BROOKLYN, N.Y. (CN) – The unprecedented civil trial of Arab Bank ended Monday with a federal jury holding it liable for 24 Hamas-sponsored suicide attacks in Israel.
Never before has a financial institution been held liable in the United States for providing material support to a known terrorist organization under the Anti-Terrorism Act, which allows American victims of terrorist attacks to seek compensation. Hamas was branded a terrorist group by the United States in 1997.
The verdict comes 10 years after the filing of the suit by the families of 300 victims of 24 separate Hamas-led suicide attacks in Israel during the Second Intifada between 2000 and 2004.
Gary Osen, an attorney for those plaintiffs, noted after the verdict that Arab Bank “fought us tooth and nail for a generation.”
He and co-counsel hugged after U.S. District Judge Brian Cogan, who presided over the six-week trial, published the decision. The verdict marks an “enormous milestone against the largest financial institution to be held liable for knowingly supporting terrorism,” Olsen said.
Joshua Faudem, one of the plaintiffs in the case who was injured by a suicide bomber in Tel Aviv in April 2003, lauded the decision.
“I strongly believe that this jury’s verdict marks a critical point in history and hopefully a turning point in the war against terrorism, especially now that we are faced with the rise of more terrorists,” Faudem said. “By cutting off the financial support for terrorism, we are able to hurt terrorists the most. Without funding, they are not able to have the means to support equipment, bombs or arms.”
Shand Stephens, the attorney for the Amman, Jordan-based bank, blasted the decision and remained confident it would be overturned.
“Evidence in this case this thin would never have resulted in a verdict unless there were errors in the admission of evidence, errors in the instructions, and errors in imposing sanction that the United States has already told the Supreme Court was improper,” he said after the hearing. “The evidence in this case is a mile wide and an inch deep.”
Arab Bank said in a statement after the decision was the result of nothing more than a “show trial.”
“Arab Bank predicted that any proceeding conducted under the district court’s improper sanctions, which the U.S. government found to be ‘erroneous,’ would be nothing more than a show trial,” the bank said in a statement. “Today’s verdict, finding the Bank liable for legitimate and routine financial services, comes as no surprise.”
Cogan said he had “no view” on whether the decision was “right or wrong,” but endorsed the jury’s handling of the case.
“You all did it right,” Cogan told the 11-member jury, adding that the case is a “long way from over.”
The jury deliberated all day Friday and came back with the verdict Monday afternoon. A separate jury will determine damages, but the date for such proceedings has not been set.
While Osen said the ruling “won’t turn the War on Terror,” he added that the case has hammered home the lesson “that terrorist organizations depend on the financial systems to operate.”
Osen’s co-counsel Michael Elsner echoed this point. “This jury’s verdict should be a wake-up call to all financial institutions that they cannot hide behind software systems and internal policies as an excuse to knowingly permit the financing of terrorism,” Elsner said.
In ruling for the families, the jury soundly rejected the argument, as defense attorney Stephens put it in closing arguments, that the bank has no obligation “to run around and figure out” who’s on a terror backlist.
“That’s what the government does,” Stephens had told the jury. “And you wouldn’t want it any other way.”
Tab Turner, another attorney for the families, countered that Arab Bank made $2 billion off terrorism in the year 2003 alone.
He said it served as “‘The Bank of the Stars’ in the world of terrorism.”
“This bank was the only bank making money off the terrorists,” the attorney said at closing arguments. “They’re not interested in truth. They’re interested in protecting their pocket book. That is the power that you have: to tell other banks, ‘Don’t you dare do business with these people. You do, and you will pay.’
“That’s how we stop terrorism. You don’t stop it with bullets. You don’t stop it with smart bombs. How you stop them is you take the money away from them.”
Turner had argued at the start of the trial that the bank turned a “blind eye” when it provided banking services for known Hamas leaders. Arab Bank served as “paymaster” when it made tens of millions of dollars in payments – mostly in American cash and funded by the Saudi Committee – to families of suicide attackers, the attorney argued.
But Stephens argued that the bank didn’t know who it was paying because their names did not appear on any U.S. or international blacklists. He said Arab Bank heeded those lists and blocked transactions and froze accounts whenever a match was made.
The verdict Monday came hours after the 2nd Circuit in Manhattan revived similar claims against another institution, National Westminster Bank.
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