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