Рубрика: Без рубрики

In the first trial of its kind, a federal court said Monday that Arab Bank is liable for deaths caused by Hamas and a Saudi charity that used its accounts to reward terrorism.

A jury in the Eastern District of New York ruled in the decade-old case that the Amman-based financial institution should pay the families of individuals killed by Hamas in reparation for providing banking services to the group’s leaders and facilitating payments to relatives of suicide bombers.

Using Arab Bank accounts, the Saudi Committee in Support of the Intifada Al Quds offered the payments as a reward to the families of any Palestinian terrorist, regardless of group affiliation, according to the plaintiff’s attorneys, who said the program functioned with the financial institution’s consent.

The bank, which is planning to appeal, said in a lengthy rebuttal that earlier court sanctions had prevented it from sharing exculpatory evidence. In June, the U.S. Supreme Court rejected a petition by Arab Bank to review sanctions allowing a jury to infer possible wrongdoing from the institution’s refusal to turn over requested financial data.

For international financial institutions serving clients in conflict zones, the decision is a «shot over the bow,» according to Dennis Lormel, former head of the FBI’s Terrorist Financing Operations Section, who characterized the evidence against Arab Bank as «overwhelming.»

The decision is the most high-profile ruling to date for a raft of civil lawsuits attempting to hold banks liable under the U.S. Anti-Terrorism Act. But that doesn’t mean it will serve as a precedent for other cases, according to Prof. Jimmy Gurule, a University of Notre Dame law professor who served as an expert consultant for the plaintiffs.

Unlike litigation against other financial institutions, the plaintiffs predicated their complaint on the facilitation of a benefits program for the family of Hamas suicide bombers rather than the provision of basic banking services, said Gurule, a former U.S. Treasury Department undersecretary of enforcement.

«The jury ruled that these benefits programs incentivized the recruitment of terrorism and the facilitation of future terrorist attacks. Its ruling doesn’t mean that every financial service that a bank provides will spell trouble for them going forward,» he said.

In the 2004 complaint, plaintiffs cited the deaths of loved ones in suicide-bomb attacks in Israeli restaurants and buses in the early 2000s. The attacks resulted in the «killing, attempted killing and maiming of scores of American citizens in Israel since September 2001,» they said.

Although the first trial of its kind, the case is certainly not the last, according to Lormel.

«I guarantee you this is not the last case you’re going to see,» he said, citing another lawsuit advancing toward trial.

Mexico’s partial reversal of 2010 limits on U.S. dollar deposits will make it easier for narcotics traffickers to launder drug proceeds through Mexican banks, according to current and former investigators.

On Friday, President Enrique Peña Nieto said his administration would end the cap on deposits by corporate clients of border banks provided that they have been incorporated for at least three years, can show that they have a need for the money and will agree to stricter anti-money laundering controls.

The 2010 rules barred banks from accepting American cash from corporate clients for currency exchanges, transfers and remittances except in specified zones, largely near the U.S. border. Those banks can accept no more than an aggregate of $14,000 from a single corporate customer per calendar month, under a December 2010 amendment to the regulations.

In a statement that also disclosed the closure of nine security checkpoints in Mexico’s border-states, Peña Nieto’s office said the decision will «accelerate the growth of thousands of businesses, especially in the border region.»

The reversal provides an «opportunity» for money launderers in Mexico, according to Joseph Burke, director of the U.S. Department of Homeland Security’s National Bulk Cash Smuggling Center. In response to the 2010 restrictions, cartels resorted to more complex methods of moving dirty money—something that may now be less necessary, he said.

«If we look at how it was operating before, bulk cash was making its way into Mexico, then back to the U.S. and other places,» said Burke. «Now instead of having to come back into the U.S., it can be placed in these businesses [and then] you’ll have one less movement that will occur during the process.»

With the restrictions lifted, drug trafficking groups will «almost immediately» exploit legitimate businesses along the border, according to Anthony Coulson, a former assistant special agent in charge with the U.S. Drug Enforcement Administration’s Tucson office.

«Same thing happened when [U.S. Customs and Border Patrol] decided to give fast passes or expedited clearances to companies if they had background checks,» said Coulson, now a consultant at Strategic Applications International. «Within a day of that happening, every drug organization in the world was targeting those [businesses].»

When restrictions were first implemented in 2010, American banks along the border immediately saw a spike in cash deposits, multiple sources confirmed at the time.

Laredo, TX-based IBC Bank responded by capping monthly deposits at $5,000, a policy that resulted in «a reprieve» from clients showing up with cash, said Juan Pablo Bolaños, a senior Bank Secrecy Act specialist who did not speak on behalf of the financial institution.

By 2012, American law enforcement officials had begun investigating the exploitation of casas de bolsa, a type of brokerage firm, to circumvent the deposit rules.

At the direction of cartels, cash couriers for the companies declared tens of thousands of dollars at border crossings and then deposited the sums in corporate accounts at U.S. banks. Accountholders then wired the money into Mexico-based accounts, thus avoiding cash limits.

Coupled with a broad U.S. crackdown on companies in Los Angeles’ fashion district last week, Friday’s decision will again change how cartels hide drug proceeds, according to Burke, who also noted that both events occurred within 72 hours of one another.

The American investigation, known as Operation Fashion Police, has resulted in the seizure of approximately $100 million in cash and property purportedly linked to a scheme to disguise money for the Sinaloa cartel through the use of the Black Market Peso Exchange.

«Trade-based money laundering has played a significant role in the flow of illicit funds [and] now we’re simply moving back to loading money up in a vehicle and potentially just driving it across the border into Mexico,» said Burke. «The most difficult part of the money laundering cycle is the placement.»

Asked about the amended restrictions, a U.S. Treasury spokesperson said the department continues to «cooperate closely with our Mexican counterparts and, in particular, the Mexican Secretariat of Finance and Public Credit (Hacienda),» the organization charged with monitoring the border businesses.