The US Justice Department is investigating one of the Middle East's biggest banks over its role in alleged terrorist funding between wealthy Saudi Arabians and Palestinian groups, the Los Angeles Times reported yesterday.
The inquiry has found that the Jordan-based Arab Bank has channeled tens of millions of dollars from the Kingdom to Palestinian groups that allegedly used some of the money to pay off suicide bombers and their survivors.
Arab Bank has denied the allegations, stating that they have a mediating role between the banks of Saudi donors and Palestinians being compensated for injuries or imprisonment in the Israeli-Palestinian conflict.
"Arab Bank had reason to believe these were humanitarian payments or social welfare payments, and there was certainly nothing in any of the public information that suggested to the bank at the time that these were in any way [meant] to induce terrorism or reward terrorism," said Washington-based Arab Bank spokesman Robert Chlopak in the LA Times.
Chlopak also said the bank had checked out clients and transactions, had not processed any payments to individuals or organisations that were designated as terrorist, and mainly transferred funds sent to it from other banks on behalf of legitimate Saudi donors that have not been linked to terrorist activities.
However Americans and Israelis injured in terrorist attacks claim the bank took part in compensating the families of "martyrs" or suicide bombers and in funding Hamas and Islamic Jihad, and are filing lawsuits against Arab Bank in New York, according to the report.
In 2005, it was discovered that the bank's New York branch had transferred money for groups that were later identified as terrorist groups by the US. The bank paid the US government US$24 million in fines for violating terrorist financing prevention laws.
To win their current case, the plaintiffs' lawyers would have to prove that Arab Bank knew that it was doing business with terrorist individuals or entities.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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