a traffic stop, but Moughni said that his client returned home from dinner and found police waiting outside his home.

"This is a very respected community leader, he's well liked, well known," Moughni said.

Moughni said his client, who has three sons who are doctors, is declining to speak to the media.

(Reporting by Alex Dobuzinskis: Editing by Greg McCune)

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