LINDE v. ARAB BANK
In July 2004, Osen LLC sued Arab Bank, Plc on behalf of American terror victims in the U.S. District Court for the Eastern District of New York. The lawsuit, captioned Linde v. Arab Bank, Plc and brought under the Anti-Terrorism Act (ATA), was the first civil lawsuit brought against Arab Bank. The Plaintiffs sought to hold Arab Bank liable for deaths and severe injuries resulting from acts of international terrorism that Palestinian terrorist groups perpetrated between 2000 and 2004, during the Second Intifada. After 10 years of litigation and multiple appeals, American victims of terrorism were finally able to present their case to a Brooklyn jury in August and September 2014. The first trial centered around 24 terrorist attacks that the Plaintiffs alleged were perpetrated by Hamas, a Foreign Terrorist Organization that the United States first designated a terrorist entity in 1995. On September 22, 2014, an 11-person jury found Arab Bank liable for knowingly providing financial services for Hamas. This finding represented the first, and still only, time a financial institution has been held civilly liable for aiding terrorism.
The First Trial (August-September 2014)
During the course of the trial, which centered around 24 Hamas terrorist attacks between March 2001 and September 2004, the Plaintiffs proved that Arab Bank knowingly provided material support to Hamas by illegally maintaining accounts for: Hamas (via an account held in the name of senior Hamas leader and spokesman Osama Hamdan that accepted multiple checks explicitly made out to beneficiary "Hamas"; Hamas’s founder and supreme leader, Sheikh Ahmed Yassin (Yassin was first designated a Specially Designated Terrorist in 1995); and dozens of other Hamas leaders and senior operatives, including Salah Shehadeh - founder and former head of the Izz al-Din al-Qassam Brigades in Gaza, and Ismail Haniyeh, former Prime Minister of Hamas and current Hamas leader in Gaza. The Plaintiffs also proved that Arab Bank knowingly provided material support to terrorist groups such as Hamas and Hezbollah that facilitated millions of dollars in direct transfers to the families of suicide bombers and other terrorist operatives through the Saudi Committee for the Support of the Intifada al Quds and the Al-Shahid Foundation. Lastly, the Plaintiffs proved that Arab Bank knowingly provided material support to Hamas by maintaining accounts for eleven Hamas-controlled organizations in the Palestinian Territories.
One of Arab Bank's chief contentions, voiced by defense expert Beverley Milton-Edwards, was that the identities of Hamas leaders were not well known between 2000-2004. The jury, however, was shown a video of the funeral of the infamous Hamas bomb-maker, Muhanad al-Taher, in the town square of Nablus. Hamed Beitawi, vice-Chairman of the Nablus Zakat Committee and Chairman of the Islamic Solidarity Al-Tadhamun Charitable Society - Nablus (two of the eleven relevant Hamas-controlled organizations, both of which maintained accounts at Arab Bank) spoke at this very public event.
The Plaintiffs produced voluminous evidence that Arab Bank knowingly provided material support to a laundry list of terrorists in violation of U.S. anti-terrorism laws by facilitating payments from a Saudi Arabian charity known as the Saudi Committee for the Support of the Intifada al Quds in coordination with Hamas-controlled organizations.
The U.S. government itself provided evidence to Saudi Arabia in 2003 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. The funds were often transferred through integrated accounts at a number of major Saudi banks that were popularly referred to as Account 98."
Evidence introduced at trial established that newspapers placed advertisements in prominent Palestinian newspapers on behalf of the Saudi Committee requesting that the relatives of martyrs - whose names were listed - come to Arab Bank to receive payments. The jury was also shown examples of letters that individuals submitted to Arab Bank in order to prove that they were eligible to receive prisoner payments. The trial record also included martyr lists contained in Arab Bank's own files that listed the cause of death of Saudi Committee beneficiaries. "Martyrdom Operation" appeared numerous times on these lists. One of the lists in Arab Bank's own files listed Ayman Halawah, the infamous Hamas bomb-maker involved in three of the 24 Hamas terrorist attacks (Neve Yamin Gas Station Suicide Bombing (near Kfar Saba) - March 28, 2001; Dolphinarium Suicide Bombing, Tel Aviv - June 1, 2001; Sbarro Pizzeria Bombing, Jerusalem - August 9, 2001).
All told, $32,000,000 of the $35,000,000 (92.5%) that was processed by the Saudi Committee for the Support of the Intifada al Quds between 2000 and 2004 via Arab Bank to "martyrs," "prisoners," and the "wounded" was remitted in cash.
The Saudi Committee for the Support of the Intifada al Quds funds transfers included direct payments to a number of senior Hamas leaders including:
- Abd al-Fatah Dukhan - Hamas co-founder
- Ibrahim Al-Muqadama - Hamas's second-in-command of the Izz al-Din al-Qassam Brigades in Gaza until he was killed in 2003
- Ahmed Al-Ja'bari - Hamas’s commander of the Izz al-Din al-Qassam Brigades in Gaza until he was killed in 2012
- Nizar Rayan – former senior commander of the Izz al-Din al-Qassam Brigades
The Saudi Committee for the Support of the Intifada al Quds funds transfers also included payments to the families of senior Hamas leaders such as:
- Jamal Mansur
- Ahmed Al-Ja'bari
- Jamal Abu al-Hija
- Yousef al-Surakji
- Ayman Halawah
- Ibrahim Abd al-Karim Bani Awda
The Saudi Committee for the Support of the Intifada al Quds funds transfers also included payments to the families of 5 of the Hamas suicide bombers involved in the 24 Hamas terrorist attacks:
- Fadi Amer - Neve Yamin Gas Station Suicide Bombing (near Kfar Saba) – March 28, 2001
- Sa’id Houtari - Dolphinarium Suicide Bombing, Tel Aviv – June 1, 2001
- Izz al-Din al-Masri - Sbarro Pizzeria Bombing, Jerusalem – August 9, 2001
- Nabil Halabiya – Ben Yehuda Pedestrian Mall Double-Suicide Bombings, Jerusalem – December 1, 2001
- Assem Rihan – Emmanuel Settlement Bus Bombing and Shooting Attack – December 12, 2001
The Saudi Committee for the Support of the Intifada al Quds funds transfers also included payments to the families of Hamas operatives responsible for 12 of the 24 Hamas terrorist attacks:
- Fadi Amer, Ayman Halawah and Ra’ed Houtari - Neve Yamin Gas Station Suicide Bombing (near Kfar Saba) – March 28, 2001
- Sa’id Houtari, Ayman Halawah and Ra’ed Houtari - Dolphinarium Suicide Bombing, Tel Aviv – June 1, 2001
- Izz al-Din al-Masri, Ayman Halawah and Jamal Abu al-Hija - Sbarro Pizzeria Bombing, Jerusalem – August 9, 2001
- Nabil Halabiya – Ben Yehuda Pedestrian Mall Double-Suicide Bombings, Jerusalem – December 1, 2001
- Assem Rihan and Nasr al-Din Assida - Emmanuel Settlement Bus Bombing and Shooting Attack – December 12, 2001
- Muhanad al-Taher, Muhanad Sharim and Nasser Yataima – Park Hotel Bombing, Netanya – March 27, 2002
- Muhanad al-Taher – Patt Junction Bus 32A Bombing, Jerusalem – June 18, 2002
- Hisham Hijazi - Shooting Attack on Route 60, near Ofra – January 29, 2003
- Basel al-Qawasmeh - Kiryat Arba Shooting – March 7, 2003
- Basel al-Qawasmeh - Jaffa Road Bus 14A Bombing, Jerusalem – June 11, 2003
- Hisham Hijazi and Khaled Omar – Shooting Attack on Route 60, near Jerusalem – June 20, 2003
- Basel al-Qawasmeh – Bus 2 Bombing, Jerusalem – August 19, 2003
The Saudi Committee for the Support of the Intifada al Quds also transferred funds to many of the eleven Hamas-controlled organizations encompassed in this trial. Transfers to these Hamas-controlled organizations exceeded $15,000,000.
The Plaintiffs also introduced evidence that Arab Bank knowingly provided material support to Hamas by maintaining accounts and providing banking services to a eleven Hamas-controlled organizations, each of which is on the Israeli government’s blacklist of Unlawful Associations. The organizations are:
- Al-Mujama al-Islami - Gaza
- Al-Jam'iya al-Islamiya - Gaza
- Al Salah Society - Gaza
- Islamic Charitable Society – Hebron
- Jenin Zakat Committee
- Nablus Zakat Committee
- Islamic Solidarity (Al-Tadhamun) Charitable Society - Nablus
- Tulkarem Zakat Committee
- Ramallah–Al-Bireh Zakat Committee
- Al-Islah Charitable Society - Ramallah & Al-Bireh
- Al Nur Prisoner Society – Gaza
Al-Mujama al-Islami (the Islamic Center of Gaza) and Al-Jam'iya al-Islamiya (the Islamic Society of Gaza) were established in the 1970s by Hamas’s founder and supreme leader, Sheikh Ahmed Yassin. The Al Salah Society in Gaza was established a few years later by prominent Hamas leader Ahmed al-Kurd. All three organizations were well-known Hamas institutions operated by members of Hamas’s senior leadership. In 1997 the Palestinian Authority reluctantly cracked down on these organizations and arrested their (Hamas) leadership – only to reopen them soon thereafter. Arab Bank returned to the Gaza Strip after the 1993-1994 Oslo Accords. Hence, at the time it opened accounts for these organizations, they were well-established and well-known prominent Hamas institutions. In addition, several of the organizations, such as al-Islah Charitable Society - Ramallah & Al Bireh, were shut down by the Palestinian General Security because of their identification as belonging to the “Hamas movement.” Moreover, by February 2002, each of the 3 most infamous Hamas institutions in Gaza had been placed on the Israeli government’s blacklist of Unlawful Associations. The Al Salah Society in Gaza was also designated a Specially Designated Global Terrorist by the United States in 2007. In its Press Release regarding the designation, which encompassed Al Salah’s Chairman, Ahmad al-Kurd, the U.S. Treasury Department noted al-Kurd’s longstanding relationship with Hamas (“The al-Salah Society is directed by Ahmad al-Kurd, a recognized high-ranking HAMAS leader in Gaza. Al-Kurd’s affiliation with HAMAS goes back over a decade.”).
Nearly all of the eleven committees received money from organizations that have been designated Specially Designated Global Terrorists because of their affiliation with Hamas, including Interpal and CBSP. Evidence was also admitted at trial regarding the Union of Good, the umbrella organization of approximately 50 Islamic charities – including Interpal and CBSP – and funds that the U.S. government concluded was created by Hamas’s leadership in 2000. A video introduced at trial of a conference featuring Union of Good leader Sheikh Yousef al-Qaradawi and Hamas leader Khalid Mishal manifested the close relationship between the Union of Good and Hamas.
Arab Bank Maintained Accounts For At Least 11 Designated Terrorists
The District Court noted before trial that Arab Bank had disclosed account information related to “only one of eleven accounts that the [Bank] admits it maintained for [terrorist organizations].” Because Arab Bank withheld most discovery in the case based on over-ruled claims of foreign bank secrecy, it is unclear precisely which 11 designated terrorists the Bank has specifically admitted to maintaining accounts for, but from evidence independently gathered without the Bank’s cooperation, the following U.S.-designated terrorists appear to have maintained accounts with Arab Bank during the relevant time period:
- Sheikh Ahmed Yassin
- Osama Hamdan, Hamas senior spokesman
- The Holy Land Foundation For Relief & Development
- The Al Aqsa Foundation (Germany)
- Al-Salah Islamic Society
Arab Bank’s Financial Services on Hezbollah’s Behalf
According to open sources, during the relevant time period, the Al-Ansar Society distributed martyr payments on Iran’s behalf through its Arab Bank accounts. Evidence of this included announcements Al-Ansar published in the Palestinian daily newspaper Al-Hayat Al-Jadida on May 15-16, 2001 that called upon families of martyrs that resided in the West Bank to mail copies of documents proving their status as martyrs’ families (including martyr’s identification cards, the beneficiary’s identification card, a copy of the death certificate and a copy of the birth certificate of the martyr’s sons, if they had any).
On its then-operative website, Al-Ansar also identified its accounts with Arab Bank’s Al-Rimal branch in Gaza and clearly expressed its goal: to “open its doors to the families of martyrs who seek it in order to register their martyrs, who, with their noble blood, have watered the pure soil of Palestine, drawing thereby the features and portrait of the coming freedom and the coming dawn. Al-Ansar follows their path and shares with their families and their parents the grief, the burden and the hope.”
On October 23, 2001, Al-Hayat Al-Jadida reported that Al-Ansar received $1,000,000 from the al-Shahid Foundation (Martyrs Foundation) in Lebanon and that it completed distributing the money “for the seventh month” among families of martyrs through Arab Bank’s branches in the Palestinian Territories. On its internet website, the Martyrs Foundation was even more direct, publishing lists of Palestinian martyrs who received its support. Its lists were in some ways more detailed than the Saudi Committee’s lists (both those which were published on the Saudi Committee’s web site and those which were sent to Arab Bank) and included the dates of the martyr’s birth and death, as well as his organizational affiliation (Fatah, Hamas, Palestinian Islamic Jihad, the Democratic Front for the Liberation of Palestine or the Popular Front for the Liberation of Palestine).
Arab Bank’s History of Antipathy To the State of Israel and Jews
During the course of the trial, the Plaintiffs detailed Arab Bank’s historical, stated antipathy to the State of Israel and Jews. For example, evidence was introduced that Arab Bank had distributed calendars in the United Kingdom in 2001 and 2002 reflecting political sentiments of an anti-Israeli and anti-Semitic nature. The former Arab Bank Head of Compliance had testified at his deposition that he thought the calendars were “simply not appropriate.” In addition, the jury was informed of Arab Bank’s 2003 Annual Report in which the Bank stated: “The year 2003 was full of events that had important effects on the performance of different economic sectors, and throughout 2003 our branches in the Arab countries were affected by many negative pressure factors, headed by the continual difficult situation from which our brothers in Palestine suffer and by the occupying enemy's continual obstinacy and oppression – which were reflected negatively in the economic activity not only in Palestine, but also in Jordan and the rest of the Arab countries.”
After the jury rendered its unanimous verdict, Arab Bank filed 3 motions, arguing: (1) notwithstanding the jury’s verdict, Arab Bank was entitled to victory on the merits and dismissal of the case; (2) if the Court would not grant that relief, Arab Bank was entitled to a new trial because of purported mistakes the Court made in managing the trial; and (3) in any event, the Bank was entitled to immediate review of the verdict by the U.S. Court of Appeals for the Second Circuit.
The Court denied the Bank’s motions for a new trial and for Second Circuit review of the verdict. In its decision, the Court noted that the Bank’s liability was established “on volumes of damning circumstantial evidence that defendant knew its customers were terrorists.” The Court further noted the testimony of the Bank’s own former head compliance officer in London who was presented with the Saudi Committee wire transfer payable to “ the family of martyr Ibrahim Karim Beni Awda” and responded:
“[w]e would never in a million years have dealt with a payment order such as this.”
The Court’s decision also took note of the testimony of Arab Bank’s primary expert witness, Dr. Milton-Edwards, who testified that the organizations in the Palestinian Territories at issue in the case were neither controlled by Hamas nor perceived as Hamas affiliates during the relevant period based in part of her review of “paraphernalia” she observed during her visits to these organizations. The Court observed that her testimony “backfired in spectacular fashion” when “it came out on cross-examination that she could not read Arabic.”
Furthermore, the Court noted Dr. Milton-Edwards’ impeachment by her own book: She had testified that Islamic Society of Gaza was neither affiliated with Hamas nor perceived as such by the Palestinian public. Her book told a different story, however:
[t]he work of the Islamic Society and the rest of Hamas’s network in the decades up to, during and after the second intifada, when families needed it most, represented not so much a donation as an investment by Hamas, one that reached a lucrative political dividend in the 2006 election.
Ultimately, the Court concluded, “[t]he effect of cross-examination on Dr. Milton-Edwards’ testimony, and its potential spillover effect on the credibility of defendant’s entire case, is … hard to overstate.”
Arab Bank’s Appeal
Following the Court’s denial of the Bank’s motions for a new trial the parties prepared for the first damages trial, which the parties agreed to postpone once they reached a framework for settlement of all of the Plaintiffs’ Anti-Terrorism Act-related claims.
As part of the settlement, the Bank reserved the right to take a one-time appeal of the liability verdict the outcome of which would determine the settlement’s precise contours. The briefing is complete and the Second Circuit is tentatively scheduled to hear oral argument in May 2017.