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USA TODAY – February 8, 2005
Arab Bank retreats from U.S. market
By Elliot Blair Smith
Under investigation on suspicion of money laundering by U.S. banking authorities, Arab Bank plans to curtail operations at its New York office and gradually withdraw from the U.S. market, according to a statement issued Tuesday by its chief regulator, Jordan's central bank.
Arab Bank's retreat comes under growing pressure from civil lawsuits and regulatory investigations as an alleged terror-funding conduit. A major Middle Eastern bank with $32 billion in assets and offices in 30 countries, the institution has $425 million in assets at its lone U.S. office on Madison Avenue.
The Treasury Department's Office of the Comptroller of the Currency is investigating concerns the bank acted as a fence for the Hamas terror group in Israel, the West Bank and Gaza by forwarding charitable funds raised here for suicide bombings and terror attacks abroad. Civil lawsuits against the bank accuse it of paying death benefits to at least 200 Israelis.
Last July, a federal grand jury in Dallas indicted one of Arab Bank's clients, the Islamic charity Holy Land Foundation for Relief and Development, alleging that the foundation and seven principals disbursed $36 million raised from Islamic charities in the USA from 1992 to 2001, in part to finance terror attacks in Israel.
Without mentioning the bank, the grand jury indictment cited evidence that terror financiers avoided law enforcement scrutiny "by masquerading their operations under the cloak of charitable exercise."
Based in Jordan, Arab Bank declined to comment on the terror funding allegations against it or the report by that country's central bank that it was bowing out of the U.S. market due to operating pressures here.
It previously has denied wrongdoing. In November, Chief Banking Officer Shukry Bishara filed a declaration in federal court in New York, where the bank faces several civil lawsuits, denying the "false claims."
Bishara said the bank "is at the forefront of preventing money laundering and terrorist financing." However, he also expressed pride that the bank is the leading financial institution in the Palestinian National Authority's territories, where Hamas freely operates….
http://www.usatoday.com/money/industries/banking/2005-02-08-arab-bank-usat_x.htm
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