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August 15, 2008
Still awaiting response
No news yet from Lebanese-Canadian Bank.
EVA COHEN
Four Israeli victims of Katyusha rockets in the 2006 Lebanon war who opened a case against the Lebanese-Canadian Bank (LCB) in Montreal a month ago are still awaiting a response from the bank.
The plaintiffs, all of whom were injured in northern Israel in Katyusha rocket attacks, allege that LCB unlawfully provided financial services to Hezbollah by allowing charity groups affiliated with the terrorist organization to transfer funds prior to and during the bombing of Israeli cities in 2006.
The LCB has not returned phone calls from the Jewish Independent and has only produced a release on its website saying that it does not support terrorist actions. The bank has not yet chosen a defence.
The plaintiffs are Sara Yefet, Shoshana Sapir and Rochelle and Oz Shalmani of Israel and they are represented by Jeffrey Boro of Montreal, Ed Morgan of the University of Toronto's International Law and Counter-Terrorism Project and Nitsana Darshan-Leitner of Israel.
Specifically, the lawsuit contends that, since 2004, the LCB permitted the Yousser Company for Finance and Investment and the Martyrs Foundation to open and maintain accounts at LCB, to freely transfer millions of dollars of Hezbollah funds and to carry out millions of dollars in financial transactions, within and without Lebanon, by means of wire transfers, letters of credit, checks and credit cards provided by LCB. The case further contends that LCB's management, officers and employees had full knowledge that Yousser and Martyrs are part of Hezbollah's financial arm and that the financial services were being provided to a terrorist organization. Yousser and Martyrs are listed by the United States' Treasury and State Departments of Homeland Security as terrorist organizations and are outlawed in that country.
The only response from the LCB has been to deny its knowing involvement in transferring terrorist directed funds. In a policy statement on its website, the LCB claims the following:
"Lebanese-Canadian Bank may be used unwittingly as intermediaries in a process to conceal the true source of funds that were originally derived from criminal activity. This is referred to as money laundering. Even unintentional involvement in any criminal activity is of a great concern to the Lebanese-Canadian Bank, Sal [LCB] management and shareholders, since the public's confidence in the institution may be undermined through such activity."
The statement goes on to say that the purpose of it being published is intended to "guard against Lebanese-Canadian Bank, Sal's unintentional involvement in any criminal activity, and to restate the bank's policy of co-operation with law enforcement and regulatory agencies."
In addition, the statement says the bank "will exercise reasonable steps to determine the true identity of all customers and beneficial owners of Lebanese-Canadian Bank, Sal products and services. [It s]hall not knowingly accept funds from, make loans to or do any type of business ... when Lebanese-Canadian Bank, Sal becomes aware of facts which lead to a reasonable presumption that funds held by it are from criminal or other money laundering activity or that transactions entered into are themselves criminal in purpose...."
Despite such a policy, attorney Darshan-Leitner said there has been no response from the bank to the case and it is looking as though it will need to apply for an extension to find a defence.
The case is being presented as a civil action in the Quebec Superior Court and Darshan-Leitner said it is precedent setting. "Not only is this the first case of its kind filed in Canada, it is the first case filed against an organization involved with Hezbollah," said Darshan-Leitner.
Earlier this year, also represented in part by Darshan-Leitner, American victims of Hezbollah attacks in 2006 opened a case against Switzerland's UBS AG, with a branch in Washington, D.C. A U.S. Federal Reserve investigation determined that UBS was responsible for illegally transferring $4 billion to $5 billion to states designated by the United States as terrorist sponsors. However, that lawsuit, although connected with the 2006 war, was not specifically targeted at Hezbollah.
Darshan-Leitner said the plaintiffs are seeking monetary damages and, in addition, they are trying to send a warning to correspondent banks in other countries that they will be just as responsible as local banks for what parties use their banking services. In particular, said Darshan-Leitner, Lebanese banks must take proper steps to be terror free, otherwise they could face having to pay a lot of money to terror victims.
Eva Cohen is a freelance writer.
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