New York Court: Bank Account Basis for Lawsuit against Lebanese Bank
New York's highest court ruled Tuesday that a Lebanese bank's use of a New York account for multimillion-dollar wire transfers establishes the basis for a lawsuit in the U.S. by Israeli "victims" of Hizbullah's rocket attacks in the 2006 war.
The lawsuit was filed by American, Canadian and Israeli citizens who live in northern Israel. It claims that Lebanese Canadian Bank supported terrorism by handling international financial transactions of the Hizbullah affiliate Shahid Foundation. The lawsuit says the money was moved through an account at American Express Bank in New York.
A federal judge in 2010 dismissed the lawsuit against the now-defunct bank that was headquartered in Beirut, citing lack of jurisdiction.
On appeal, the state Court of Appeals was asked to determine if there is a basis for the claims under New York's civil statutes.
"Repeated use of the correspondent account shows not only transaction of business, but an articulable nexus or substantial relationship between the transaction and the alleged breaches of statutory duties," Judge Susan Read wrote. The court's other five judges agreed.
"While it may be that LCB could have routed the dollar transactions on behalf of Shahid elsewhere, the fact that LCB used a New York account 'dozens' of times indicates desirability and lack of coincidence," the judge wrote. "Presumably, using the AmEx account was cheaper and easier for LCB than other options, and whatever financial and other benefits LCB enjoyed as a result allowed the bank to retain Shahid as a customer and to support its allegedly terrorist activities and programs."
Attorney Robert Tolchin said the case now returns to the U.S. 2nd Circuit Court of Appeals.
"The big picture we're trying to accomplish, and in other cases like it, is to make it harder and harder for terrorist groups to obtain weapons such as rockets," Tolchin said. They had a claim against American Express which was dismissed on separate grounds, he said.
With New York the center for currency transactions into dollars, Tuesday's decision "really opens up American jurisdiction for banks that think they're hiding in lawless countries and they can continue and support the terrorism," said Nitsana Darshan-Leitner, director of the Israel Law Center.
In 2011, the U.S. Treasury Department and Drug Enforcement Administration said Lebanese Canadian Bank was designated a "primary money laundering concern" under federal law for allegedly helping a Lebanese-based drug trafficking organization launder as much as $200 million a month in drug profits.
The Lebanese subsidiary of Societe Generale (SGBL) acquired the assets of LCB last year.
Source: Associated Press
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