Decisions in two federal court cases this week appear to make it easier for American victims of terrorist attacks to hold a terrorist groups’ bankers responsible for its actions, opening the door to similar suits.
A jury in Brooklyn Federal Court Monday found that Arab Bank, a major multinational Jordanian-based institution, knowingly provided financial support to the terrorist organization Hamas, marking the first time that a financial institution has been held civilly liable for supporting terrorism.
The jury returned the verdict Monday afternoon after having deliberated nearly two days. A new trial must now be held with a new jury to hear evidence about the nearly 300 Americans who were killed or maimed in 24 Hamas terrorist attacks in Israel from 2001 to 2004. The jury will then be asked to determine how much the bank must pay those who were injured or the estates of those killed. No date for the new trial has been set.
The verdict came just hours after the Second Circuit U.S. Court of Appeals in New York unanimously reinstated a similar lawsuit against a different bank — National Westminster Bank — by about 200 American victims of alleged Hamas terrorism in Israel.
The appeals court said a lower court erred in dismissing two suits against NatWest, whose parent company is the Royal Bank of Scotland Group.
“The verdict in the Arab Bank case sends a very powerful message to financial institutions that they must know their customers,” said David Miller, who until recently was a federal prosecutor in Manhattan who had worked on terrorism cases. “It also says that they must keep strict compliance with U.S. terrorism financing and bank secrecy laws. And it may likely result in follow-on suits against banks for violations of the Anti-Terrorism Act.”
He noted that similar civil suits are pending against financial institutions and that this was the first private civil suit to go to trial. “Trials are always risky and parties traditionally settle before trial,” Miller told The Jewish Week. “But this resounding victory could embolden other parties to take the risk and go to trial.”
Peter Raven-Hansen, a George Washington University law professor who worked on the Arab Bank case, told The Jewish Week that the jury was telling banks that they “cannot simply hide behind their OFAC filters.”
He was referring to a computer program known as OFAC (Official Foreign Asset Control), which contains a list of known terrorists compiled by the U.S., the United Nations and the European Union.
“If they see Osama bin Laden come in to empty his bank account, they simply cannot say he is not on the list,” Raven-Hansen said. “If they are obviously dealing with someone who is known to be a terrorist, they must act.”
He said the lesson of these cases would likely also apply to companies that provide money to terrorists. For instance, in a case pending in Florida, Chiquita Brands International, the well-known banana company, has been sued civilly for allegedly funding terrorist guerrillas in Colombia. It pleaded guilty to similar charges in 2007 and paid the U.S. $25 million in fines. Chiquita has reportedly insisted that the payments were protection money to ensure that their farm workers would not be killed.
“There is no defense that says you can make the payments if it helps your profit line,” Raven-Hansen said. “You just can’t do it, no matter what the reason.”
The Anti-Terrorism Act allows plaintiffs to sue for actions committed within the last 10 years. But Raven-Hansen said he does not expect to see “an explosion of suits against banks” because plaintiffs still have the burden of proving the bank was aware it was handling transactions for a terrorist group. The Arab Bank case took 10 years to prepare.
“In the case of Arab Bank, these guys were Hamas’ bankers,” he said. “But you can imagine other banks that do not nearly fit that bill.”
Gary Osen, one of the plaintiffs’ attorneys in the Arab Bank case, said after the verdict, “Every bank, every company and every government in the world now has to decide whether it is willing to continue doing business with an institution proven to have knowingly supported terrorism and proven to have helped murder Americans.”
In a statement Monday, Arab Bank said would appeal the decision, saying its hands were tied by pretrial rulings.
During the trial, attorneys for the plaintiffs presented evidence that Arab Bank transferred more than $30 million to Hamas-controlled institutions in the Gaza Strip and the West Bank and that the bank served as the conduit between several charities that funneled money to Hamas. Among them was the Saudi Committee in Support of the Intifada Al Quds, a Saudi charity established in October 2000 that provided financial support to the families of Hamas suicide bombers, those who were injured in attacks and those who were imprisoned by Israel.
Among the terror attacks cited in the suit are three of the most well-known in Hamas’ reign of terror during what became known as the second intifada: the Dolphinarium discotheque suicide bombing in Tel Aviv; the Sbarro pizzeria bombing in Jerusalem; and the Passover Massacre — the bombing of the crowded dining room of the Park Hotel in Netanya during the Passover seder in 2002.
After the jury began deliberations, the plaintiffs received a memorandum from the U.S. State Department that said the U.S. in 2003 had provided Saudi authorities with evidence that the Saudi Committee “was forwarding millions of dollars in funds to the families of Palestinians engaged in terrorist activities, including those of suicide bombers.”
Michael Eisner, an attorney for the plaintiffs who had requested the information, said in a statement that the “timing of the State Department’s disclosure raises deeply troubling questions.”
The State Department did not respond to a request for comment by press time.
“Obviously, the jury reached the same conclusion about the Saudi payments in finding Arab Bank guilty for its support of Hamas, but this last minute disclosure of this evidence six years after we requested it and hours after the jury began its deliberations is telling,” he said.
In the trial, which lasted nearly six weeks, the jury heard evidence that Arab Bank held accounts of several senior Hamas leaders, including Hamas founder and spiritual leader Sheikh Ahmad Yassin and current Hamas leaders Osama Hamdan and Ismail Haniyeh.
In his summation last Thursday, Mark Werbner, another plaintiffs’ attorney, had asked the jury of eight women and three men to “send a message” by finding Arab Bank guilty of providing Hamas with the money it needed to carry out the 24 deadly attacks.
“They won’t accept responsibility unless and until you make them,” he said. “It was pretty foreseeable that by helping this organization and facilitating financing services that bad things were going to happen. … The message you can send will reverberate around the world and reverberate as a message to these families that there is justice.”
During the course of the trial before Brooklyn Federal Court Judge Brian Cogan, officials and employees of Arab Bank testified that they had no idea that any of the financial transactions they processed was for Hamas terrorists or for charities that were raising money for Hamas.
The attorney for Arab Bank, Shand Stephens, said in his summation that there had not been “one word of testimony that anyone [associated with the bank] supported terrorism — not one word.”
Stephens argued that evidence showed that the bank ran all transaction requests through OFAC and, regarding the claim that Arab Bank helped charities that raised money for Hamas, Stephens noted that the United States Agency for International Development “gave money to charities that they [the plaintiffs] say were Hamas controlled.”
Attorneys for the 297 American plaintiffs killed or seriously injured in the terror attacks claimed Arab Bank did know and that Hamas could not have acted without the Jordanian-based bank.
In his closing arguments to the jury, another attorney for the plaintiffs, Tab Turner, said the “greatest force of evil in our society today is terrorism. And these terrorists cannot function, they cannot operate, they cannot preach, they cannot buy weapons, they cannot commit suicide with bombs, without money.”
He said also that Arab Bank’s refusal to release certain bank records, citing privacy laws of its host countries, caused the judge to tell the jury that they may infer those records were damaging to the bank.
“It wasn’t a mistake” the records were withheld, Turner told the jury. “This bank said no, we’re not giving you those records. What’s so important in those records that they don’t want the jury to see? They did not want you to see the money going into those accounts, the money going out, where it was going — and the internal bank correspondence discussing the accounts.”
Among the plaintiffs in the case was Sarri Singer, who was injured in a 2003 suicide bombing.
“I started crying when the email came in,” Singer, the daughter of New Jersey state Sen. Robert Singer, told JTA shortly after the verdict was announced.
Singer was on the No. 14 bus in Jerusalem on June 11, 2003 when the suicide bomber — standing a few feet from her — blew himself up. Sixteen people on the bus were killed and 100 others were injured. Singer broke her clavicle and she still has shrapnel lodged in her mouth.
“I feel very validated and acknowledged as a victim of terror,” Singer said. “The jury has given us a sense that there is someone responsible for what happened to us.”