Arab Bank Sanctioned by Judge for Withholding Records in Terrorism Suits

Arab Bank Plc, accused in lawsuits by U.S. victims of terrorist attacks in Israel of administering payments to Palestinian suicide bombers’ families, was sanctioned by a judge for failing to turn over documents.

U.S. District Judge Nina Gershon in Brooklyn, New York, said in a ruling yesterday that she will instruct jurors they may infer that Jordan-based Arab Bank provided financial services to groups designated as terrorist organizations by the U.S. and that it processed payments on behalf of a group called the Saudi Committee for the Support of the Intifada Al Quds.

“I am satisfied that plaintiffs have shown the high likelihood that the withheld documents would show repeated transfers by the bank to terrorists, terrorist organizations, or their fronts, or on their behalf,” Gershon wrote.

The plaintiffs claim that Arab Bank handled death benefits of $5,300 each from the Saudi Committee to the families of suicide bombers. The plaintiffs claim that by providing the financial services, the bank aided and abetted the attacks in which they were wounded and members of their families were killed.

“In compliance with the New York court’s orders in this litigation, Arab Bank has produced hundreds of thousands of documents and successfully sought waivers from bank secrecy laws in several countries where it operates,” the bank said in a statement e-mailed by spokesman Robert Chlopak. “Where the bank was unable to obtain such waivers from the appropriate authorities in certain countries, it elected not to violate these laws. The Bank’s actions were taken in good faith.”

The lead case is Linde v. Arab Bank Plc, 04-cv-02799, U.S. District Court, Eastern District of New York (Brooklyn).

To contact the reporter on this story: Thom Weidlich in New York at tweidlich@bloomberg.net

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