TULUM, Mexico -- It was a strange trial. For every session inside a Milan, Italy, courtroom, teams of prosecutors, judges and court-appointed defense attorneys reported for duty. But the 26 American defendants, most of them Their own attorneys, in most cases, had never met the defendants, and weren't even sure of their real names. The 2007 trial involved the "extraordinary rendition" of a radical Egyptian Islamic cleric, whom members of the CIA team kidnapped in broad daylight from a Milan street in 2003. The man, Hassan Osama Nasr, also known as Abu Omar, was bundled into a U.S. military jet and transported to Egypt, where he alleges he was tortured. The trial in Milan represented the most thorough exposure to date of the controversial rendition tactic, used by the George W. Bush administration supposedly to capture terrorism suspects. The practice, started during the Clinton years, involved moving suspects to third countries where, in many cases, they say they were tortured. Though most of the defendants never acknowledged the court at all, the former CIA station chief in Milan, Robert Seldon Lady, did try to argue, through an attorney, that as a member of the U.S. mission's consular staff, he had diplomatic immunity. All the defendants were convicted, and Lady received the longest sentence of any, nine years. He remained a fugitive, but that status may have now changed. Reports from Italy say that Lady was arrested this week in Panama. Armando Spataro, Milan's crusading prosecutor who championed the case, told The Times that Lady had traveled to Costa Rica, where authorities sent him back to Panama. There, acting on an international warrant issued by Italy, border police detained the former station chief, Spataro said. Panama has not officially acknowledged this and, with a conservative government that enjoys close ties to Washington, will find itself in a bit of a dilemma if it considers an eventual extradition request from Italy. The two countries do not share an extradition treaty. The team of CIA contractors that seized Abu Omar was especially sloppy. They spoke freely on their cellular telephones and ran up big tabs at fancy hotels and restaurants that they paid with credit cards. Much of this allowed Spataro and other investigators to retrace their steps and identify those involved, albeit several with aliases. Though most of the convicted men and women have dropped out of sight, Lady, now 59, did not go as quietly. He gave bitter interviews to a couple of magazines and book writers, suggesting that he felt betrayed by the agency he had served for nearly a quarter of a century. It is not clear what he was doing in Panama, although he was born in Honduras to American parents and is known to have traveled there on occasion in recent years. As strange as that trial was, it was remarkably significant -- the public and formal indictment of a fellow NATO ally's intelligence agents was unprecedented, endured as a serious political dispute between the U.S. and Italy and much of Europe for years, and may have forced a reassessment of the controversial rendition practice. Wilkinson, as The Times" Rome bureau chief, covered the Nasr case and CIA trial from 2005 through 2008.