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Judge issues stay on charity's civil lawsuit against U.S.

CHICAGO, Illinois (CNN) -- An Islamic charity's civil lawsuit against the government cannot go forward until a criminal case against that group's executive director is resolved, a federal judge ruled Tuesday.

Judge James H. Alesia issued a stay, preventing the lawsuit from the Benevolence International Foundation against Attorney General John Ashcroft and other members of the federal government from going forward.

The group filed the lawsuit after the government froze its assets last year, suspecting it of supporting terrorist activity. The charity sought to have its assets returned.

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But Alesia said he could not consider the merits of that lawsuit until the criminal case is settled.

He cited the government's arrest of Enaam Arnaout, the group's executive director, a 39-year-old Syrian-born naturalized U.S. citizen

Last month, the FBI arrested Arnaout, alleging he had a decades-long relationship with Osama bin Laden and his associates. Arnaout was charged with perjury because, according to federal prosecutors, he lied under oath about the organization providing "aid or support" to terrorist groups. The charity itself was also charged with perjury.

The perjury charges stem from court papers that the charity had filed in support of its lawsuit.

Monday, another federal judge refused to throw out the criminal case. A bond hearing is scheduled for Arnaout Thursday.

During the latest hearing, the government released photos that, it said, showed Arnaout in Afghanistan posing with weapons. The government said separate photos of bin Laden at the same site have also been recovered and that the photos point to a relationship between the two men.

Defense attorney Matthew Piers said the photos do not show any wrongdoing. He said people often posed with weapons in that area of Afghanistan during the 1980s, and he compared such photos to those of children "posing with Mickey outside of Disneyland."

The government also presented a letter addressed to bin Laden and signed by what investigators say is Arnaout's alias, and one to that alias signed with what they said is bin Laden's code name. The letters and the photos were found on computer discs seized by Bosnian authorities in a March 19 raid of the Bosnia office of BIF, and the homes of people connected with it.

Prosecutors also presented documents that allegedly detailed how BIF channeled $685,000 to Chechnya during four months in 2000. It said the money went to various terrorist groups, including bin Laden's al Qaeda.

Prosecutors said that the people who donated to BIF "were victims, not criminals" and most were unaware of the group's activities.

BIF's main office is in Palos Hills, a Chicago suburb.