The Jordan-based bank is accused of providing financial services to Hamas by almost 300 US citizens who were the victims or family members of victims of 24 attacks the Islamic militant group allegedly carried out in Israel and the Palestinian territories between 2001 and 2004.
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Shand Stephens, a lawyer for the bank, said most people and organizations the plaintiffs claim were affiliated with Hamas who received banking services from Arab Bank were not designated as terrorists during the period in question.
"The bank does not figure out who the criminals are," Stephens said in Brooklyn federal court. "The government is supposed to designate people, and the banks react."
In a lawsuit filed in 2004, plaintiffs accused the bank of violating the US Anti-Terrorism Act, which allows victims of US-designated foreign terrorist organizations to seek compensation.
Arab Bank, one of the Middle East's oldest financial institutions, has denied the charges. It contends it provided routine banking services in compliance with counterterrorism laws and never intended to support Hamas, which the US State Department designated a terrorist organization in 1997.
The case, described by a lawyer for the plaintiffs as the first civil court terrorism-financing case against a bank to go to trial in the United States, comes at a time when US regulators have increased scrutiny of international banks' cross-border transactions.
Lawyers for the plaintiffs, who say the bank could be liable for millions of dollars, are expected to deliver their closing arguments this afternoon. In opening statements last month, they said the bank served as the "paymaster" of funds supporting Hamas.
The case is Linde et al. v. Arab Bank, US District Court for the Eastern District of New York, No. 04-2799