Former Arab-American Marine: Credit union treated me unfairly

posted on: Aug 23, 2015

Untold numbers of U.S. citizens, including troops, defense contractors and others are facing financial hardships due to federal laws aimed at restricting the flow of money to terrorist groups.

One of them is a former Marine who contends he was unfairly treated when his credit union forced him to close his accounts because he was sending money to his wife and children in Yemen.

Yet several years after his family has joined him in the U.S., Navy Federal Credit Union refuses to reinstate Khaled Hafid as a member — even though he now works for the State Department and still holds a security clearance.

Though his case is several years old, it underscores broader concerns about potentially subjective application of laws that may adversely affect innocent individuals

To support his wife and children, Hafid, who left the Marine Corps in 2006 after serving nearly 10 years, said he would wire money through his uncle to give to his wife. “My brothers did the same for their wives,” he said.

Hafid said Navy Federal Credit Union told him in 2011 that it no longer wanted to do business with him. His three brothers, in the Merchant Marines, also were sending money to their wives through their Navy Federal accounts. The credit union closed their accounts as well, Hafid said.

“The reason was due to our wire transfers … they basically felt that we were funding terrorism,” Hafid said.

Yet, “previously on numerous occasions, we asked Navy Federal if it was OK to send the money, and they said, ‘Sure,’ ” he said.

After he moved his money to another financial institution — USAA, to which he still belongs — Hafid said he stopped sending money because he was afraid to do so after his Navy Federal experience.

It’s been more than four years, but Hafid said the experience still rankles him, particularly when he sees Navy Federal’s recent television commercials about its support for the military and their families. During similar USAA commercials, he said, he points out to his daughter that they are proud members.

In June 2014, he said he asked Navy Federal to reinstate him as a member, noting that his wife and children were in the U.S. and there was no need to send money to them in the Middle East. He said he was refused.

Hafid works for the State Department, and has had a security clearance since his days as a Marine. He also wrote a book, “WTFO: The Silence is Deafening,” published in 2012, about his experience dealing with deployment, conflict, death and recovery as an Arab-American in the U.S. military.

He expressed concern that what happened to him could be happening to other service members. “I’ve met a lot of Marines whose parents came from other countries … from Mexico, South America, some from the Middle East,” he said. “They can put their lives on the line, but they can’t send money to help their families?”

Navy Federal spokesman Brian K. Parker said the credit union “has a long history of supporting military members around the world.”

“We carefully review and examine each membership individually. While we cannot speak to the specifics of any individual members’ cases, Navy Federal does not hold any members’ money in any case where restrictions are imposed,” Parker said.

“Thus members are not blocked from accessing their funds themselves. Navy Federal complies with the Bank Secrecy Act and cooperates fully with law enforcement and intelligence communities and their reporting requirements.”

When Hafid received his letter from Navy Federal in 2011, he was working for a contractor. “I have been vetted many times over, and my service speaks for itself. Navy Federal spat on my service, [and] their claim that they support military service members and their families is a lie,” he said.

His parents immigrated to the U.S. from Yemen, and he was born here and thus is a U.S. citizen. His was an arranged marriage, and his wife lived in Yemen until he brought her and their children to the U.S. in 2012.

The letter Hafid received, dated May 20, 2011, states: “In a review of your personal accounts, it was noted that your account activities do not fall within our underlying acceptance of risk.”

The credit union said it would place a restriction on his personal accounts, effective a week later. “You may visit your nearest branch office to withdraw all funds on deposit,” stated the letter, signed by the senior vice president for security.

Broader issues

Hafid is not the only person dealing with the issue, nor is Navy Federal the only financial institution dealing with federal laws that affect these transactions.

A spokesman for the National Credit Union Administration, the federal agency that regulates and supervises federal credit unions, said he could not comment on the actions of any individual credit union, but provided general information about requirements placed on financial institutions.

“The Bank Secrecy Act requires institutions to report on any transaction they believe to be suspicious or which rises to a specific dollar level, depending on the type of transaction,” said John Fairbanks, a spokesman for the NCUA.

“The Act also requires institutions to know their members or customers, which means they must verify identities and have sufficient information to understand the nature and details of transactions they process. The decision about whether to provide a specific type of service remains a business decision of the institution.”

The Bank Secrecy Act and related laws, including the USA Patriot Act, require financial institutions to identify and report potentially suspicious activity, placing them in a key role in the broader effort to avoid financing terrorism.

Like Navy Federal, Armed Forces Bank has customers all around the world. “We have to watch transfers, wires, any type of activity going outside the U.S., especially to places listed as high risk,” said Don Giles, AFB president.

Yemen is one such location.

“When we’ve seen a pattern of activity with which we couldn’t find a comfort level, we have closed accounts because of the risk,” Giles said. “The monetary penalties are just too high to accept the risk.”

AFB records are examined once a year by the federal Office of the Comptroller of the Currency, which regulates national banks. “We have to show logs, records and various other reports,” Giles said. “International activity is something they look at. The OCC does understand who our customers are and our line of business, and that they travel around the world.”

Financial institutions have been closing the accounts of Muslims or Muslim organizations without giving a reason — which is not required under the Patriot Act, said Ibrahim Hooper, spokesman for the Council on American-Islamic Relations.

Former Marine Khaled Hafid served two tours in Iraq before leaving the service for a job with the State Department. (Photo: Hafid family)
“I’m sure a lot of institutions take action based not on specific allegations of wrongdoing or any evidence, but based on certain parts of the world,” Hooper said.

“Laws like the Patriot Act allow this without any accountability. If the government or financial institutions have evidence of wrongdoing, they should take legal action based on evidence. But to take action based on stereotypes and suspicion is not what we should be doing as a country,” he said.

“Sending money, as long as it is done legally, shouldn’t trigger these actions.”

“I worked very hard to serve my country,” said Hafid, who, as a platoon sergeant took part in the initial invasion of Iraq in 2003, and deployed there again in 2004.

“Being told I’m not good enough … it hurts.”

Source: www.militarytimes.com