Suit against UBS for aiding terrorism continues
Bankers and their counsel must continue to be concerned about potential liability for ignoring how their customers use funds. This is particularly critical for customers with connections to areas of the world with terrorism issues.
In a law suit pending in the U.S. District Court for the Eastern District of New York, Senior District Judge Charles Sifton has denied USB AG’s motion to dismiss a civil suit brought by the widow and children of Stuart Scott Goldberg, killed in a January 29, 2004 terrorist attack on a Jerusalem bus. UBS AG (“UBS”) is an international financial institution headquartered in Basel and Zurich, Switzerland, with offices in, among other locations, Israel and the United States.
The Goldberg family brought claims under the civil remedy provisions of the Anti-Terrorism Act (“ATA”), 18 U.S.C. § 2333(a) alleging that UBS is liable for:
- Aiding and abetting the murder or attempted murder of a United States citizen causing the commission or attempted commission of physical violence upon United States Citizens;
- Committing acts of international terrorism in violation;
- Collecting and transmitting funds on behalf of a terrorist organization
The plaintiffs are trying to hold UBS liable for its alleged role in facilitating the transfer of funds to the terrorist group, Hamas, which was allegedly responsible for the bombing. The complaint alleges that funds raised by Hamas for purportedly charitable purposes are in fact used to finance terrorist activities. Financing for Hamas is said to be principally procured through an extensive network of “charities”, one of which is the Association de Secours Palestinien (“ASP”), headquartered in Basel, Switzerland. According to the U.S. Treasury Department, ASP is the primary fundraiser for Hamas in Switzerland and on August 22, 2003 was placed on the Office of Foreign Assets Control list as a Specially Designated Global Terrorist (SDGT).
Despite this designation, UBS continued to provide services for ASP, including transferring money from ASP’s account to the account to a West Bank institution, the Tulkarem Zakat Committee which used those funds to facilitate the suicide bomber who is alleged to have detonated a bomb on Bus No. 19 in Jerusalem on January 29, 2004 killing 11 people and wounding 50 others.
In its motion to dismiss, UBS was successful in dismissing the first Count which only applied to U.S. citizens. Goldberg held dual Israeli and Canadian citizenship. All the other legal objections were denied by the judge.
An article by Kathianne Boniello in the New York Post reported that, while Chezi Goldberg was a Toronto native, he lived with his wife and children in Flatbush for a decade before moving to Israel in the 1980s. The deceased wrote a column in The Jewish Press on teen issues and had been slowly building his practice, his sister, Carrie Devorah, said.
