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Hamas Victims Can't Recover Using Terrorist Funds

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By Brett Snider, Esq. on June 27, 2013 3:59 PM

A family injured in a terrorist attack carried out by Hamas cannot use Holy Land Foundation funds in order to satisfy their civil judgment against Hamas.

The Holy Land Foundation (HLF) has been designated by the federal government as a terrorist organization that acts as a fundraiser for Hamas in the United States. However, the Fifth Circuit will not allow HLF funds to be used to satisfy civil judgments while the money is under criminal forfeiture proceedings.

Civil Case Against Hamas

The Rubins, a group of nine Americans citizens who were injured in a Hamas attack in Jerusalem in 1997, sued Hamas under the Anti-Terrorism Act of 2001 and in 2004 they received a judgment of $214.5 million.

After the judgment, the Rubins requested that the Western District of Washington issue a writ of garnishment against a financial institution that held HLF funds to satisfy their judgment.

However, in 2001, the Secretary of the Treasury had designated Hamas and HLF as terrorist groups and had frozen their funds and assets by executive order, which lead to a federal criminal investigation of HLF in 2004.

The federal criminal investigation had put the funds into forfeiture proceedings four days prior to the Rubins obtaining their judgment against Hamas.

If At First You Don’t Succeed, TRIA-gain

At the end of HLF’s criminal trial, $12.4 million was determined to be the fruits of criminal activity and was forfeited to the federal government pursuant to 18 USC §982(a)(1).

A Texas federal district court found that the Rubins could attach their judgment to the HLF money under the Terrorism Risk Insurance Act (TRIA) §201, but the Fifth Circuit disagreed. The Court opines that TRIA only allows for attachment of “blocked assets” of terrorist organizations, and the money was no longer available under TRIA once the government had snatched it for forfeiture proceedings.

TRIA v. Forfeiture

It seems like the general purpose of TRIA, to allow victims of terrorism access to frozen terrorist funds in order to satisfy judgments, would be thwarted if the government was allowed to swoop in and seize them.

TRIA has a clause which requires its application “notwithstanding any other provision of law,” but the Fifth Circuit sided with the government in narrowly interpreting that clause to only override “conflicting” statutes. The circuit court felt that, given what they saw as clear statutory language in the TRIA, there was no reason to “muddy” it by looking into the legislative history.

Bottom Line

The outcome is still slightly muddy for the Rubins, who have been cut off from a very real way to satisfy their judgment against Hamas with HLF money. But maybe the federal government will do something spectacular with that $12.4 million that will ease the pain the Rubins have suffered from being victims of terror.

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