A federal court in New York has handed American victims of terrorism a major victory in the case of Linde v. Arab Bank. The order Monday by U.S. District Judge Nina Gershon, issued against a bank that is alleged to have provided financial services to international terrorist organizations, imposed sanctions that will undercut any attempts by bank officials to claim ignorance of its clientele.
In a complaint filed in 2004, thousands of plaintiffs brought claims against Arab Bank for knowingly aiding and abetting terrorists and terrorist organizations which sponsored suicide bombings and other attacks on civilians in Israel. Plaintiffs alleged that:
"Arab Bank knowingly and intentionally, both directly and indirectly, facilitated the attacks by the Islamic Resistance Movement ("Hamas"), the Palestinian Islamic Jihad ("PIJ"), and al Aqsa Martyr's Brigade ("AAMB"), and the Popular Front for the Liberation of Palestine ("PFLP") by 'soliciting, collecting, transmitting, disbursing and providing the financial resources that allowed those organizations to flourish and to engage in a campaign of terror, genocide, and crimes against humanity in an attempt to eradicate the Israeli presence from the Middle East landscape.'"
In an attempt to prove their claims that Arab Bank was not merely the indifferent provider of "routine banking services" that it claimed to be, plaintiffs sought access to bank records that would have established the identity of Arab Bank's terrorist clientele. Despite repeated court orders to turn over the documents, the bank refused. Among the records sought were:
- Account records for ten of eleven accounts Arab Bank admitted it maintained for terrorist groups or individuals;
- Account information of seven charitable organizations alleged to be terrorist fronts;
- Internal bank communications relating to the Saudi Committee, which allegedly maintained a "martyr's death insurance plan" for Hamas.
As the court explained in discussing the bank's continuing intransigence, "it is now apparent that the delay was for no purpose at all; defendant never intended to produce certain documents, regardless of this court's rulings."
Evaluating the evidence presented thus far, the court found that plaintiffs have shown that from 1994 to 2004, the bank provided financial services to designated foreign terrorist organizations; processed transfers for charitable organizations serving as fronts for Hamas; and that the bank facilitated the Saudi Committee's "death insurance" plan.
And all of this was established despite the bank's unwillingness to comply with court orders. Recognizing that the plaintiffs had been denied evidence that is "not only relevant but also essential to proof of their claims," and because the bank "has articulated no reason for its recalcitrance other than the bank secrecy grounds already rejected," the court approved plaintiff's request to sanction the Bank.
Since the beginning of the lawsuit, Arab Bank has claimed that it was merely providing "routine banking services" to its clientele, and had no idea who its clients were or what the money was being used for. This week's order takes that defense off the table. The Bank will not be permitted to argue that it did not knowingly transact business with Hamas. Such a sanction is necessary, as the court explained, "to prevent defendant from affirmatively profiting from gaps in the evidentiary chain that it is solely responsible for creating."
Additionally, at trial, a date for which has not yet been set, the jury will be instructed that it may infer:
- That Arab Bank provided financial services to organizations designated by the United States as Foreign Terrorist Organizations;
- That it processed and distributed payments on behalf of the Saudi Committee to terrorists.
This decision will have little effect on future claims of ignorance by other financial institutions associated with terrorism, but it certainly establishes a precedent for failure to cooperate with court orders.