One of the men accused of trying to blow up synagogues around the city appeared in a Manhattan court on Monday.
Family members witnessed as Ahmed Ferhani, 27, did not accept a plea deal.
His attorney says the prosecution has not handed over enough evidence on the undercover officer involved in the case.
She claims the officer's methods point to entrapment, and that Ferhani has a documented history of psychiatric issues.
The prosecution is calling it a "fishing expedition" and "delay tactics."
"From day one we knew that our defense was primarily going to be the defense of entrapment," said Lamis Deek, Ferhani's attorney. "Based on our conversations with the defendant, based on our conversations with witnesses, it was very clear. And even based on the grand jury's refusal to indict on the top count of arson as a crime of terrorism."
The judge has until the next court date to decide if Ferhani is competent to stand trial and whether the prosecution has to hand over the evidence.
Ferhani was caught last year on a wiretap. He is accused of planning to blow up synagogues and buy weapons with another man.