During a September 2006 raid of the Michigan office of Life for Relief and Development (Life), the federal authorities seized computers and organizational records, but told the press the investigation did not relate to terrorism, and that the charity could still operate as before the raid. Although the Federal Bureau of Investigation (FBI) returned most of the computers shortly after the raid, they kept the documents and files of the organization. When Life later requested the financial documents and receipts to be returned, to enable the organization to file the appropriate tax returns, the FBI attempted to charge Life over $100,000 for “copying fees.”
Life filed suit in federal court against the FBI for return of records. The judge rejected the government’s argument that Life’s documents required “special security arrangements” in order to be copied. Life successfully argued in court that they had a right to the documents and that the charges were exorbitant. The judge ruled that the FBI could have Kinkos copy the records at one-tenth the price and that the FBI must pay half of those costs.
After the raid, Life had problems getting service from banks, even though at the time of the raid, the FBI said the investigation was not related to terrorism, and no charges have been filed. The bank that serviced Life at the time used the pre-tense of complying with the Treasury Department's Voluntary Anti-Terrorist Financing Guidelines, which are supposed to be voluntary and flexible.
Despite these facts, shortly after the raid, Comerica Bank informed Life that it planned to close all seven of its bank accounts within two weeks. The bank agreed to extend the deadline to Nov. 15 in light of the beginning of Ramadan, the traditional period when Muslims make charitable donations as part of their religious obligation. Because Life needed the extra time to be able move transactions like website donations and payroll, Comerica agreed to extend its deadline to Nov. 22, 2006. The bank never gave a reason for closing the accounts but did tell Life officials that it planned to share information about the group with other banks under Section 314(b) of the Patriot Act, which provides that "an institution must exchange information with other institutions regarding the closure of the account when it concerns money laundering or terrorist related activity."
Since the FBI had publicly stated that the raid was not related to terrorism, and such information sharing would make it difficult if not impossible for Life to open another bank account and continue its operations, the group filed suit in federal court seeking an injunction to "prohibit Defendant Comerica from disseminating any false or misleading information under 314(b) of the Patriot Act." The suit also challenged the constitutionality of Sec. 314(b) and claimed Comerica's actions violated the Life's civil rights, since "Had the officers not been of Arabic descent or if Plaintiff was not a Muslim American charity, upon information and belief, the bank account would still be open." The community showed its support through a series of pickets and demonstrations at Comerica branches, and some Muslim Americans closed their accounts there.
After Life secured agreements to work with other banks, it reached an out of court settlement with Comerica whereby the bank agreed not to disseminate any negative information and the charity would drop the suit. Life then transferred its business to the other banks.
