NEW YORK (Reuters) - Wounded U.S. veterans and family members of U.S. 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, New York, named Barclays Plc, Credit Suisse Group AG, HSBC Holdings Plc, Royal Bank of Scotland Group Plc 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 militant 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 militant groups that operated in Iraq at Iran's direction, according to the suit.
The militant groups included a Shi'ite 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 U.S. government to resolve allegations that they handled money in violation of sanctions against nations such as Iran, Libya and Cuba. All the banks signed deferred prosecution agreements with the U.S. Justice Department in addition to settlements with U.S. banking regulators. The agreements did not allege a link between the transactions, which the U.S. government viewed as unlawful, and militant operations.
Patrick Farr, a California-based plaintiff whose son Clay was killed by a roadside bomb in February 2006, said the lawsuit has given him "a sense that I was able to do something, hold someone accountable for his death."
The case faces major obstacles, said Jimmy Gurule, a Notre Dame University law professor. The Anti-Terrorism Act does not specifically permit conspiracy claims, and federal courts in New York have previously refused to permit cases to proceed unless they allege a direct link between banks and militant attacks.
The law also bars claims for wartime injuries. "The law was not intended to give a private right of action to soldiers in a military conflict," Gurule said.
