NY court to hear landmark terror financing case

By YONAH JEREMY BOB, JPOST

Complaint describes scheme by which Arab Bank administers “insurance plan” by giving benefits to families of suicide bombers.

US Eastern District of New York Judge Nina Gershon will hold a key hearing on Wednesday in what could be the first terror financing case against a bank to go to trial in United States history.

The potential blockbuster case against Arab Bank has already been featured on CBS’s Sunday Morning show and, in addition to setting significant and binding precedents, could have a “meaningful impact on banks” that finance terror groups “for profit because they are indifferent to just another customer and don’t care,” said lead litigator Gary Osen.

It will increase the risk for funding terrorist groups such as Hamas and al-Qaida and may change the conduct of institutions and banks that do business in gray areas, he continued.

The case involves allegations of large transfers to Hamas leadership institutions and families of Hamas prisoners and suicide bombers via Saudi Arabia and Hezbollah’s al-Shahid Foundation.

If the case goes to trial, it will shine a spotlight on how Hamas and its leaders have been funded over the past 10 years, offering the public an unprecedented and highly documented glimpse into the nuts and bolts of their financing.

The lengthy list of terror attacks in 2001-2003 involved in the case includes: the Sbarro Pizza attack in Jerusalem; the Dolphinarium discotheque attack in Tel Aviv; the multiple suicide bombings on Ben-Yehuda Street in Jerusalem on one Saturday night; the Cafe Moment and Cafe Hillel bombings in Jerusalem; the Park Hotel Passover Seder attack in Netanya and the explosion at the Sheffield Club in Rishon Lezion.

While major judgments have been won against terror entities and third party banks and organizations that finance terror, they have all been by default, meaning the defendants were too afraid of the consequences to show up, or at least denied the court’s jurisdiction.

Because these were default judgments, they have not set binding precedents to the same extent that a contested all-out legal battle leading to a trial by jury and a final judgment on the merits would have.

They also have saved the banks and terror groups from having to expose their financial dealings to the public on a high-profile stage.

This is the first case in which a bank has fought the charges, filing a motion for summary judgment, or a motion that means that the bank has fully shown up in court and is fully contesting the evidence against it, while trying a last ditch attempt to avoid a full trial.

The hearing itself delves deep into the details and legal principles of how much proof is needed to win a counterterrorism lawsuit and, for the first time, whether the plaintiffs have sufficient proof to go to trial.

If the court rejects Arab Bank’s summary judgment motion, the case will be the first to go to trial.

Shurat Hadin – the Israel Law Center – has had a case go to trial in Israel, and won many large default judgments in the US, including setting precedents, but this is the first case against a bank to get to summary judgment and would be the first to go to trial.

The lawsuit alleges that Arab Bank laundered Saudi payments to the families of suicide bombers and other funds intended for Palestinian terrorist groups through its now-defunct Madison Avenue branch.

The Saudi funds were then rerouted from New York to local branches of Arab Bank in the West Bank and Gaza Strip and paid out to the personal accounts of hundreds of terrorists and their families as well as to Hamas front organizations and other Palestinian terrorist groups.

The lawsuit also seeks damages from the bank for openly providing financial services to terrorists through accounts held directly in the name of Hamas and its many front groups.

The complaint describes the scheme by which Arab Bank administers a comprehensive terrorist “insurance plan” by distributing death and dismemberment benefits to families of suicide bombers and other terrorists.

The first suit filed against the bank was Linde v. Arab Bank brought by the widow of an ex-Marine killed while securing American diplomats in Gaza – along with several other plaintiffs – and several subsequent lawsuits have been filed.

The victims range from American tourists – such as the Goldstein family, who came to Israel for a family wedding and the Sokolow family who came for vacation – to students studying abroad at Hebrew University and Israeli-American dual citizens who boarded the wrong bus or visited the wrong cafe.

While Osen of Osen LLC will take the lead on the case, there are more than a half-dozen law firms involved in the cases.

The ATA case, which relates to American victims of terror, involves over 100 families and the first trial contemplates covering 24 Hamas terrorist attacks.