Lawsuit accuses banks of playing a role in financing terror attacks

A five-car convoy opened fire on a compound 30 miles south of Baghdad, a sneak attack that killed four U.S. soldiers in one of the deadliest days in the Iraq War. A roadside bomb struck a U.S. military vehicle, severing part of a soldier’s head. And a militant group kidnapped and killed a U.S. journalist.

Those acts of terrorism occurred a world away from Wall Street. But they now underpin a lawsuit against some of the world’s biggest banks.

More than 200 people, primarily U.S. service members or family members of soldiers killed in Iraq, filed the lawsuit Monday in federal court in Brooklyn. Citing more than 50 attacks on U.S. citizens stationed or working in Iraq during the war, the lawsuit accuses the banks of helping to finance the violence through their ties to Iran.

The banks — HSBC, Barclays, Standard Chartered, the Royal Bank of Scotland and Credit Suisse, European institutions that have a major presence in New York — did not deal directly with the militants. But they have acknowledged transferring billions of dollars on behalf of Iran, which has long been suspected of funding and training the terrorist groups that carried out attacks against Americans in Iraq.

The plaintiffs are taking their cue from federal prosecutors, who accused these same banks of transferring money on behalf of Iran in violation of U.S. sanctions. The banks settled the cases, paying hundreds of millions of dollars in fines and admitting to wrongdoing.

The most powerful elements of Monday’s lawsuit are the stories of the victims.

The attack on the compound outside Baghdad in January 2007, the lawsuit said, was the work of a terrorist group “trained and armed by Iran’s Quds Force with Hezbollah’s assistance.” Once inside the compound, the group sprayed bullets and lobbed grenades, killing several U.S. soldiers, including 20-year-old Johnathon M. Millican, who jumped on one of the grenades. Millican’s widow and father joined the lawsuit, along with the families of three other soldiers killed in that attack and a surviving, shell-shocked soldier.

The journalist, Steven Vincent, was kidnapped and shot in August 2005. His widow, mother and father are plaintiffs in the lawsuit.

This story was originally published November 11, 2014 at 10:04 AM with the headline "Lawsuit accuses banks of playing a role in financing terror attacks."