U.S. officials tell NBC News that U.S. banking regulators have uncovered evidence that a prominent Middle Eastern bank with a branch in New York City, Arab Bank PLC, has had dozens of suspected terrorists as its customers. The customers, allegedly associated with terror groups including al-Qaida, Hamas and Hezbollah, are responsible for hundreds of transactions at the Arab Bank, according to the officials.
The U.S. officials also tell NBC News that the U.S. bank regulator, the Office of the Comptroller of the Currency (OCC), has now referred the Arab Bank case to the Justice Department's terror-financing section for potential prosecution. A Justice Department spokesman would not comment.
The OCC matched the names of suspected terrorists against lists of Arab Bank customers, as well as others who sent or received wire transfers through the bank, and got hundreds of hits, the U.S. officials say.
After completing its investigation, which started last summer, the OCC forced the bank to shutter most of its operations here in the United States -- forbidding the Arab Bank from taking deposits or transferring money through its New York City (Madison Avenue) branch.
The OCC announced that extraordinary action in February, but did not publicly reveal the basis for its findings.
Officials speaking on behalf of the Arab Bank tell NBC News that the bank has never knowingly moved money to, or done any business with, terrorists. The same officials say that OCC regulations prohibit them from discussing the specifics of the case. They point out that the bank does billions of dollars of business a year, and that it is extremely difficult to determine the true identity of customers and others who wire funds through the bank.
Most importantly, the officials say, the Arab Bank has never done business with anyone who at the time was officially designated a terrorist by the U.S. government. With regard to the criminal referral to the Justice Department, a spokesman for the Arab Bank had no comment.
A spokesman for the OCC would not comment on the allegations, describing the Arab Bank matter as an "open-enforcement case." But he added: "There were issues about the completeness and accuracy of information given to us, and materials provided to us, by the Arab Bank."
An Arab Bank spokesman denies that and tells NBC News that Arab Bank has fully cooperated with the OCC.
-- By Adam Ciralsky and Jim Popkin