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U.S. Agents Get Arrest Warrant for Khashoggi : Saudi Financier, Wanted in Marcos Fraud Case, Is Reported to Be ‘Lying Low’

Times Staff Writers

Federal agents have obtained an arrest warrant for Adnan Khashoggi amid signs that the Saudi Arabian financier does not intend to surrender voluntarily to face American fraud and racketeering charges filed against him and former Philippine President Ferdinand E. Marcos, sources have told The Times.

On Thursday, authorities were seeking to learn the whereabouts of Khashoggi, who is said to be “lying low” in a European country while conferring with legal and business advisers about how to respond to the New York grand jury indictment.

Federal officials are trying to prevent Khashoggi from relocating to any country without formal extradition agreements with the United States, sources say.

Sources close to Khashoggi acknowledged Thursday that he is considering returning home to Saudi Arabia. They said he is confident that he will be vindicated but is concerned about the prospect of immediate arrest, detention and extradition to the United States.

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“He’s got to make some very difficult decisions in the next few days,” one associate said.

The arrest warrant is symbolic of the fall of the one-time high-flying international businessman, whose name had become synonymous with the wealth and power of the Arab world during the 1970s. The indictment by a federal grand jury in Manhattan last week was only the latest in a string of problems besetting Khashoggi, who was once reputed to be “the world’s richest man.”

Since the early 1980s, but especially in the past three years, Khashoggi’s multimillion-dollar empire has crumbled into a pile of debt. The current federal charges complicate efforts to reorganize his troubled financial affairs, whether he is jailed or tries to operate as a fugitive.

U.S. prosecutors are accusing Khashoggi of acting as a front for Marcos to help divert assets and conceal Marcos’ ownership of real estate and valuable art.

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In New York, meanwhile, a federal judge Thursday partially rejected a request by Marcos to surrender to authorities in Honolulu, where he and his wife, Imelda, have lived since fleeing the Philippines in 1986.

Defense attorneys argued that the 71-year-old deposed dictator is too ill to travel the long distance to the East Coast and that arraignment in Hawaii would avoid the “circus atmosphere” of New York.

U.S. District Judge John F. Keenan delayed Marcos’ arraignment until a court-appointed doctor can examine him. However, he ordered Imelda Marcos to appear in New York as scheduled Monday morning.

The deadline was expected to be applied to each of the 10 individuals indicted in the case. But Robert Morvillo, a New York-based attorney for Khashoggi, dismissed Oct. 31 as “no magic date for us.” He said Khashoggi’s busy international schedule made him “not terribly accessible” even to his own attorneys.

Morvillo also dismissed reports that federal authorities were mounting an international effort to arrest Khashoggi, who could be taken into custody in virtually any Western European nation based on a federal arrest warrant issued in New York. “Wow, I’m scared,” he said sarcastically.

The fact that federal prosecutors sought a Khashoggi arrest warrant so soon--even before the expiration of the Oct. 31 deadline originally set for the Marcoses’ surrender--reflects the belief of federal law enforcement sources that Khashoggi was not planning to turn himself in to authorities.

Also, they expressed concern that if they failed to intensify efforts to apprehend Khashoggi, he could seek legal haven in a country without an extradition treaty.

France, Britain and Spain--countries in which Khashoggi maintains his primary residences--all have extradition agreements with the United States. However, his native Saudi Arabia has no such treaty.

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Morvillo conceded that if the government pursues Khashoggi’s extradition, “it will make life awkward for him” by curtailing his freedom to travel.

“His business is peculiar and his contacts are peculiar, so maybe he can still operate in a way that he doesn’t have to go out and meet people--they can come to him,” Morvillo said. “But just as a matter of logic, from the plain facts, you’d have to say he’s got a serious problem.”

The financially beleaguered Khashoggi, an international arms dealer who was a key middleman in secret White House-sanctioned sales of arms to Iran, has been struggling to stop the dismemberment of his empire around the world.

In recent months, he has been forced to sell, abandon or lose to repossession his ranch property in Kenya, his Park Lane offices in London, his luxuriously appointed DC-8 “flying penthouse” and his $50-million yacht Nabila, named after his daughter.

Substantial portions of Khashoggi’s American business interests are tied up in bankruptcy proceedings. His penthouse apartment in New York’s posh Olympic Tower is the target of a Justice Department forfeiture claim, as are other of his assets.

And besides the criminal action filed against him in New York in connection with his role in the Marcos case, Khashoggi also is under investigation by authorities investigating separate but related allegations in France and Switzerland.

The latest charges and resulting arrest warrant simply underscore the observation of one aide who told The Times last spring: “Adnan is under siege--even more than he knows. The poor man’s never going to get out from under.”


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