Arab Bank to End U.S. Operations, Faces Overwhelming Evidence New York Branch Funds Mid-East Terrorism

Prominent Law Firms Vow to Pursue Bank Despite Closure

Feb 08, 2005, 00:00 ET from Motley Rice LLC

    NEW YORK, Feb. 8 /PRNewswire/ -- Faced with a U.S. regulatory
 investigation and a series of lawsuits brought by families of American and
 Israeli victims of Palestinian terrorism, Arab Bank PLC, one of the largest
 financial institutions in the Middle East, today announced plans to
 "gradually" close its New York branch and end its American operations.
 Lawyers for the American and Israeli victims of Palestinian terrorism today
 promised to pursue the bank despite its planned closure of its New York
     "They can run, but they can't hide," said Ron Motley, lead litigation
 counsel to the Israeli victims.
     "Every major international bank needs a presence in New York," said Gary
 M. Osen, one of the attorneys who filed the first civil case against Arab Bank
 and who today represents the families of more than 40 American victims of
 recent attacks during the Palestinian Intifada. "For Arab Bank to decide to
 abandon the largest financial market in the world is very telling."
     Arab Bank claims that the "operational environment in the United States is
 not in line with the financial institution's strategy." Lawyers for the
 victims suggest that the Arab Bank is seeking to avoid U.S. laws and
 regulations implicated by Arab Bank's systematic provision of financial
 services to the families of Palestinian terrorists and front organizations for
 Hamas and other terrorist groups.
     Motley and Osen said they would take immediate steps to prevent Arab Bank
 from removing assets and documents from the United States.
     According to the Wall Street Journal, Arab Bank is under investigation by
 U.S. authorities for failing to report suspicious transactions destined for
 the Middle East. According to the civil suits, Arab Bank, through its Madison
 Avenue branch in Manhattan, has channeled large sums of money to terror front
 groups and the families of Palestinian suicide bombers. The money transfers
 violate American anti-terrorism laws, according to the lawsuits that are
 pending in the U.S. Federal Court for the Eastern District of New York.
     "Whether it retains a branch in the United States or not, Arab Bank
 remains both legally and morally responsible for its actions. Payments to the
 families of suicide bombers constitute a vital part of terrorism's economic
 infrastructure," said former National Security Council official Lee Wolosky.
     With $32 billion in assets and operations in 30 countries, Arab Bank is
 among the largest in the Middle East and is the preeminent bank in the West
 Bank and Gaza. Last year it reported net profits of more than $303 million.
     Among other things, the Arab Bank launders Saudi payments to charitable
 fronts for Palestinian terrorist groups and the families of so-called
 "martyrs" by converting them into dollars at its Madison Avenue branch, the
 lawsuits allege. The funds are then re-routed to local branches of Arab Bank
 in the West Bank and Gaza Strip and paid out for distribution to the families
 of terrorists and Hamas and Palestinian Islamic Jihad front organizations,
 according to the lawsuits.
     "We are heartened by published reports that the U.S. Government intends to
 take action and have every confidence that the United States will protect the
 interests of the many American families victimized by Palestinian terrorism,"
 said Osen.
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