‘A way to thwart their funding’

‘A way to thwart their funding’

The late Steve Averbach, an Israeli immigrant from New Jersey, who was paralyzed in a 2003 bombing attack aboard a Jerusalem bus. Courtesy Averbach family

On May 18, 2003, Steve Averbach boarded a Jerusalem commuter bus and noticed an Arab man aboard dressed like a haredi Jew. When Mr. Averbach, an Israeli immigrant from West Long Branch, approached, the man detonated his explosives, killing seven people and wounding 20, including Mr. Averbach.

Hamas claimed responsibility for the bombing. Mr. Averbach, left paralyzed from the neck down, was hailed as a hero for scaring the bomber into prematurely detonating his suicide vest and reducing the death toll.

Eleven years later, the Averbach family is taking part in a massive lawsuit against Jordan-based Arab Bank, alleging that the bank facilitated fundraising for Hamas and other terror groups, as well as payments to dead terrorists’ families, and thus bears responsibility for Hamas terrorism. The case is set for an August 11 trial in federal court in Brooklyn.

The lawsuit now includes approximately 100 families of American terror victims, about half of whom are represented by four law firms referred to in court records as Linde counsel, after the lead plaintiffs’ family. John Linde Jr. was a U.S. citizen working as a security contractor for the U.S. embassy in Tel Aviv who was escorting a diplomatic convoy in the Gaza Strip that was scheduled to interview Palestinian applicants for Fulbright scholarships. He and two other members of the security detail were killed by a remote-controlled bomb in Gaza on October 15, 2003. His widow and parents initially filed the suit in 2004 against Arab Bank under the U.S. Anti-Terrorism Act, which grants U.S. citizens legal recourse against those who knowingly provide material support to foreign terror organizations.

The plaintiffs charge that Arab Bank, which has branches across the globe, including New York, provided financial services to Hamas leaders and senior operatives. According to court documents, programs such as the Saudi Committee in Support of the Intifada al Quds allegedly used Arab Bank to transfer payments to families of so-called martyrs, including suicide bombers, prisoners, and those wounded in the second intifada. Arab Bank allegedly processed millions of dollars on behalf of the Hamas global funding network, and facilitated an Iranian funding program through a Hezbollah charity in Lebanon called the Shahid Foundation.

Created in October 2000, the Saudi Committee allegedly provided millions of dollars to the families of these so-called martyrs, including over $42 million in November 2001 alone, according to court documents. Arab Bank allegedly maintained lists of beneficiaries to whom it was to distribute the funds.

“We allege that this was a key channel to provide a form of indemnification to Palestinian terrorists and would-be terrorists who would be incentivized by knowing that their families would be financially cared for if they were killed, injured or imprisoned as a result of their violent activities,” said Gary Osen of Hackensack’s Osen LLC, the Averbach’s attorney, who is also representing about 235 other victims in the case.

Arab Bank denies liability, saying it had no intent to fund terrorism and lacked knowledge that the funds would be used for that purpose.

In 2005, Shukri Bishara, then Arab Bank’s chief banking officer, told the Wall Street Journal that while the bank acknowledged $20 million worth of specific transactions to or from suspected terrorists or groups, it denied knowledge of any organized funding program for terrorism. “We find suicide bombing an abominable human act,” he told the paper.

In a statement sent to this paper this week, Arab Bank argued that it “did not cause or provide material support for the acts of terrorism involved in this case.

“Arab Bank has great sympathy for all victims of terrorism but is not liable for the tragic acts described by Plaintiffs,” the statement read. “This case raises very important issues not only for Arab Bank and the plaintiffs, but also for the international finance system, which processes trillions of dollars in transfers each day. Plaintiffs argue banks should be liable for the millions of routine, automated transactions that they process even when proper compliance requirements are followed and the parties were in good standing at the time. Plaintiffs’ theory, if adopted by the Court, would undermine the automated compliance systems that regulators around the world require banks to employ, and create vast uncertainty and risk in the international finance system.”

The trial will begin by focusing on 24 Hamas attacks, as Hamas is responsible for about 60 percent of the attacks listed in the suit. (Other attacks cited in the suit are credited to Palestinian Islamic Jihad, the Popular Front for the Liberation of Palestine-General Command, Al Aqsa Martyrs Brigades, and other terror groups.) Hamas is not itself defendant in the case, but a liability verdict would likely have a strong impact on the organization since it might make other banks think twice before transfering money into Gaza.

“There are only a limited number of financial institutions that operate in the Palestinian territories,” Mr. Osen said. “It’s one thing to move a million dollars through a courier through a tunnel. The kind of money needed to run a proto-government can only be done through formal banking channels.”

Arab Bank, for example, facilitates salary distribution for the Palestinian Authority. Since Hamas and Fatah signed a reconciliation agreement in April, the PA has refused to pay the salaries of Hamas’ civil servants in Gaza. Qatar recently offered to provide several million dollars to pay those salaries, but pressure from the United States blocked the transfer and Arab Bank refused to process the funds.

“We’ll actually have a trial and the public will hopefully gain a unique insight into how terrorist organizations like Hamas are funded and the mechanisms by which they create this larger culture of martyrdom that has taken hold in so much of the Middle East,” Mr. Osen said.

The August trial is to determine the bank’s liability. If Arab Bank is found liable for the terror attacks, then the judge will task another jury to assess the individual damages to the plaintiffs. The plaintiffs are not seeking a specific amount of damages, which would be determined by the court, Mr. Osen said.

A declaration of liability would hopefully create a deterrent for other financial institutions, he said.

Looking for accountability

After the Hamas attack left him paralyzed, Mr. Averbach became a voice for terror victims, speaking out in Israel and in the United States, including at events sponsored by the Jewish Federation of Northern New Jersey. After years of moving in and out of rehab facilities and speaking about his experiences, Mr. Averbach died in 2010.

“His revenge was demonstrating that, although physically paralyzed, Hamas would never succeed in extinguishing his spirit,” said his sister, Eileen Sapadin, a Bergen County resident. “His life was filled with purpose and our collective resolve was strengthened.”

For Ms. Sapadin, no amount of money can return what was taken from her, but “perhaps the monetary rewards for the so-called martyrs’ families will cease and the funding for all of the murder will end once and for all,” she said.

Mr. Osen was contacted by a family friend of Mr. Averbach after he was injured. The Anti-Terrorism Act, passed in the aftermath of the 1985 murder of Leon Klinghoffer, opened the door for victims of September 11 and other terror attacks to seek legal retribution against private organizations and individuals that sponsor terrorism.

“I’m hoping it will hit them hard on some level, hold them accountable for aiding terrorism, and I’m hoping that it’ll deter banks and commercial entities from funding cash for these martyrs’ families,” Ms. Sapadin said. “There’s no restitution that’s going to bring back any lives or cure injuries of victims really, but I’d like to see it brought down. Whatever secrecy there’s been about this, I’d like brought to the public.”

According to Ms. Sapadin, the bank has not reached out to her or other victims to offer an explanation of its involvement or condolences.

It has been a long journey to the trial. Since the inception of the lawsuit, Arab Bank refused to turn over records from its branches overseas, claiming that doing so would violate foreign bank privacy laws. In 2010, a U.S. district judge rejected Arab Bank’s position and ordered it to disclose the records, as well as ordering various remedial measures to deal with the withholding of evidence. That decision was affirmed by the Second Circuit Court of Appeals and then proceeded up the ladder until the Supreme Court refused to hear the case in June, clearing the way for the Linde case to go to trial.

The plaintiffs were told early on that their case could take years to resolve, and Ms. Sapadin didn’t expect to be in court any earlier. That the trial date was finally scheduled when Israel is at war with Hamas is incredible, she said. While Israel seeks to destroy Hamas’ physical infrastructure, this lawsuit provides victims of Hamas with the opportunity to strike at its pocketbooks.

“There is some satisfaction in knowing that there’s a way to thwart their funding,” she said.

Following the money

Tracking terrorists’ financing is a subject Stephen Flatow of West Orange is all too familiar with. His daughter, Alisa, was murdered in a 1995 Palestinian Islamic Jihad attack on a public bus, and ever since he has been fighting a legal battle against Iran for sponsoring the attack. Mr. Flatow’s case opened the doors for terror victims looking for legal retribution, and he believes the fact that the case against Arab Bank is a civil case against a corporate entity – as opposed to his litigation against the nation Iran – makes the case easier and harder at the same time.

“Here it’s victim against bank. There should be no involvement by the American government in this type of case,” he said. The U.S. Department of Justice at the time intervened on behalf of Iran in Mr. Flatow’s litigation, in the interest of maintaining the principal of sovereign immunity.

Arline Duker of Teaneck also brought Iran to trial, holding the country ultimately responsible for the 1996 death of her daughter Sara in a Hamas bus bombing. The Flatow and Duker cases were brought against Iran under the Foreign Sovereign Immunities Act, and both families continue trying to collect on Iranian assets in the United States. While Iran’s sponsorship of Hamas and Islamic Jihad is based on ideology, Arab Bank is a business with a bottom line. A liability verdict could force the bank to re-examine its risk-management strategy, according to Mr. Osen.

“The message to institutions from this type of case is you are culpable when someone is killed because of your commercial activities,” Mr. Flatow said. “If we cut off the terror funding by making it difficult for a bank, then they’re going to be watching more closely where the money comes from and where it goes.”

Ms. Sapadin offers words of solidarity to other victims of terror, .

“We are in this journey together in a way that most people cannot fully understand,” she said. “It starts with utter destruction, disbelief, denial, and despair, but eventually moves us to a place of Godliness. This realm is beyond nature when we realize that our loved ones’ sacrifice was for others – for our entire nation. We help one another to feel more, to give more, and to pray more. Please realize that what happened to you was not in vain. Human beings care deeply for one another in our religion. We connect and unite and prove that we are one.”

An injured girl is evacuated from the scene of a Palestinian suicide bombing at the Sbarro restaurant in Jerusalem August 9, 2001. The liability of Arab Bank for this and 23 other Hamas attacks is up for trial in Brooklyn. Photo by Flash90
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