more than twenty stories tall in Sherman Oaks, California, in the San Fernando Valley, just over the chaparral hills from Hollywood. When he was in Los Angeles, Khalil worked at the Sherman Oaks office from time to time, but mainly he delegated day-to-day management to his American executives and employees. By the late 1980s, Alex Cappello had faded from the scene. He was replaced by Franklin Frisaura, a real estate broker who was Khalil’s brother-in-law—Frisaura had married Isabel Bayma’s Brazilian sister, Regina, whom he had also met at a Los Angeles nightclub. Frisaura brought a touch of entertainment-industry cachet to the Bin Laden enterprise. He had grown up in Southern California; his father was a comedian, and his mother, after performing as a young adult in the Ringling Bros. and Barnum & Bailey Circus, had also earned a living as an entertainer. Frisaura had attended junior high school with the sons of Mo Austin, the former president of Warner Brothers Records. The Bin Ladens had accommodated relatives by marriage in jobs at their various enterprises for almost a half century, and Frisaura followed in this tradition; he served as an adviser and manager for Khalil on real estate and other business projects.8
America in Motion made an initial foray into tax-oriented aircraft leasing, but this did not turn out very well. One early customer was Steven McKim, the president of a small Northern California company, Magnum Aircraft International, whose investors included Clint Eastwood, the actor then renowned for his
In any event, soon after its purchase, Magnum stopped making lease payments. America in Motion sued. Khalil Bin Laden’s lawyers named as defendants not only McKim but also Clint Eastwood. The lawsuit was ultimately dismissed without a judgment against the actor-director or the payment of any settlement. America in Motion wound up in possession of an old jet suitable for aviation hobbyists.9
In addition to his brother-in-law Frisaura, Khalil relied for advice upon Musarrat Ali-Khan, a somewhat mysterious figure with a colonial-era mustache who was described in one court document as “a chartered accountant in Pakistan” who had later settled in Jeddah as an employee of the Bin Laden family. When Khalil first opened his Toyland stores in Saudi Arabia, Ali-Khan worked with him there. Later he moved to Los Angeles to help run America in Motion. Khalil paid him a salary of more than five thousand dollars per month. Ali-Khan looked around for business deals that might interest his employer. During the summer of 1988—in the same months that Osama Bin Laden was secretly forming Al Qaeda back in Ali-Khan’s native country of Pakistan—he arranged an unusual investment for Khalil involving some Massachusetts prison facilities.10
The deal revolved around a company called Resun Leasing, which was headquartered in the Virginia suburbs of Washington, D.C. Founded in 1986, Resun specialized in premanufactured modular buildings for use by governments, schools, hospitals, and businesses; its projects ranged from small offices for security guards to huge warehouses. To avoid tying up too much of its cash, the company looked for private investors willing to participate in its leasing contracts. America in Motion purchased what a court document described as “an undivided one-half interest in certain prison facilities leased to the Commonwealth of Massachusetts” in Hampden and Hampshire counties.11
The price was just over $500,000. Khalil raised the money by borrowing $770,000 from the Banque Indosuez. Resun then returned the difference to Khalil—more than $200,000—in a transaction that Bin Laden referred to as a “rebate,” but which Ali-Khan called a “kick back,” although it was not clear what he meant by that term. Khalil apparently used the extra cash to pay down separate debts to Banque Indosuez. His obligations in Los Angeles were beginning to pile up; for example, his total debts to Banque Indosuez exceeded $3 million, according to a letter written by Ali-Khan to Khalil in 1989. Khalil eventually went into technical default on some of this debt; he sought to sell some of his Los Angeles investment properties to pay off his loans.12
In May 1989, America in Motion renegotiated its prison-leasing deal with Resun. As part of the financial transfers generated by this refinancing, one of Khalil’s attorneys in Beverly Hills, Ron Goldie, accepted into a trust account a sum of $227,500, according to court filings. Goldie then agreed to pay $130,000 of this money to Musarrat Ali-Khan, who claimed it was owed to him as part of oral business agreements he had made with Khalil. The confusion was compounded by the fact that Khalil was attempting to monitor the prison transactions by fax and telephone from Jeddah, where he had returned for the winter and spring.
On BIN Corporation and America in Motion Corporation stationery, Ali-Khan wrote several times to Khalil in Jeddah, providing a history of convoluted financial transfers that had culminated with his receipt of the $130,000, which he described as a “loan” that had been made to BIN Corporation on “my personal guarantee.” Khalil faxed back a series of skeptical questions. “Please provide me with the following details of this said loan,” he wrote, including “the purpose for which we get this loan…actual utilization of this loan…when we got this loan…who is the creditor…If there was a loan agreement, fax me a copy.” Ali-Khan tried to satisfy him but failed. In early June, Khalil wrote to him from Jeddah: “The faxes you sent to us…are still vague and I disagree on many of the contents. Please provide us full details of information especially on the $130,000 loan you said you personally guaranteed.”13
Khalil flew into Los Angeles, talked to the lawyers and executives involved, and concluded that “the $130,000 was fraudulently taken by Khan,” as he put it in a written declaration later filed in court. Ali-Khan stopped coming to work. On September 22, 1989, Khalil Bin Laden drove to the Van Nuys police station in the San Fernando Valley, approached an officer working at the counter, and asked to file a criminal complaint. With this act, he took yet one more step into the mire of the American legal system. Khalil had initially been unsure “if this could be criminal or just civil,” that is, a situation where he should just sue Ali-Khan to try to get his money back, rather than going to the police. He had decided, however, that he was the victim of a crime under American law. The police “sent me upstairs, and upstairs they sent me back down,” Khalil remembered. Finally, “One of the policemen told me, ‘Okay, fill this form.’”14
Following an investigation, the Van Nuys district attorney did indict Ali-Khan on charges of felony embezzlement, and the police issued a warrant for his arrest. Prosecutors argued in one court filing that the Pakistani was a “possible international thief…wanted for bank embezzlement in Paris.”15
Khalil also sued in civil court. Ali-Khan hired lawyers who summoned Khalil to a conference room in a skyscraper in downtown Los Angeles for five grueling days of deposition testimony in July 1990. Ali-Khan’s lawyers grilled Bin Laden about the history of America in Motion, his outstanding loans from Banque Indosuez and other banks, his decision to pursue criminal charges at the police station—they even asked whether Khalil had a vendetta against his former employee because they had both become interested in the same woman at the Sherman Oaks office. (“No,” he answered.) One of the lawyers involved in the examination later described, in a written declaration, the scene that unfolded in the skyscraper’s conference room as the interrogation proceeded:
At some point, Mr. Binladin claimed that I was asking the same questions over and over again…and seemed to be becoming agitated. I then asked a question and, while pondering his response to it, Mr. Binladin got out of his chair and walked around the deposition room to a spot near and behind me and then back to the general area where Mr. Finkel [his lawyer] was sitting…Mr. Grimwade made a comment on the record to the effect that the record should reflect that the witness was pacing…At that, there was a heated exchange…Mr. Binladin (at about 1:40 P.M.) broke into tears, sobbing, holding his head in his hands, with Mr. Finkel claiming on the record that I had “made” his client cry…16
“The tears in my eyes were real,” Khalil recalled. The opposing lawyers were “disrespectful of both me and my attorney”; they made “nasty comments” and asked “questions full of innuendo”:
The repeated questioning and harassment finally got to me…The stress relates not…to “kickbacks” or my conduct, but rather, to the continuing barrages of questioning…which are intrusive into my personal life… 17
It was enough to make a man nostalgic for shariah courts. Nor had Khalil yet discovered the limits of his aggravations.
