A federal judge has temporarily blocked Prince Bandar from moving money gained from his Aspen real estate sales to Saudi Arabia and other locations outside of the United States.

 U.S. District Judge Rosemary Collyer issued a temporary restraining order on Feb. 5 in response to a class-action lawsuit claiming that Prince Bandar acquired his Aspen real estate holdings with "illegal bribe payments" from a British defense company,BAE Systems PLC.

Prince Bandar has denied the payments were illegal or were bribes, but instead maintains they were legitimate government funds audited by the Saudi Ministry of Finance.  

The legal team suing Prince Bandar and the officers and directors of BAE filed an "emergency application" for the restraining order because they claimed, despite the slowing Aspen realestate market, that Prince Bandar "has the ability to instantaneously sell the rest of the U.S.-based property interests he holds and transfer the proceeds out of the country."

A hearing to determine whether the order should be extended is scheduled for Thursday at 3 p.m. in Washington, D.C.

 "The $167.4 million in U.S.-based real estate Bandar continues to hold was acquired using the billions of dollars inillegal BAE bribe payments obtained from BAE," the emergency application stated.

The $167.4 million figure presumes Prince Bandar's main Starwood estate is worth $135 million, even though it didn't fetch that price while listed on the market for over a year.

The lawsuit against Bandar claims that BAE leaders knew they were making illegal payments to Prince Bandar as partof an $86 billion arms deal in 1985 that amounted to "intentional, reckless and/or negligent breaches of fiduciary duty," which, the lawsuit alleges, wasted BAE's assets and hurt shareholders.

The lawsuit naming Bandar was filed in U.S.District Court in September on behalf of the city of Harper Woods Employees' Retirement System, which was a BAE shareholder. Harper Woods is a suburb of Detroit, Mich.

The lawsuit was filed against the officers and directors of BAE Systems PLC, Prince Bandar and PNC Financial Group, the successor to Riggs Bank of Washington.

Money spent in Aspen
    

"The illegal bribe/kickback payments were received and spent by Bandar here in the U.S., including over $100million to build one of the largest and most lavish personal residencesin the U.S., located in Aspen, Colorado, and known as 'Hala Ranch,'" charged plaintiffs attorney Roger Adelman of Washington, D.C., in the application for the restraining order.

"While Bandar amassed his palatial Colorado estate, many questioned exactly how Bandar could afford the lavish estate, the 50 full-time workers Bandar employed there, the entourage that accompanied his and his family's increasing visits to Aspen, andthe hundreds of thousands of dollars Bandar was handing out in the Aspen community on an ambassador's salary," the application stated.

But Bandar was always more than an ambassador.

Bandar is the grandson of the founder of Saudi Arabia, King Abdul, also known as Ibn Saud. He is married to the daughter of the late King Faisal. And his father, Prince Sultan, is now next in line to the Saudi throne.

His Royal Highness Prince Bandar bin Sultanbin Abdulaziz served as Saudi ambassador to the U.S. from 1983 to 2005, when he was appointed secretary general of the Saudi National SecurityCouncil.

Prince Bandar bought his main Starwood property in 1989 and the 56,000-square-foot home on the property was finished in 1991.

In 2006, Bandar listed the primary residence for sale for $135 million, but pulled it off the market in November.

A month later, Bandar sold another home in Starwood he had built for one of his daughters for $36.5 million and also sold two other Starwood properties near his main estate for atotal of $49 million.

 "Those sales proceeds have already likely been transferred to Saudi Arabia or other countries outside of this Court's grasp," wrote attorney Adelman in his application for the restraining order.

"In addition to Hala Ranch, Bandar purchased (using bribe payments) and continues to own at least two other private residences in Aspen, 22 units at the Aspen Inn that are used by his staff, and an office suite that houses his Aspen lawyer," the application for the restraining order stated.

The condo units are at the Inn at Aspen at the base of Buttermilk.

Bandar's Aspen attorney, William Jordan III, has a second-floor office on the Cooper Avenue mall.

The restraining order specifically names Jordan and "realtor Josh Saslove" of Aspen-based Joshua and Company, along with Bandar and "his agents, attorneys and others representing him" in its requirement that any money from past or upcoming real estate sales remain in "U.S.-based accounts."

Bandar, Saslove and Jordan could not bereached for comment on Monday. Nor could attorneys for Bandar and the city of Harper Woods pension fund.

Judges and lawyers

Without ruling on the larger merits of the case, Judge Collyer found that the complaint against Bandar "... at a minimum, raises serious questions of law concerning whether Prince Bandar may be required to return the bribe payments and profits on those payments to BAE."

However, the court denied a request for an "immediate accounting of payments BAE made to Prince Bandar, including the present form and location of those funds ... ."

The restraining order doesn't prevent the sale of any of Bandar's real estate, but requires that any resultingmoney not be transferred out of the country.

The suit was filed by attorneys with the San Diego law firm of Coughlin, Stoia, Geller, Rudman and Robbins.

The firm was founded in 2004 by William S.Lerach, a well-known class-action attorney who resigned from Coughlin, Stoia in October shortly before pleading guilty to one count of conspiracy to obstruct justice and make false statements.

He confessed to being part of a scheme while at the law firm of Milberg Weiss to pay clients who filed class-action lawsuits against companies. Lerach, 61, was sentenced Monday by afederal judge in Los Angeles to two years of probation, 1,000 hours of community service and $250,000 in penalties.

Bandar claims innocence
    

Through a London law firm in June, Prince Bandar denied any wrongdoing regarding the BAE payments.

 "The accounts at Riggs Bank were in the nameof the Saudi Arabian Ministry of Defense and Aviation (MODA)," Bandar's statement said. "Any payments into those accounts made by BAE were pursuant to the Al-Yamamah contracts and as such would not in any way have been secret from the parties to those contracts.

"Whilst Prince Bandar was an authorized signatory on the accounts any monies paid out of those accounts were exclusively for purposes approved by MODA," the statement said.

 Also in June, BAE issued a statement saying the payments were proper.

 "The Al-Yamamah program is a government-to-government agreement and all such payments made under those agreements were made with the express approval of both the Saudi and the U.K. governments," the statement said.

Britain's Serious Fraud Office was investigating the Al-Yamamah deal but closed their review in December 2006.

Last month, a British intelligence report disclosed that the investigation into the arms deal was closed because the Saudis might stop sharing valuable information with British officials about terrorism.

In September 2007, the Saudis agreed to buy 72 fighter jets from BAE for almost $9 billion.

The U.S. Department of Justice is now investigating the Al-Yamamah matter and the payments to Prince Bandar.

 Prince Bandar has hired attorney Brad Reynolds of the Washington, D.C., law firm of Howrey LLP to represent him in the city of Harper Woods lawsuit and presumably to help with the Justice Department investigation.

 Reynolds is a former U.S. assistant attorney general with "extensive experience counseling clients on criminal andcivil matters under investigation by the U.S. Department of Justice," according to the firm's Web site.

Attorneys for the BAE officers and directors have recently moved for dismissal of the city of Harper Woods lawsuit, saying that the pension fund does not have standing and that decisions made by officers of an English company should be reviewed in Englishcourts.

bgs@aspendailynews.com