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Vets, family members sue banks, say money processed used for terror

NEW YORK — Wounded American veterans and family members of soldiers killed in Iraq sued five European banks on Monday, seeking to hold them responsible for shootings and roadside bombings because they allegedly processed Iranian money that paid for the attacks.

The lawsuit filed in U.S. District Court in Brooklyn named Barclays, Credit Suisse Group, HSBC Holdings, Royal Bank of Scotland Group and Standard Chartered.

Barclays, Credit Suisse, RBS and Standard Chartered declined to comment. HSBC did not respond to requests for comment.

The lawsuit was brought under the U.S. Anti-Terrorism Act, a 1992 law that permits victims to bring private suits against alleged financiers of terrorist operations.

The lawsuit alleges the banks conspired with Iranian banks to mask wire transactions in order to evade U.S. sanctions. The Iranian banks then funneled more than $100 million to terrorist groups that operated in Iraq at Iran’s direction, according to the suit.

The groups included a Shiite militia in Iraq, Kataib Hezbollah, as well as Quds Force, the overseas arm of Iran’s Islamic Revolutionary Guard Corps, the suit says.

Since 2009, the five banks have agreed to pay about $3.2 billion to the United States government to resolve allegations they handled money in violation of sanctions against nations such as Iran, Libya and Cuba. The banks signed deferred prosecution agreements with the Justice Department in addition to settlements with American banking regulators.

The agreements did not allege a link between the transactions, which the government viewed as unlawful, and terrorist operations.

The case has major obstacles, said Jimmy Gurule, a University of Notre Dame law professor. The Anti-Terrorism Act does not specifically permit conspiracy claims, and federal courts in New York have refused to permit cases to proceed unless they allege a direct link between banks and terrorist attacks.

The law bars claims for wartime injuries.


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