The Kings of the Desert

The International Banking Corporation, in Bahrain, generated billions of dollars while issuing a series of fake loans.Illustration by Shout

When Glenn Stewart enrolled at the University of Oxford, in 1975, he was not a typical first-year student: a twenty-year-old American with mediocre grades, he had taken neither A-level exams nor Oxford’s entrance test. But he had an unusual degree of confidence, and, after securing a strong reference from an English grammar school that he’d attended for a year, he persuaded an Oxford admissions officer to let him in.

Stewart had grown up in the Washington, D.C., suburb of College Park, Maryland, where his father taught chemistry at the University of Maryland. An enterprising kid, he made money on weekends by selling soda in the bleachers at college football games. After Stewart’s junior year in high school, his father went to England on sabbatical and took the family along. As Stewart later wrote in a self-published memoir, “A Gentleman and a Player,” he loved being among foreigners: “I could tell they were bemused by my brashness, never having met a Yank up close before.” After a year at the grammar school, he reluctantly followed his family back home, received his diploma, and completed a couple of semesters at the University of Maryland. America bored him, however, and he sought his fortunes abroad.

At Oxford, Stewart, who was tall and lean, with long brown hair, exuded what one classmate called a “sense of adventure.” He joined a clique of theatre enthusiasts who included Rowan Atkinson, of “Mr. Bean,” and Pierre Audi, a student from Lebanon, who now directs the Dutch National Opera. Audi told me that Stewart had seemed unusually attuned to other cultures. The tumult in the Middle East—the Yom Kippur War, the opec oil embargo—made a strong impression on Stewart. Where others saw a crisis, he glimpsed opportunity. He began intensive study of Arabic and Islamic history. His thesis explored Byzantine-Hamdanid relations in the tenth century and the evolution of the Christian concept of holy war. While Audi was trying to “run away from the Middle East,” he told me, Stewart was charging toward it.

Stewart graduated in 1978. He wanted to pursue a career in intelligence, but the C.I.A. rejected his application. He fantasized about a life in the theatre, but, as he told me not long ago, he decided that “the best thing to do was to go and try to make money first.” He passed the C.P.A. exam and worked briefly as an accountant in San Francisco, where he dated a colleague, Donna Gannon. They married, and in 1983 they moved to Saudi Arabia after he took a job in Khobar, a drab city on the Gulf coast which anchors the country’s oil industry.

After two years, he and Donna moved twenty miles east of Khobar, to the island kingdom of Bahrain. They had two sons. In Bahrain, most Westerners lived in gated compounds, but Stewart and his family rented an apartment in a predominantly Arab neighborhood. Compared with Saudi Arabia, he told me, Bahrain was freewheeling—“really open, with bars in hotels and restaurants.”

In 1989, Stewart got a job with a wealthy Saudi family from Khobar, the Gosaibis. They had made billions of dollars by investing in real estate; by bottling and distributing Pepsi; and by selling steel piping to Saudi Aramco, the national oil-and-natural-gas behemoth. The family business was known as AHAB—the Ahmad Hamad al-Gosaibi Brothers. In the eighties, AHAB had opened a trading house and an investment company in the capital of Bahrain, Manama, which became an Arab financial hub after civil war in Lebanon diminished the allure of Beirut.

Stewart worked at the Gosaibis’ trading and investment companies, specializing in commodities deals and in Islamic finance, which prohibits the sale of debt and the collection of interest on debt. After several years, he developed a relationship with Maan al-Sanea, a son-in-law of the Gosaibis, who was one of the more dynamic executives in the family business. According to Brooks Wrampelmeier, a retired U.S. diplomat who served as consul-general in the Saudi city of Dhahran, the Gosaibis were “traditional types,” but Sanea, who was in his mid-thirties, was a bold entrepreneur, eager to explore “new ways in which money could be moved.”

Over time, Stewart earned Sanea’s trust. “As I performed, he had more confidence in me,” Stewart said. “My job was to raise money and loan facilities, and I did it very effectively.” Their partnership was soon making an astonishing amount of money. But according to a corporate-investigation firm, a team of forensic accountants, and a law firm in Washington, D.C., hired by the Gosaibis, their success wasn’t entirely a reflection of financial skill. Stewart and Sanea, they contend, presided over a business, the International Banking Corporation (T.I.B.C.), that perpetrated a multibillion-dollar fraud—and then left the Gosaibis with the bill.

Stewart and Sanea strongly deny any wrongdoing, and say that ultimate financial responsibility lies with the Gosaibis. (A headline in the Wall Street Journal has characterized the dispute as a “saudi family feud.”) The scandal has inspired litigation in ten countries, with several cases still ongoing. But one thing seems clear: T.I.B.C. issued a series of fake loans, and in 2009 it imploded in spectacular fashion, triggering the largest corporate default in the history of the Middle East.

In the nineteen-seventies, three Gosaibi brothers—Suleiman, Abdulaziz, and Ahmad—oversaw the family business. Abdulaziz, the middle brother, “masterminded the company’s growth,” Michael Field wrote, in a chapter devoted to the Gosaibis in his 1984 book, “The Merchants: The Big Business Families of Saudi Arabia and the Gulf States.” Abdulaziz had five daughters and a son. In 1980, one of his daughters married a distant relative from Kuwait: Maan al-Sanea. His family lived comfortably, but compared with the Gosaibis its assets were modest; years later, he presented himself in a corporate pamphlet as a “self-made man.” Sanea, who had received combat training from the Kuwaiti Air Force, was self-assured, and he arrived at his wedding in a red Rolls-Royce. A family member who attended the wedding told the Wall Street Journal that other guests considered this “a bit unseemly.”

Abdulaziz’s only son, Saud, lacked Sanea’s poise and command, and Abdulaziz treated Sanea like his own child. Their closeness caused resentment. Later, in a deposition, one of Sanea’s in-laws contended that Sanea “was not liked” by some of the Gosaibis; Sanea, in a court filing, acknowledged the friction and recalled that, during a dispute over office space, a Gosaibi relative had once “put a gun to my head.” (No one in the Gosaibi family agreed to be interviewed for this article.)

In 1981, Abdulaziz asked Sanea to run the Money Exchange—a business, based in Khobar, that gave expatriate workers a convenient way to send wages home, and offered a few basic financial services. The Money Exchange also functioned as an in-house bank for the Gosaibi family, whose members could withdraw funds to cover personal expenses and to support other AHAB enterprises. Sanea was determined to expand the Money Exchange, and an ad was placed in the Financial Times promoting its capacity to provide “a wide range of financial services.” Over the next two decades, the business grew significantly. Sanea was a controlling boss—he liked to be called Sheikh Maan—and he strictly supervised communication, especially when it concerned the Gosaibis; in 2004, he issued a memo declaring that “all mail and or correspondence addressed to Uncle Suleiman or Saud al-Gosaibi should be forwarded to my office for my review first.”

Sanea became increasingly rich, and invested some of his money in large projects. In Khobar, he built a private hospital and developed a housing compound for expatriates that contained an indoor ice-skating rink. He also spent lavishly on himself, maintaining a seaside mansion and amassing a collection of exotic animals, including lion cubs and flamingos. In a court filing, he estimated the value of his “safari animals” to be between thirteen and twenty-three million dollars. A few years ago, one of Sanea’s lawyers told a judge in the U.K. that his client spent approximately eight hundred thousand dollars a month on electrical, telephone, gas, water, and satellite bills, noting, “He has a zoo, my lord.” At one point, Sanea bought an Airbus A320, a commercial jetliner that costs ninety million dollars.

“I enjoy role-playing, but do we really need the dramaturge?”

Sanea’s financial success rested, in no small part, on his in-laws’ excellent reputation. In the Gulf, credit bureaus were considered an invasion of privacy; they have only recently come into existence there. Traditionally, bankers borrowed and lent money based on prestige, a practice known as name-lending. Bijan Kian, a former chairman of the U.S. Export-Import Bank’s audit committee, told me that the Gosaibis were “among the cleanest, best names in Saudi Arabia.” Anthony Harris, a former British Ambassador to the United Arab Emirates, who now works in financial services in Dubai, said that Sanea was known in the Gulf as “the king of leverage.” He could persuade “banks to lend twice, on the same collateral, all because of the Gosaibi name.”

By the nineties, Sanea’s borrowing lines at the Money Exchange had been stretched “to capacity,” according to Peter Shepherd, its former treasurer. Some of the Gosaibis wanted to shut down the business, but Shepherd—whose job required him to monitor the inflow and outflow of cash—told me that Sanea continued borrowing money aggressively for the Money Exchange, some of which he passed on as loans to his private businesses. By this time, the Gosaibi brothers were getting old, and Shepherd said that Saud, Abdulaziz’s son, “didn’t have the character to stand up” to Sanea. (Memos corroborate this dynamic. In 2006, Saud wrote to Sanea after noticing an expansion of the Money Exchange’s credit lines, and gingerly discouraged him from keeping the extra funds: “If the intent is not to use the increased facility and keep it as stand by, would like to suggest to allocate the increase to Algosaibi head office.”)

Around this time, Glenn Stewart began advising Sanea on various short-term finance mechanisms, including transactions that were compatible with Sharia law. Stewart was cultivating an expertise in Islamic finance. Khalid Janahi, a Bahraini banker living in Switzerland, said that Stewart’s “knowledge was much more advanced than a lot of Muslim Islamic bankers’ knowledge.” In 1997, Stewart helped create one of the first publicly traded Sharia-compliant mutual funds that was licensed for Western markets. According to the New Straits Times, a newspaper in Malaysia, where Islamic banking was becoming prevalent, the mutual fund was a “pioneering” effort. For a while, Shepherd said, Sharia-compliant banking became Sanea’s “top dog.” Stewart relished having gained the trust of Sanea, whom he considered remarkably industrious: “The guy worked from the time he got up in the morning until he went to bed at night, seven days a week. He burned people out. I work pretty damn hard, and I could hardly keep up with him.”

In January, 2001, Stewart proposed opening a bank in Bahrain. Although the Money Exchange often operated like a bank, it did not have the legal authority to perform some key transactions, such as issuing letters of credit. Moreover, as Stewart wrote in a memo to Sanea, establishing the new business in Bahrain would “increase the level of comfort that international banks would have in dealing with us.” (In the 2001 Economic Freedom index, published annually by the Wall Street Journal and the Heritage Foundation, Bahrain ranked eleventh—just below Switzerland.) Stewart added, “The advantage of this is that a number of banks we deal with could raise their limits to us substantially, as they would be lending to a bank and not a corporation.” Sanea replied, in a memo, “Please proceed to apply for a license.”

After the collapse of T.I.B.C., Adam Ereli, a former U.S. Ambassador to Bahrain, was briefed by Bahraini officials and by representatives from credit-rating agencies. In these conversations, he told me, he heard many “charges and counter-charges” about “forgeries on financial statements” and “financial arrangements that weren’t approved by the board.” He went on, “These were all allegations. But what wasn’t alleged was that about ten billion dollars disappeared. That doesn’t happen because of some bad investments.”

On May 22, 2003, the International Banking Corporation opened for business on the tenth floor of a Manama office tower. Sanea, based in Khobar, assumed the title of managing director. Stewart became the C.E.O., and spent much of his time travelling, meeting with representatives from other banks, and presenting T.I.B.C. as a financial institution fully backed by the Gosaibi family. Stewart announced that one of T.I.B.C.’s focusses would be lending to small- and medium-sized businesses in Saudi Arabia, albeit indirectly, by relaying funds from Bahrain to the Money Exchange, which would then disburse the loans to customers in Saudi Arabia. This was a byzantine arrangement. Why wouldn’t T.I.B.C. disburse the loans on its own? Stewart told me that Sanea wanted the funds to pass first through the Money Exchange, where he had full control.

Stewart deployed his Arabic skills and cultural knowledge at every opportunity. He sometimes started meetings by reciting a speech given by al-Hajjaj bin Yusuf, a governor of Iraq at the turn of the eighth century. “It’s the most famous political speech in Arab history,” he told me. “It’s like if you had an Arab who could quote the Gettysburg Address. It showed off my Arabic and it showed off my erudition. It would impress the hell out of them.”

By 2008, T.I.B.C. had the third-highest capital-to-risk ratio among Arab banks. Standard & Poor’s had praised its rapid growth. Much of the bank’s strength stemmed from its roster of loan customers in Saudi Arabia. From 2004 to 2009, T.I.B.C. loaned $6.3 billion to more than a hundred customers there. Some loans were as large as sixty-seven million dollars, and many customers renewed their loans multiple times. According to bank records, T.I.B.C. was lending seven and a half million dollars to a textile merchant, twelve million to a man who traded in “décor items,” thirty-five million to support an auto-parts dealer, and eighteen million to a seller of “toys” and “musical equipment.”

These loans were not real. Mark Hayley, a former general manager of the Money Exchange, later declared, in a statement submitted to courts in the U.K., “The entire arrangement was a device to transfer money from T.I.B.C. to the Money Exchange, which would then become funding for use by Mr. Al-Sanea” and his personal company, the Saad Group. Hayley portrayed the loan operation to me in military terms: Sanea acted the role of field marshal, with Stewart as his “main general.”

It’s not entirely clear how T.I.B.C. assembled a roster of fake loans, but clues have emerged. In February, 2010, the Bahraini government commissioned Kroll, the corporate-investigation firm, to conduct a forensic analysis of the collapse of T.I.B.C.; the investigation was paid for by the Gosaibis. Kroll concluded that Sanea had “provided Glenn Stewart with the names and relevant documents pertaining to the Saudi entities which served as loan customers.” In January, 2005, Stewart wrote to Sanea, “As per our discussion, could you please forward to us the financial statements of another ten companies?” That October, Stewart requested the corporate registrations for “two new companies in Saudi Arabia.” Some of these purported loan customers, Kroll reported, were “closely related” to Sanea, including family members and employees.

Sometimes, Kroll noted, the names of real businesses appeared in T.I.B.C.’s loan book—without the companies’ knowledge. In several instances, their financial documents had been baldly inflated: the corporate registration of one Saudi construction-and-paint company, whose authentic documents listed the equivalent, in Saudi riyals, of twenty-six hundred dollars in capital, was amended to reflect $2.6 million in capital. More capital meant bigger loans. Because the businesses didn’t know about the loan accounts that had been created in their names, the funds remained on deposit at the Money Exchange, the institution from which Sanea borrowed heavily. A former ahab manager told Kroll that this process was tantamount to identity theft.

In 2004, Sanea established another bank in Bahrain, and that December he stepped down as managing director of T.I.B.C.: the central bank of Bahrain frowned upon individuals holding senior positions at multiple banks. In October, 2005, he also left T.I.B.C.’s board of directors. Sanea no longer had any official role at the bank, but he remained engaged in its affairs. Around this time, an “executive committee” was established at T.I.B.C.; Sanea participated in decision-making and issued directives through the committee—even though it officially comprised only Stewart, Saud al-Gosaibi, and Suleiman al-Gosaibi. Investigators obtained memos in which Sanea’s handwriting appears under the signature “the ‘executive committee.’ ” Three former colleagues separately told me that correspondence with the executive committee never involved any Gosaibis. (In a court filing, Sanea has said that he did “continue to give my advice after my resignation, particularly on borrowings by T.I.B.C.,” but “at the request of Suleiman al-Gosaibi.”)

The former AHAB manager, who worked closely with both Sanea and Stewart, told me that the two men oversaw T.I.B.C.’s lending operation together, with Stewart focussing on “the mechanics of getting things done.” Stewart made sure that the bank’s records appeared meticulous. In a 2003 memo, he explained to Sanea that loan confirmations from the Money Exchange’s back office would help “create the necessary paper trail” for assuring auditors or regulators. In 2005, external auditors informed Stewart that the same fax number was being used to send them audit confirmations for T.I.B.C. loan customers. In a subsequent memo that Stewart sent to Sanea, he wrote, “Each customer should have its own FedEx account. Further, each customer should have its own fax line.”

T.I.B.C.’s annual reports noted that Gosaibi family members owned the bank and sat on its board. But Peter Belmont, a non-executive board member at T.I.B.C., never saw any Gosaibis at the board meetings he attended. According to Belmont, who is now retired in Florida, Stewart and another T.I.B.C. employee—both of whom claimed to possess proxies—attended in the Gosaibis’ stead. Belmont found the bank’s atmosphere troublingly secretive. After he expressed concern about the family’s absence to Stewart and his colleagues, Alistair MacLeod, T.I.B.C.’s chief operating officer at the time, wrote to Stewart, “I think you will have to be clear with Mr. Belmont. Fall into line or resign!” Belmont did not press the matter further, and left the board the next year. After T.I.B.C. collapsed, he was shown board minutes that, he said, falsely indicated the presence of Gosaibi family members at meetings he had attended.

In 2007, Sanea bought a 3.1-per-cent share in H.S.B.C., the British bank. The position, valued at more than six billion dollars, made him the second-largest shareholder. His spokesman declared that Sanea was now “a substantial player” in world financial markets. That year, Forbes estimated Sanea’s wealth at seven and a half billion dollars, listing him as the ninety-seventh-richest man in the world. The most affluent Gosaibi, Suleiman, was ranked seven hundred and seventeenth. Sanea continued spending liberally. He hired a “food and beverage manager” to look after his wine cellars. In October, 2009, a wine retailer assessed one of Sanea’s wine collections and deemed it worth $1.1 million.

Stewart, who declined to discuss how he was compensated during his years in Bahrain, didn’t become rich enough to make the Forbes list, but he profited tremendously. In 2007, he bought an eight-million-dollar residence in Malibu. He already owned a four-bedroom house in Pacific Palisades—a real-estate listing later described its décor as “Mykonos meets the Mexican Riviera”—as well as apartments in London, Oxford, and Leeds. Records show that he held most of the English properties through financial instruments called special-purpose vehicles, which he had incorporated in offshore tax havens in Bermuda, Cyprus, and the British Virgin Islands. S.P.V.s are commonly used to limit tax exposure and liability. Records obtained for one of Stewart’s S.P.V.s, registered on the Caribbean island of Nevis, show that, as of October, 2006, it held more than twenty-four million dollars in assets. Stewart said of the S.P.V.s, “My lawyers recommended them.” He added, “It’s also a tax-efficient way to invest in U.K. real estate.”

Having made a fortune, Stewart focussed anew on the arts. He produced and wrote the book for a musical, “The City Club,” at the 2004 Edinburgh Fringe Festival. The story centered on the “privileged scion of a spectacularly corrupt family,” according to publicity materials. At the festival, he met some German film producers, and they decided to make movies together, ultimately arranging financing for a dozen films, including “The Mysteries of Pittsburgh,” “Lesbian Vampire Killers,” and “The Messenger.” Stewart would not specify to me how much money he put into these projects, but Michael London, who co-produced “The Mysteries of Pittsburgh,” told me that Stewart and the Germans contributed roughly half of the film’s five-million-dollar budget. Stewart said, “The films as a package lost money, but a few of the individuals made money. I personally did not.”

In the autumn of 2008, the Wall Street financial crisis began disrupting global markets, and Stewart struggled to hold T.I.B.C. together. The fall of Lehman Brothers, in September, “created a complete panic and started melting the system,” he said. Banks called in their loans to T.I.B.C. Since it would be impossible for Stewart to call in T.I.B.C.’s fake loans, he tried to maintain liquidity by deepening the bank’s reliance on short-term financial remedies—most notably, the split-value foreign-exchange deal. Such transactions take advantage of the fact that banks exchanging currency often operate in different time zones and on different working calendars. If, say, a bank in New York paid T.I.B.C. a hundred dollars on a Thursday afternoon, in exchange for the equivalent in Saudi riyals, T.I.B.C. could not make a return payment until Sunday, because banks in Bahrain are closed on Friday and Saturday. But on Sunday the banks in New York are closed, so such a deal could not be settled until Monday. Meanwhile, T.I.B.C. would acquire an extra hundred dollars in liquidity for the weekend. Transactions like these staved off immediate disaster, but, because of accruing interest, they piled up even more debt.

By the spring of 2009, T.I.B.C. was facing potential default. Stewart flew to Dubai in April and pleaded his case to one of T.I.B.C.’s major creditors, Mashreq Bank, which is based in the Emirates. He asked John Iossifidis, a top Mashreq executive, to temporarily extend its lending limits. According to an affidavit later filed by Iossifidis, in New York, Stewart “emphasized that he spoke for both T.I.B.C. and AHAB,” and proposed a split-value foreign-exchange deal in which AHAB would receive a hundred and fifty million dollars. As collateral, Stewart pledged two hundred million dollars in AHAB-owned corporate shares.

The next day, Mashreq advanced a hundred and fifty million dollars to AHAB. Stewart promised to return the money, in Saudi riyals, a week later. The riyals came due on May 5th, but instead of paying back the money Stewart asked for seventy-five million dollars more, this time expressly for T.I.B.C. Mashreq agreed. The next day, Stewart met again with Iossifidis and assured him that the Gosaibis would repay the debt in full. The Gosaibis, who had learned of the bank’s endangered status, echoed these assurances to Mashreq.

On May 11th, however, T.I.B.C. defaulted on the deal, and AHAB, as the owner of the bank, now owed Mashreq a quarter of a billion dollars. T.I.B.C. was also indebted to sixty-two other banks, and couldn’t afford to pay them back, either.

The same day that Stewart met with Iossifidis, Tariq Ali, an American-educated banker with substantial experience in debt restructuring, met in Khobar with Jamal al-Muzein, a lawyer representing Sanea. Muzein, who had initiated the meeting, told Ali that the Money Exchange had defaulted on sizable foreign-exchange deals and that the Gosaibis wanted him to help quickly set things right. Muzein estimated the debt to be somewhere between a billion and two and a half billion dollars. After a preliminary review of the documentation, Ali determined that the debt was likely much greater—between five and six billion. He asked Muzein to arrange for him to meet with Saud al-Gosaibi, Sanea’s brother-in-law.

The next day, Muzein drove Ali to see Saud. Along the way, Muzein urged Ali not to mention his six-billion-dollar estimate to Saud, who was “in deep shock” about the crisis; hearing such a figure “might be too much for him.” The request made Ali uneasy, but he complied and told Saud simply that the Gosaibis owed a lot of money because of unchecked name-lending. Ali told me that Saud appeared not to realize that the family owed billions: “You could see it in his body language—he was aware that something had happened but didn’t know exactly what.”

Ali then went to Bahrain to meet with Stewart, whom he found “brash and dismissive.” Stewart told him that he had recently been called in to discuss T.I.B.C.’s default with regulators from the central bank of Bahrain, and that he had proposed resolving the matter by merging T.I.B.C. and the Money Exchange. Ali asked Stewart who had given him the authority to negotiate with the central bank on behalf of the Gosaibis. Stewart replied that he had mentioned it to T.I.B.C.’s executive committee. Ali asked Stewart who sat on the executive committee. “I can’t tell you,” Stewart said. (Stewart has since claimed that he was not being secretive, only careful, because he didn’t know whose interests Ali was representing.)

“Full disclosure—I really need this hug.”

Though a full picture of T.I.B.C.’s business activities eluded Ali, he came away feeling that the bank had taken advantage of the Gosaibis’ reputation. “They were a pristine name,” Ali told me, adding, “That was what was exploited.” A key way that Stewart facilitated the operation, Ali claimed, was by helping T.I.B.C. to maintain liquidity when its loan book was not generating money. Stewart made particular use of his expertise in murabaha transactions. They involve inflating the cost of an item in order to sidestep variable interest rates, which are forbidden by Sharia law. In the Gulf, Ali said, it was widely known that the Gosaibis needed aluminum in connection with their Pepsi-canning operation, and T.I.B.C. repeatedly “did these Islamic-banking transactions where you buy and sell aluminum.” Ali added, “They really needed liquidity.”

Ali was startled by the T.I.B.C. loan book. “Never in my life, anywhere in the world, have I seen a loan portfolio like that,” he said. As far as Ali could tell from the bank’s documentation, only one loan—to a relative of Sanea’s in Kuwait—had not been repaid. Otherwise, T.I.B.C. appeared to have a perfect record: “No losses, no watch list, no past dues, no delinquencies.” Ali suggested to Stewart that a loan book this immaculate could be sold at a premium price. According to Ali, Stewart said, “I don’t think you should count on the loan book.”

I asked Ali if he had identified any legitimate business activity at T.I.B.C. “None,” he said. “All of it was liquidity generated for the benefit of the principal”—Sanea. “And Glenn was an instrument of that.” Ali could not imagine how a top executive at T.I.B.C. could have remained unaware of the loan book’s vaporous nature. He said of Stewart, “If he didn’t know, then he’s stupid. Or there was some other reason why he chose not to question or investigate. I mean, it took us a total of a week.”

After confronting Stewart, Ali drove across the causeway linking Bahrain to Saudi Arabia and spoke again with Saud al-Gosaibi. Ali had taken a printout of the customer and business names from T.I.B.C.’s loan-book files, and he asked Saud if he recognized any of them. According to a statement that Ali later filed in a London court, Saud identified several names as belonging to “relatives and friends” of Sanea’s. But why had Sanea’s driver needed a twenty-five-million-dollar loan? What was the son of Sanea’s public-affairs manager doing with twenty million dollars’ worth of loans for agricultural equipment? (The son, who currently lives in Kalamazoo, Michigan, confirmed to me that his father works for Sanea, but he refused to comment further about how his name ended up on T.I.B.C.’s loan-customer list, saying, “I don’t know anything about this.”)

Ali eventually told Saud that his family might owe as much as eight billion dollars. According to Ali, Saud told him, “I don’t know where this money went,” and then said of Sanea, “He would know.”

When Ali informed Muzein, the lawyer representing Sanea, what he had come to believe about mismanagement at T.I.B.C, he was brushed off. Ali went back to Saud, who told him, “Deal with my office now.”

Saud began hiring lawyers and brought in outside consultants. In July, 2009, he retained Eric Lewis, an attorney based in Washington, D.C., to defend the Gosaibi family against lawsuits being filed by irate banks, and to devise a legal strategy to recover assets from Sanea. Lewis, who has written about legal affairs for this magazine’s Web site, knew the terrain well. In the nineteen-nineties, he had represented creditors who lost money after the collapse of the Bank of Credit and Commerce International, which, among other misdeeds, had laundered money for the Panamanian dictator Manuel Noriega. More recently, he had worked with international liquidators to recover assets from Bernard Madoff’s gigantic financial fraud, which had amounted to a loss of seventeen billion dollars. Lewis noted to me that the losses associated with T.I.B.C.’s collapse were even bigger: together, the Gosaibis and Sanea owed twenty-two billion dollars.

Lewis began preparing litigation, and he eventually filed a complaint in California, because Stewart owned property there. (Stewart’s wife, along with their younger son, had moved into the Pacific Palisades house shortly after T.I.B.C. failed.) In the complaint, Lewis called Stewart a “primary co-conspirator and accomplice of al-Sanea” in perpetrating a multibillion-dollar “Ponzi scheme.” (Sanea denies that any Ponzi scheme took place.) Stewart, Lewis went on, had “devised and agreed to participate in an unlawful scheme whereby T.I.B.C. purported to engage in lending to phony ‘loan customers’ as a means to filter funds to the Money Exchange where they were channeled into the operational costs of the fraud and/or into al-Sanea’s pockets.” The complaint also alleged that Stewart had “misappropriated” a hundred million dollars for himself.

Lewis collaborated with a forensic-accounting team from Deloitte, which had been hired by the Gosaibis to examine the records at the Money Exchange. Unravelling a conspiracy often takes more than finding memos or scouring a hard drive. It can require an insider to decode the jottings in a margin or the oblique references in an e-mail. In June, 2009, Mark Hayley, the Money Exchange’s former general manager, was one of several employees who decided to coöperate with the investigation. According to the Deloitte team, Hayley described how Stewart borrowed money at T.I.B.C. using the loan book to attract funding, and how most of the money flowed into Sanea’s accounts. Stewart, Hayley said, had kept the operation running at Sanea’s behest. William Asante, the project manager of Deloitte’s team, told me that “Glenn definitely played a key role.” (Stewart said, “I’m shocked at how shabby a job Deloitte has done on all of this. They just don’t understand it.” In legal filings, Sanea has called Deloitte’s investigation “defective” and “its reporting misleading.”)

To vet T.I.B.C.’s loan book, Asante printed out the addresses of several supposed customers and drove around Khobar. He went to the alleged address of a Saudi contractor who traded in agricultural goods and had purportedly received a nineteen-million-dollar loan; Asante discovered a low-income housing project. At the supposed address of a trader in “cooked and uncooked foodstuffs” who had taken out an eighteen-million-dollar loan, Asante found a bariatric surgeon named Sultan al-Temyatt. I recently spoke with Temyatt. From August, 2004, through August, 2009, he worked at Sanea’s hospital in Khobar. He denied ever applying for such a loan, or receiving such a loan, adding that he had never heard of T.I.B.C. before its collapse. He said of the loan applications showing his name and signature, “I never signed them. . . . I had no idea at all about these documents.” When I asked him how his personal information might have been obtained, he said that he didn’t know. He noted, “The hospital, they have all the information of the staff.” (No evidence has emerged to suggest that any hospital personnel were involved in releasing such data, and the hospital insists that it did not do so.)

Another former hospital employee whose name ended up in the loan book is a cousin of Sanea’s named Maan al-Dughaiter. He is a small-business owner, and in 2006 he supposedly took out a twelve-million-dollar loan. “This is all forgery,” Dughaiter said. “I didn’t get anything. You can come and see how I live. If I had twelve million dollars, you will see me right now driving a Ferrari in Beverly Hills!”

Recently, I began calling, at random, other people whose names appeared in T.I.B.C.’s loan book, and I spoke to five of them. According to the bank’s records, these individuals had collectively borrowed more than a hundred and ten million dollars. They all told me that they had never sought or received any loan from T.I.B.C. Three of them had worked at the Khobar hospital. One man worriedly asked me if this meant that authorities would attempt to collect the imaginary debt.

Deloitte’s investigation also turned up seeming irregularities in documents that featured signatures from Saud’s uncle Suleiman al-Gosaibi. Suleiman died in February, 2009, after an illness. As the Wall Street Journal reported, one AHAB document suggested that he had approved a transaction on the same day that, according to his medical records, he was unconscious in a Zurich hospital. In 2012, the Forensic Institute of Zurich examined two of Suleiman al-Gosaibi’s signatures on a separate document. It determined that a “slow and unspontaneous” hand had produced the signatures, and concluded “with a probability bordering on certainty” that they were forgeries.

Two months after T.I.B.C. defaulted, Stewart booked a flight to London. As he was passing through immigration, an official prohibited him from boarding. “You have a problem with the Ministry of Justice,” the official told him. Only then did Stewart learn that Bahrain’s top prosecutor, Nawaf Hamza, had imposed a travel ban on him, at the behest of the central bank of Bahrain, in connection with an ongoing investigation into T.I.B.C. conducted by Ernst & Young.

The Ernst & Young team members spent several weeks at T.I.B.C.’s offices. According to their report, they encountered “significant stalling” from the management, but some employees eventually began coöperating. T.I.B.C.’s credit-risk officer, Irene Evangelista, told the investigators that the bank’s “credit committee”—ostensibly formed in 2008, to review and approve all lending transactions—had “not had a single meeting.” (The bank’s annual report suggested that the committee had met three times that year.) She added that “all the minutes” of the committee “are fake and have been prepared by me.” I recently spoke with Evangelista, who now lives in the Philippines. She described her experience at T.I.B.C. as “traumatic,” but refused to elaborate, saying, “If you have a signed and sworn statement from me taken by Ernst & Young, you have everything you need.”

Another credit officer, Brenda Jonas, also provided a signed statement to Ernst & Young investigators, describing the genesis of the loan-application process. She said that Afzal Abaali, Stewart’s chief risk officer, initiated loans by supplying her with three documents: a corporate-registration number, a passport copy, and a photo-I.D. copy that “he allegedly receives from Saudi Arabia.” All other application documents, Jonas said, were “drafted and completed by me.” At one point, she noted, she was told to “draft referral and recommendation letters for all the customers since 2003.” She was not comfortable backdating the letters, but she was “obliged to do so.” After the interview, Jonas arranged to meet with an Ernst & Young investigator in T.I.B.C.’s parking garage, where she handed over a bag filled with loan documents that she said she had been instructed to remove from the bank’s premises. (Jonas, who is from the Philippines, could not be reached for comment. Abaali denies initiating the loans, calling Jonas’s account “baseless.”)

Ernst & Young investigators interviewed Stewart at length. He told them that he did not think Sanea had “stolen any money from the al-Gosaibis,” but said that Sanea had “misused his position of trust” within the family “to borrow money from institutions around the world to finance the expansion” of his own businesses. Stewart distanced himself from any wrongdoing. Indeed, he later told me that his statements to Ernst & Young about Sanea misusing his position of trust had been given under duress.

At one point, an Ernst & Young investigator told Stewart that he found T.I.B.C.’s lending practices “exceptionally strange.” Stewart replied, “If I had known that these loans were fictitious or irregular, I would not have signed any of the loan approvals, and I may well have resigned.” Besides, he added, “What do I know about what really goes on in the Kingdom, and the way things actually work there?” Stewart, once so determined to show off his mastery of Arab culture, was now presenting himself as a functionary. He told me recently, “I considered myself to be a glorified servant and the majordomo, which is to say the chief house slave.”

In July, 2009, Ernst & Young submitted a report to the central bank of Bahrain, concluding that Stewart and a few of his top managers “must reasonably have known that the loans created for the transfer of the excess capital to the Exchange were irregular.”

The Gosaibis filed a criminal complaint against Sanea and Stewart, and in 2010 Nawaf Hamza, the Bahraini prosecutor, hired Kroll, the corporate-investigation firm, to delve into the matter. As Kroll staffers imaged Stewart’s computer and searched through boxes of documents, they discovered oddly similar grammatical errors in the audit reports for the bank’s numerous loan customers. In four sets of financial statements on file at T.I.B.C.—ostensibly prepared by four separate auditors for four separate businesses—four sentences began with the phrase “Monetary assets and liabilities Denominated in foreign currencies,” with each sentence featuring the anomalous uppercase “D.” In several reports, the word “equity” was repeatedly misspelled as “equty.” Kroll concluded that the audits were likely fakes. When Kroll reached one auditor who had allegedly vetted nineteen of T.I.B.C.’s customers, to which hundreds of millions of dollars had been loaned, the auditor said that T.I.B.C. had never been his client—and that his signature and stamp had been forged. In a detailed report, Kroll claimed that Stewart and Sanea had “set up and developed a portfolio of fake customer loans,” with Stewart acting as the “day-to-day manager of the loan book” and helping to prepare “false financial statements.”

Stewart, confined to Bahrain, spent his days golfing, swimming laps in the lagoon behind the Ritz-Carlton, and working on his memoirs. The first volume, “A Gentleman and a Player,” recounts the nearly five years he spent in England. It includes accounts of various romances. At one point, he observes, “Having sex in the back of a Morris Traveller parked by the Serpentine in Hyde Park is not the most comfortable thing in the world. But where there’s a will there’s a way.”

Stewart hired a lawyer and helped him draft an eighty-five-page complaint to the United Nations Human Rights Council, calling the travel ban against him “illegal,” and contending that Hamza’s investigation had been prompted solely by an “internal family dispute.” The travel ban had deprived Stewart of “his most basic human rights,” the complaint went on, with Stewart being treated “as a non-Middle-Eastern infidel whose life can be indefinitely trodden upon without regard to due process.” In the complaint, Stewart denied any involvement with “documenting, assessing, underwriting, or gathering information” for the loan book.

On January 25, 2010, eight months after T.I.B.C. collapsed, Hamza brought Stewart in for questioning. Stewart felt uncharacteristically nervous; that morning at breakfast, he swallowed two Dogmatil sedatives, hoping that they would relax him. The interrogation lasted two days. Stewart insisted on his innocence and said, “As far as I know, all the loan applications were correct.” Suleiman al-Gosaibi, he said, had given Sanea “legal authorization to manage financial affairs” at the Money Exchange. Ultimately, it was a “family dispute.” And Stewart argued that T.I.B.C.’s implosion was primarily “the result of Lehman’s collapse” in the fall of 2008.

Hamza’s interrogation of Stewart focussed on charges of “knowingly benefitting from a crime,” “deception,” and forgery. Hamza issued a “renewable” seven-day prison sentence, with bail set at approximately twenty-six thousand dollars. Stewart raised the money within a few hours and avoided jail time. But he was afraid. Speaking of Hamza, Stewart told me, “It was clear that the man knew absolutely nothing about banking or finance. He asked unsophisticated questions, and I knew that we were fucked. We were going to get railroaded by a kangaroo court.”

Stewart pleaded with the U.S. Embassy in Manama to pressure the Bahraini government into lifting the travel ban. His request was denied. A former American official there told me that Stewart’s claims against the Bahrainis struck him as “outlandish.”

Meanwhile, in California, Stewart’s wife contacted her congressman, Henry Waxman. Waxman’s office refused to extend assistance, however, referring to a letter from the U.S. Embassy in Bahrain that stated (incorrectly) that Stewart had been charged with money laundering and (correctly) that he was “not free to leave Bahrain.” Stewart, panicked, began looking for another way off the island. “I tried to work legally within the system, but there is no system,” he told me.

According to Stewart, he approached a former C.I.A. officer, who offered to smuggle him out of Bahrain. They agreed to terms, and late one night in May, 2010, Stewart says, he left his Manama apartment for the last time, carrying a backpack containing clothes, a phone, cash, and his passport. He told me that he met two Americans—one of them the former C.I.A. officer—in a dark, empty lot. They drove to a beach, then waded into the Gulf, where a thirty-four-foot cabin cruiser was idling offshore. He and the former C.I.A. officer climbed aboard, and were greeted by five men with “military experience.” Stewart then squeezed into a secret compartment, which was bolted shut. (He declined to provide the names of anyone on the boat who could corroborate his account.) The boat sped off, skirting the Saudi and Kuwaiti coasts, and two days later, Stewart said, they arrived at the Iraqi port of Umm Qasr. An Iraqi general there secured Stewart a visa. The next morning, Stewart flew from Basra to Amman, proceeded to London, and, a week later, arrived in Los Angeles.

In September, 2012, I visited Stewart’s office, in Santa Monica, five blocks from the beach and two floors above a Brazilian-jujitsu studio. He was sharing a loft space—brushed-concrete floors, exposed ductwork—with a movie-financing company. Stewart wore a gray polo shirt tucked into cream-colored slacks, and dark Top-Siders. He had gained weight in recent years, and, with his slightly pocked complexion, cinder-block jaw, and bulbous nose, he called to mind a retired Soviet bodybuilder.

He gave me a tour, pointing out Qashqai rugs from Iran and a framed concert poster from a 1970 Grand Funk Railroad show. “I have a wide-ranging, eclectic set of tastes,” he said. We paused before a pair of antique bookshelves. One contained the complete works of Shakespeare (“I’ve read almost all of them”), Conrad, and Charlotte Brontë. The other held facsimile first editions of American classics. Stewart pulled “From Here to Eternity” off the shelf and declared, “I rate this as the second-best work of American literature, after ‘Huckleberry Finn.’ ”

“Oh, sure, that could be us tomorrow, but it’s him today.”

Sitting at his desk, Stewart said that he was now pursuing literary projects. “I write reasonably well,” he said, despairing that most residents of Los Angeles were “semiliterate.” (He expressed similar condescension toward Arabs, describing them as “basically turbulent, ill-disciplined people.”) Stewart had recently completed a second volume of his memoirs, “An American Youth.” More volumes were forthcoming. “I’m consciously modelling this on Boswell,” he said.

The U.S. does not have an extradition treaty with Bahrain, so AHAB’s charges did not follow Stewart home. But, about nine months after Stewart returned to America, Eric Lewis, the attorney representing the Gosaibis, filed the lawsuit against him in California, alleging more than nine billion dollars in damages—the amount that Sanea, with Stewart’s assistance, was said to have misappropriated from AHAB.

During our conversation, Stewart characterized the allegations against him as “slanderous shit.” The Gosaibis “knew everything” Sanea was doing, he claimed—and, even if they didn’t, the responsibility was theirs, since they had given Sanea power of attorney: “They defaulted on their loans, and then they adopted this perjurious strategy to blame the whole thing on Maan.” Stewart called Lewis a “paid whore” of the Gosaibis. “To put it coarsely, what the al-Gosaibis and Eric Lewis have done is the equivalent of going to the police and saying, ‘I saw Glenn Stewart sodomizing a ten-year-old boy in the lavatory,’ ” he told me. “It’s going to cost me a lot of money, a lot of pain, I will be investigated, and it’s going to take some time before it’s proven that they’re liars and that they’ve done this solely for vindictive reasons.”

The Gosaibis’ feud with Sanea has been going on for nearly six years. Litigation has taken place in Saudi Arabia, the Emirates, Bahrain, Switzerland, the United Kingdom, the United States, and other jurisdictions. In July, 2009, the Gosaibis sued Sanea in the Cayman Islands, the site of some offshore companies established by Sanea. A judge there imposed a two-and-a-half-billion-dollar freeze order against Sanea’s assets. In court filings, Sanea has depicted the Gosaibis’ campaign to “apply illegitimate pressure on me to pay ahab’s legitimate debts” as “indefensible and abusive,” and has said, “I am absolutely sure that I have done nothing wrong”; the loan-book allegations, he has said, are “without any justification,” and he has “categorically” denied participating in any forgery. Confirming that fraud has taken place is not the same as confirming who orchestrated it, and no court has declared Sanea the author of T.I.B.C.’s fictional loans. (Sanea refused numerous requests to comment for this article, and his attorneys in London declined repeatedly to be interviewed about the authenticity of the loan book.)

Dozens of creditor banks also filed suits against AHAB. The banks argued that the Gosaibis, as the owners of T.I.B.C. and the Money Exchange, were obliged to cover their debts. In 2011, five banks collectively went to trial against the Gosaibis in the U.K. over ahab debt. The Gosaibis denied any responsibility, stating that they did not know about the extent of Sanea’s activities—or even of the existence of T.I.B.C. In court, however, documents emerged that indicated at least some family awareness of his rampant borrowing—including letters from Saud al-Gosaibi to Sanea, and ahab audit reports making references to T.I.B.C. The Gosaibis were either not telling the truth or exaggerating their ignorance of T.I.B.C.’s activities. (Billions of dollars generated by the loan book flowed through a Bank of America account belonging to the Gosaibis.)

The Gosaibis, seeing their line of defense collapse, withdrew from the case, and the judge ordered them to pay two hundred and fifty million dollars in liabilities. In several dozen other court proceedings, judges have rejected the Gosaibis’ claim that they are not liable for the debts because their in-law stole from them. Although a court in Bahrain has supported the Gosaibis’ contention that T.I.B.C. documents contained forgeries of Suleiman’s signatures, other courts have not. Sanea’s lawyers say that “ahab’s allegations have been given no credence by any of at least sixty-three courts or tribunals worldwide.”

Stewart cited such proceedings as proof that he had committed no crime. Yet even in the U.K. case, where the bank plaintiffs and the Gosaibis differed on matters of knowledge and responsibility, no one defended the integrity of the loans that had been made. The Money Exchange’s audit reports, a lawyer for one of the five banks said, “weren’t worth the paper they were written on.”

Last spring, Trowers & Hamlins, a law firm assigned by the Bahraini government to take administrative control of T.I.B.C. and recover lost assets, filed a $1.9-billion lawsuit against ahab. In a press release, Abdullah Mutawi, a partner at the firm, announced that a recent court order had forced AHAB to share its banking records, permitting a “precise mapping of the flow of funds.” It turned out that AHAB was T.I.B.C.’s biggest debtor, and that billions of dollars had moved from T.I.B.C. into a Gosaibi-owned account—making, Mutawi argued, the family legally responsible for the bank’s debt. Nevertheless, Mutawi declared that a “painstaking forensic analysis” of T.I.B.C. had left no doubt that the loan book had been “created and operated” by “fraudulent means.”

After twenty-seven years in the Gulf, Stewart was ready to settle back into American life. He tried to develop television projects, including a reality show about Mississippi riverboat pilots, and an adaptation of a Swedish game show. He earned credit as an executive producer on “Nothing Left to Fear,” a film whose main backer was Slash, the former guitarist of Guns N’ Roses. (According to the Web site Box Office Mojo, the film grossed less than eight thousand dollars domestically.) Stewart became a partner in a natural-gas exploration venture in Pennsylvania, and bought a hundred and ten single-family homes in Detroit, which are being renovated for resale. “I am very bullish on Detroit,” he told me.

He produced a new version of “The City Club,” his musical, at the Minetta Lane Theatre, in Greenwich Village. A crew member told me that Stewart “made it clear he was pumping money into the show.” But the director accused Stewart of micromanaging rehearsals, and they fell out. The show closed after two weeks. A reviewer from Backstage.com applauded the show’s pleasant music, even if the songs were “draped around an unconvincing noir potboiler from book writer Glenn M. Stewart.”

Shortly after Stewart returned to California, he learned that Bahraini officials were planning to attend a reception, hosted by the Bahrain Association of Banks, at the Mandarin Oriental, in Washington, D.C. On the night of the event, in October, 2010, Stewart entered the ballroom at the Mandarin “bold as brass, like I belonged there.” He took a drink from a passing tray and made his way toward Rasheed Mohammad Al Maraj, the governor of Bahrain’s central bank. Robert Ainey, the head of the banking association, recognized Stewart, hurried to check the guest list, and confirmed that Stewart was crashing the party.

Stewart approached Maraj and shook his hand. “We should talk,” he said. Maraj looked at him scornfully and replied, “I don’t want to talk to you.”

The confrontation, though brief, satisfied Stewart, and he left proudly. “I wanted to assert my rights as a free man, not one of their semi-slaves,” he told me. “I had absolutely no rights in Bahrain!” When the bankers’ association hosted its reception in Washington the next year, Ainey distributed photographs of Stewart to the hotel’s security guards and authorized them to block him from entering.

Meanwhile, preparations for the California case against Stewart moved ahead. In 2013, both sides began sharing discovery materials and preparing to depose witnesses. In a counter-complaint, Stewart’s lawyers said that AHAB “will certainly not be able to prove that Stewart acted without authority.” They denied that Stewart “directed or supervised any ‘scheme,’ ” and further argued that Stewart’s “belief in Al Sanea’s authority was reasonable and justified,” because “multiple reliable sources” had assured him that Sanea had power of attorney. The defense called two women from the Gosaibi family for deposition. Stewart figured that the women would have little knowledge of AHAB’s operations but assumed that the Gosaibis would be disinclined to submit them to the indignity of a legal proceeding. “This was my idea—because I have the cultural context,” Stewart told me.

“Mom?”

In April, 2013, the California judge declared that there was a “reasonable possibility” that Stewart “will prevail,” citing a judge in the Cayman proceedings, who said that Sanea’s “substantial borrowing . . . may well have been undertaken with either the express or implied knowledge and authority of the ahab Partners.” The Gosaibis dropped their case. Perhaps to save face, they agreed to walk away under one condition: that Stewart consent to a lengthy interview about Sanea’s role. The interview took place the next month, and although neither side would discuss details on the record, Stewart told me that it was not especially probing. “We feel vindicated by this settlement,” Haig Kalbian, a lawyer representing Stewart, was quoted as saying in The National, an Abu Dhabi newspaper. “This case should never have been brought against Glenn Stewart. The fact that the other side has walked away from the case speaks volumes.”

Lewis told me that the Gosaibis had decided to quit their pursuit of Stewart in order to focus on reclaiming billions from Sanea, and said, “A principal purpose of the lawsuit against Stewart was to obtain information against Maan al-Sanea.” Lewis’s legal campaign has encountered setbacks on other fronts: in April, 2014, the public prosecutor of Bahrain dismissed AHAB’s complaint against Sanea, because the Gosaibis had failed to produce purported loan-book victims in court. And no judge has ratified Lewis’s contention that T.I.B.C. was a Ponzi scheme, although no court has yet ruled on the integrity of the loan book. The Gosaibis are currently pursuing two criminal lawsuits in Saudi Arabia, where Sanea continues to live in his mansion in Khobar. And last April the family won two procedural appeals against Sanea in the Cayman Islands, clearing the way for a trial, in 2016, that probes the loan book’s authenticity. Stewart could be called to testify.

Six years after T.I.B.C.’s collapse, the Gosaibis, Sanea, and Bahrain’s banking sector are still dealing with its ramifications. The Gosaibis were forced to sell their Pepsi facility, and the Saudi government has banned them from travelling abroad. (Sanea is also forbidden to leave the Kingdom.) Dubai has decisively surpassed Manama as the preferred financial destination in the Gulf. Moreover, as Stewart put it, “We destroyed name-lending in the region.” Tariq Ali, the banker, said, “Now banks don’t want to do name-lending—and it’s because of this.” He went on, “Name-lending should have stopped on its own, but this was the awakening.”

Stewart, apart from a couple of million dollars spent on legal fees, has more or less left the scandal behind. Recently, the public prosecutor in Bahrain dropped the charges against him. Other legal proceedings involving Stewart are continuing in Bahrain, but, without the threat of extradition, he is free to enjoy his riches. Still, he points out that he will never have the chance to exonerate himself in court—to explain why all the testimony suggesting that he had perpetrated fraud was misinformed, why all the documents that had seemed so damning had been misinterpreted, and why Kroll’s blunt allegations about “a portfolio of fake loan customers” were misplaced.

Several months before Stewart made the deal with the Gosaibis, he gave me his version of the truth. We met for lunch at an English pub in Philadelphia; he was in town for the Army-Navy football game. We sat upstairs, in a room whose hunter-green wallpaper featured rustic portraits of foxes being pursued by hounds.

All along, Stewart had insisted that the loan documents he reviewed were clean. He had told me, “Anything I signed off on, there was a complete credit file with all the necessary K.Y.C.”—know-your-customer—“documentation, pre-signed by the credit applicant and pre-signed by the credit department at T.I.B.C.”

After we ordered rabbit pies, I retrieved from my backpack some T.I.B.C. loan applications that had been leaked to Ernst & Young. Each one showed two signatures. Stewart’s name was next to the words “Recommended By.” The other signature was that of T.I.B.C.’s credit manager. But the black line that followed the words “Originated By” was blank; a Post-it note, bearing the words “Sign Here,” was affixed to the spot, indicating that the documents originated not with a credit applicant in Saudi Arabia but, rather, at T.I.B.C.’s offices in Bahrain. I told Stewart that it seemed unusual for a bank to anticipate a customer’s need for a loan—and to fill out all the paperwork in advance.

“Look, they just put this stuff in front of me,” he said, shrugging.

I suggested that he knew that there were sham customers in T.I.B.C.’s loan book, and that T.I.B.C. had defrauded other banks.

“The banks were not defrauded,” Stewart said, raising his voice. “They knew the risk they were taking.”

“They didn’t know the loan book was fake,” I said.

I didn’t know the loan book was fake,” he said.

Several months later, when I asked him whether he found it odd that so many loans were going to employees of Maan al-Sanea, he told me, “Look, I’m not stupid. I assumed all the companies were affiliated with Maan. . . . But I assumed, based on the documentation, that they were all legitimate companies.” Last month, he said that now, with hindsight, he could see that the loans were not genuine. But, he added, “I absolutely did not know that these funds were not being disbursed. Hand on heart, I swear.” We spoke a final time on March 29th. Stewart told me that to focus on the loan book was “a red herring” while also claiming that he had been “tricked, big time.” He said, “I was kept in the dark, and now Maan has dropped me in the shit.”

In an earlier conversation, I had asked him if he had learned any lessons from his years in Bahrain. “Never do business with princes or kings,” he said, laughing. He asked me if I had ever worked in the Middle East. I shook my head. “Things do not work in the same way down there as they do in the West,” he said. “It’s a different cultural environment that I know nothing about and have no way of penetrating. I’m just the hired help, way down the fucking food chain.” This was a departure from the language on Stewart’s Web site, in which he attests to his involvement in “some of the most significant transactions in Middle Eastern and Islamic finance,” providing him with “a unique insight into both the business and cultural aspects of this region.”

Another time, Stewart and I met for lunch on the patio at the Balboa Bay Club and Resort, in Newport Beach, where Stewart was a member. (Not long ago, he sold his Pacific Palisades home to pay for legal expenses, and is now renting a house in Huntington Beach.) I asked him if he missed life in the Gulf. “That’s why I studied Arabic in the first place,” he said. “I didn’t want to have an orthodox career. I wanted to have adventures. I wanted to go abroad and see the world. The trouble is that living in the Middle East is always a double-edged sword. When it’s going well, it’s just a fascinating place. When it’s going against you, you don’t have any recourse.” He went on, “One of the things about the United States I find very difficult is that there’s no ability to negotiate with the rules and regulations. Even things that are not necessarily sensible rules, you can’t negotiate.” He paused and said, “In the Middle East, you can negotiate anything.” ♦