Ten years ago, Ron Motley, co-founder of the Mount Pleasant-based Motley Rice law firm, filed a lawsuit alleging that a large Middle Eastern bank with branches in the United States was in cahoots with terrorists.
Motley died late last summer, about a year before the case against Arab Bank went to trial. But he would have been pleased with the verdict.
A federal jury in Brooklyn concluded on Sept. 22 that Arab Bank is liable to a group of Americans who were injured in terrorist attacks carried out by Hamas in Israel and the Palestinian Territories. Jurors found that the bank funneled money to leaders of the terrorist group and the families of suicide bombers.
The verdict marks the first case in which a jury has held a bank liable for financing terrorism, said Michael Elsner, an anti-terrorism and human rights lawyer at Motley Rice who worked on the case with law partner Joe Rice. He added that more new territory lies ahead as the case transitions to the damages phase.
“I don’t know that there have been any cases like this where juries have sat down and calculated recoveries,” he said. “It will be a very emotional and horrific damages trial.”
An attorney for the bank, Shand Stephens of DLA Piper in New York, did not respond to an interview request.
In a news release, Arab Bank stated that the verdict followed what was “nothing more than a show trial” and took issue with U.S. District Court Judge Brian Cogan’s decision to sanction the bank for refusing to comply with the plaintiffs’ discovery requests for information on accounts believed to be connected with Hamas.
“It’s difficult to prove that an account was held by Hamas if the bank refuses to hand over its records on the grounds that in Lebanon bank secrecy rules prevent disclosure of account information, even for terrorists,” Elsner said.
But he said the plaintiffs legal team was able to trace more than $70 million, most of which came from the New York branch of Arab Bank, that was funneled to Hamas operatives and leaders in the span of about four years.
“We were able to tie that together through other public sources and information, giving the jury enough to find that the bank did provide these accounts,” he added. “It’s a pretty staggering amount of money, and that’s just what we know from what we were able to collect. I’m sure the numbers are much higher. How much higher we’ll never know.”
Under the sanctions, the bank was unable to raise defenses that could be refuted by the documents it declined to share with the plaintiffs. The bank complained that it was kept from showing the jury evidence that would have proven that it “complied with applicable laws and regulations in each of the jurisdictions where it operates as a responsible and law-abiding institution.”
The bank also said that the “decision, if it stands, exposes the banking industry to enormous liability for nothing other than the processing of routine transactions and the provision of conventional account services,” adding that it has “very strong grounds for an appeal” and “will ultimately prevail in this case.”
According to Elsner, the bank was required to maintain more than $490 million in assets in the U.S. He said the money wouldn’t cover the plaintiffs’ damages, “but it would be a start.”
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