The Jordan-based Arab Bank, which shut down its New York branch earlier this year amid allegations of terrorist ties, is facing some $40 million in fines from the U.S. government as evidence emerges that it helped Hamas, Hezbollah, al-Qaeda and other groups, according to media reports.
The fine would be levied as penalties for failing to disclose transactions with groups the government considers supportive of terrorism, The Wall Street Journal reported, noting that the transactions largely took place before the groups were so designated.
Banking records showed that at least one Israeli bank, Israel Discount Bank, also moved funds for the same groups, as did the U.S.-based Citigroup, although neither group is under investigation, the Journal reported. A spokeswoman for Israel Discount Bank told the paper she was unfamiliar with the transactions.
Arab Bank also is facing civil penalties as high as $1 billion sought by two groups of terror victims and their families, who allege that the bank wired compensation to the families of suicide bombers from Saudi contributors.
The Journal reported last week that the Office of the Comptroller of the Currency (OCC), which regulates U.S. banking activity, found evidence that Arab Bank channeled more than $20 million from some 45 suspected terrorists and terror groups, and 20 Islamic charities identified as conduits for terror groups by the U.S. government.
The bank also is suspected of having ties to an offshore bank accused of aiding 9-11 mastermind Osama bin Laden, and with a Brooklyn ice cream shop tied to the al-Qaeda wing in Yemen, the Journal reported. Only some of the suspect transactions were reported to authorities here, as required by law, the report found.
An executive of the bank, Shukri Bishara, acknowledged the transactions but insisted that Arab Bank was unaware of a program to aid suicide bombing, which he called “an abominable act” in an interview with the Journal.
The Journal noted that the bank has a history of working with the U.S. and Israeli governments, opening branches in the West Bank and Gaza to help further the peace process by facilitating the Palestinian Authority’s economy.
That changed after the 9-11 attacks, when both countries began to track more aggressively the funding of terrorists, which led to the investigation of Arab Bank.
NBC News reported that the OCC has referred the Arab Bank case to the Justice Department for possible prosecution under recently enacted anti-terrorism statutes. NBC also said the OCC found “hundreds” of matches when it compared the names of suspected terrorists against lists of Arab Bank customers and others who sent or received wire transfers through the bank.
Gary Osen, a New Jersey lawyer representing American plaintiffs in the civil suit, said in a statement, “The OCC acted aggressively in this case and … the question that remains is whether the rest of the government will stand up for American terror victims or will it let the bank get away with a slap on the wrist.”
The closure of the Arab Bank branch on Madison Avenue means the institution may no longer accept deposits here, although it can still do limited business in international transactions.
Arab Bank, founded in 1930 by Palestinian entrepreneur Abdul Hameed Shoman, now has some $32 billion in assets and is substantially held by members of the Saudi and Jordanian government. The bank, which operates in 30 countries, reported profits last year of more than $300 million.