As Arab Bank Jury Deliberates,|a Similar Brooklyn Case Is Revived

     MANHATTAN (CN) – A Brooklyn man injured in a 2003 Jerusalem suicide bombing may show that National Westminster Bank knowingly supported the bogus charity that funded such Hamas-sponsored attacks, the 2nd Circuit ruled Monday.
     The decision comes as the international banking community awaits a federal jury’s decision after a six-week landmark trial in Brooklyn on claims that Arab Bank provided banking services for known Hamas leaders and paid out families of suicide attackers.
     Tzvi Weiss and his family had also filed his unrelated case, which the 2nd Circuit revived today, in Brooklyn nearly a decade ago. Another 200 Americans injured by attacks in Israel during the Second Intifada between 2000 and 2004 joined the Weiss family’s complaint against National Westminster Bank, alleging that the bank knowingly provided material support to Interpal, a purported “charity” that funded Hamas-sponsored suicide attacks in Israel in the early 2000s.
     Weiss was a 20-year-old rabbinical college student in Jerusalem, on his way to a friend’s wedding in August 2003, when a Hamas suicide bomber blew himself up on a city bus. After escaping through a bus window, Weiss allegedly got away by “stumbling over dead bodies and body parts.”
     The complaint seeks damages under the Anti-Terrorism Act, a law that President Bill Clinton signed a decade earlier for Americans injured in acts of international terrorism. U.S. District Judge Dora Irizarry dismissed his lawsuit, but the 2nd Circuit reversed Monday after finding that she had incorrectly focused on whether NatWest knew that Interpal funded terrorist activities.
     There is a “triable issue of fact as to whether defendant possessed the mental state required for liability” under the law, according to the ruling.
     “We conclude that the statute’s requirement is less exacting, and requires only a showing that NatWest had knowledge that, or exhibited deliberate indifference to whether, Interpal provided material support to a terrorist organization irrespective of whether Interpal’s support aided terrorist activities of the terrorist organization,” Judge Pierre Leval wrote for a three-member panel (emphasis in original).
     Because the United States designated Hamas as a terrorist organization in 1997, “plaintiffs can fulfill this burden by demonstrating either that NatWest had actual knowledge that Interpal provided material support to Hamas, or that NatWest exhibited deliberate indifference to whether Interpal provided material support Hamas,” the ruling continues.
     Interpal is a nonprofit registered with the Charity Commission for England & Wales, which purports to collect money for humanitarian aid and distributes its money to various “charitable” organizations in England and Wales, Jordan, Lebanon and the Palestinian Territories between 1994 and 2007.
     It provided banking services to Interpal’s predecessor, the Palestine & Lebanon Relief Fund as early as 1987, Leval said.
     After finding that Interpal had posed as a charity “utilized to hide the flow of money to Hamas,” the United States designated it a terrorist group in 2003.
     The international banking community relies on the list maintained by the U.S. Treasury Department Office of Foreign Assets Control (OFAC) to ensure that customers’ names are not blacklisted as terrorists.
     Interpal’s listing led banks to freeze its accounts, but the Charity Commission of England ordered the accounts unfrozen on Sept. 24, 2003, after its investigation cleared Interpal of any allegations of terror financing.
     The Metropolitan Police special Branch also investigated OFAC’s designation and “found that there was insufficient evidence to prove a link [of Interpal] to terrorism, so no UK action was taken against Interpal,” Leval noted.
     Though the Bank of England informed NatWest that there “is no need to take any further action,” NatWest had by May 2005 uncovered a payment that the “charity” made to a group later designated by the Bank of England as being “suspected of supporting terrorism,” Leval wrote.
     The review also discovered that some of the groups receiving money from the bank were suspected of having links with Hamas.
     Leval emphasized that “there is no evidence NatWest was aware of any Interpal payments to any organizations that were designated as terrorist organizations by the Bank of England or OFAC at the time of the payment.”
     NatWest closed the last Interpal account in March 2007.
     In reviving claims against NatWest on Monday, the 2nd Circuit found that Judge Irizarry had used the wrong “scienter standard.”
     The plaintiffs had to show only that NatWest had knowledge that, or was deliberately indifferent to whether Interpal provided material support to a terrorist group “irrespective of whether the support aided terrorist activities,” according to the ruling.
     Irizarry “imposed on plaintiffs a more onerous burden with respect to NatWest’s scienter” than the law requires, Leval said. Irizarry “focused on NatWest’s employees’ knowledge of Interpal’s terror financing as opposed to their knowledge of Interpal’s financing of a terrorist organization.” (Emphasis in original.)
     Leval emphasized Irizarry’s reasoning that “there is no evidence to suggest that, had NatWest known or actually suspected Interpal of terror financing, it would have done anything other than close its accounts.”
     For the appellate court, however, “the focus on ‘terror financing,’ as opposed to the financing of a terrorist organization, regardless of the character of the activities being financed, is not consistent with the test of [the law]” or the Supreme Court’s interpretation of it.
     The plaintiffs may also show that Congress intended for extraterritorial application of the ATA.
     NatWest knew of OFAC’s designation of Interpal in August 2003, and the bank’s head of terrorism-related matters sent out an email in December 2004 stating: “We are aware that we had accounts for people connected to Hamas, but not Hamas itself.”
     Leval also noted that the head of NatWest’s office responsible for reviewing suspicious activities and reporting suspected terror financing to British authorities testified that the bank would stop doing business with a customer only if there was “absolute certainty that the customer was engaged in any kind of illegal activity.”
     He also testified that he would not recommend severing the bank’s relationship with a customer suspected of financing terrorism unless the customer was convicted.
     Biannual reviews of Interpal’s accounts revealed to NatWest in December 2004 that the charity had made payments to groups suspected of “being connected with terrorism, in particular Hamas,” specifically at least five committees that the U.S. had said were operating under Hamas’ control.
     NatWest’s May 2005 discovery – that Interpal had made a payment to an organization that the Bank of England designated as a group suspected of supporting terrorism in June 2005 – “was sufficient to create a triable issue of fact as to whether NatWest’s knowledge and behavior in response satisfied the statutory scienter requirements,” Leval wrote.

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