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Middle Eastern customers of bank dropped

Some Mississippi residents with Middle Eastern backgrounds — including a university instructor and business owners — have  had their accounts closed without explanation, leaving them the lingering suspicion that it has something to do with their heritage.
/ Source: The Associated Press

After three years as an AmSouth Bank customer, Imad Aleithawe got a one-page form letter telling him his account had been closed.

The bank refuses to explain why, citing confidentiality and a broadly written customer agreement allowing accounts to be shut down at any time "for any reason."

Aleithawe, a civil engineer with the Mississippi state transportation department, says that without answers he is left with only the lingering suspicion that it has something to do with his Middle Eastern heritage.

At least three other Mississippi residents with Middle Eastern backgrounds — including a university instructor and business owners — have also had their accounts closed. Those affected say others with Middle Eastern ties have complained to them about closed accounts but were unwilling to go public.

AmSouth officials declined to talk about the Mississippi cases or if similar actions are being taken in other states served by the financial institution — Alabama, Georgia, Florida, Louisiana and Tennessee.

Bank denies ethnicity at issue
"It is standard practice in the industry not to disclose the reason for closing an account," said Rick Swagler, spokesman for the Birmingham, Ala.-based AmSouth. "Regulators require that banks analyze accounts on the basis of transactions and other activity, and in some cases that will result in accounts closing."

"When AmSouth closes an account, it does so in accordance with the law and for appropriate reasons," he said. "Any suggestion that an account was closed because of a customer's ethnicity is false."

But American Civil Liberties Union officials say the cases are hardly isolated. Nationally, the organization has received more than 1,000 discrimination complaints from people of Middle Eastern descent since the Sept. 11 attacks — and dozens of those complaints involved financial institutions.

"It's become increasingly difficult for average people, who just happen to be Muslim or Arab, to live everyday, normal lives," said Dalia Hashad, an advocate at the ACLU headquarters in New York. "You have people who are unable to do simple things like wire money, open a bank account, close a bank account, transfer funds."

Hashad said part of the problem is confusion over the flood of banking regulations that have been put into place as part of the federal Patriot Act.

In some cases, she said, people have completed the paperwork for a transaction and then been told by a bank that their money is being held in limbo "because we're not sure if you're a terrorist or not."

At least two of the individuals in Mississippi said they routinely sent cash in relatively small amounts to family members in the Middle East.

But the former AmSouth depositors say they wonder if the bank's recent reporting troubles have led to a broad approach in dealing with potential depositor problems.

In October, AmSouth was ordered to pay $40 million to the federal government in an agreement with prosecutors over its failure to report a money laundering scheme that bilked investors in four states. The bank was cited by the Financial Crimes Enforcement Network and the Federal Reserve for not filing accurate, complete and timely Suspicious Activity Reports.

"It's not right to take it out on the Middle East people. It's not our fault. It's their fault," said Suzi Fino, who said several of her AmSouth accounts were closed.

Fino and her husband, Emad Fino, received notice Sept. 8 that AmSouth would be closing up to seven of their business accounts and one personal account. The accounts were tied to clothing stores the couple own in Mississippi and Louisiana.

Mahmoud Nabulsi, an accounting instructor at his alma mater, Jackson State University, said AmSouth closed an account that he established to handle transactions on the auction Web site Ebay. He was selling Iraqi currency on the site, but said his business had been cleared by the Mississippi Department of Banking and the FBI after he gave them a client list for review.

Nabulsi also used his bank account to wire money to his brother in Jordan.

Aleithawe, a 45-year-old father of two, said he, too, would often use his AmSouth account to wire money to his brother in Jordan. He said he was told by a bank customer service representative that his account's wire transactions may be to blame for the account closure.

Fino said she contacted Chad Cargile, consumer banking manager for Mississippi and north Louisiana AmSouth banks. She said Cargile first said her accounts were fine but after a few days told her the accounts must be closed.

Fino said she asked Cargile if the action had anything to do with the fact that both she and her husband are of Middle Eastern descent. "He said 'It might,' " she said. "Then he said, 'Maybe that was one of the reasons.' "

Calls to Cargile by the Associated Press were referred to AmSouth spokesman Swagler.

John Byrne, director of American Banking Association's Center for Regulatory Compliance, said banks are not required do business with every person. With federal regulations governing the banks, Byrne said that decisions to close accounts are not made lightly.

While all are U.S. citizens, Aleithawe is from Iraq and the Finos and Nabulsi are from Jordan.

Aleithawe, the Finos and Nabulsi all say they are considering taking legal action if necessary to get answers about their account closures. The Mississippi ACLU is currently reviewing their cases.