The New York branch of Arab Bank is a virtual ATM for suicide bombers' families, a group of terror victims and their relatives allege in a federal lawsuit.
The plaintiffs have accused the Jordan-based Arab Bank of "knowingly administering the distribution of financial benefits" to Palestinian terrorists by channeling millions from Saudi depositors to the accounts of bombers and their families through the Madison Avenue branch, as well as providing banking services to Hamas.
"The money, which originates in Saudi Arabia and the Gulf states, is transferred through New York, converted into dollars and forwarded to the West Bank and Gaza Strip, where Arab Bank has a dozen or so branches," said Gary Osen, one of the plaintiff lawyers. "The bank as a whole serves as a distribution mechanism for what we call the 'universal insurance coverage plan' for terrorists."
According to court papers, Arab Bank "assists in distributing funds to support the terror campaign" of Hamas by providing banking services through an account in its Beirut branch to collect funds directly in the organization's name and through front groups.
In a statement on Wednesday, Arab Bank called the assertions "totally irresponsible," and insisted it acted ethically. "This litigation is unfortunate and baseless and will be forcefully defended in the courts," said the statement.
A spokeswoman for Arab Bank in New York did not immediately return calls for comment on Tuesday.
The $875 million suit was filed in U.S. District Court for the Eastern District on July 2 by relatives of U.S. citizens living in Israel who were victims of terror, and the widow of a former U.S. Marine killed by a roadside bomb in Gaza last October while protecting American diplomats.
They are represented by the Terror Victims Litigation Project, a group of four law firms in New York, Dallas and Oradell, N.J. Peter Raven-Hansen, a professor of national security law at George Washington University, is also participating in the lawsuit.
"We have to hit them in the pocketbook," said Maida Averbach, the mother of one of the plaintiffs, Steven Averbach, 38, of New Jersey, who became paralyzed after trying unsuccessfully to stop a suicide bomber on a Jerusalem bus in May 2003. "If we tie up their funds in this country, maybe future funnelers will take heed."
Osen said a Web site posted by the Saudi Committee in Support of the Intifada Al Quds openly declared that the group distributes funds to the families of Palestinian "martyrs." According to the suit, the committee pays out $5,316 to the families of dead terrorists and lesser benefits to those who are injured or arrested.
"Mainly it's in plain view if you read Arabic and know where to look," said Osen.
The sum of $875 million in damages is based on prior judgments in terrorism-related cases, including the judgment against Iran won by attorney Stephen Flatow in the death of his daughter, Alisa, in 1995.
Flatow in 1998 convinced a federal court that Iran backed the Islamic Jihad terrorists who carried out a bus bombing that killed Alisa as well as seven Israeli soldiers in Gaza. He was awarded $247 million. All but 10 percent of that money, however, remains frozen and uncollected.
Flatow this week applauded the new litigation but was skeptical.
"We believed, as do officials in the Bush administration, that if you make terrorism expensive to its supporters, they will get out of the business," he said. "But while it's the government's policy to deprive sponsors of terrorism of their money, they don't look too happily when private individuals try to do it."
Flatow said he is still battling officials in the State, Justice and Treasury departments to identify Iranian assets that may not have been seized.
"If the [Arab Bank] does business here, there is a chance they [the plaintiffs] will be able to reach their assets," he said. "Unless for some reason they are declared sacrosanct by Justice or State."
In addition to Averbach, the other plaintiffs are relatives of:
- New Yorkers Eugene and Lorraine Goldstein, who were seriously injured when their car came under fire in June 2003. Their son, Howard, was killed in the attack.
- Tehila Nathansen, 2, who was killed in a bus bombing last August. Several family members were seriously injured.
- Koby Mandell, 13, who was killed while hiking in the Judean Hills in May 2001.
- John Martin Linde Jr., a security contractor for DynCorp in Israel who was working to pay for cancer treatments for his wife, Courtney, when he was killed with two other Americans at the Hanoun Junction in Gaza in October.