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.
