Judge Finds Manhattan Skyscraper Owned by Iranian Front

The United States government may be about to take possession of a Manhattan skyscraper worth more than $500 million after a federal judge found its owners knowingly served as fronts for the Iranian government.

The order granting what prosecutors describe as "the largest real property forfeiture" came after five years of litigation, the New York Daily News reports. If the order is upheld in an anticipated appeal, the government could sell the property and give some of the proceeds to victims of terrorist attacks, including the 1983 Beirut Marine barracks bombing and the 9/11 attacks.

The Alavi Foundation owns 60 percent of the 36-story 650 Fifth Ave. building in midtown Manhattan. The rest is held by the U.K.-based Assa Company, Limited. But U.S. District Judge Katherine Forrest ruled that there is "uncontroverted record evidence, [proving] Assa was (and is) a front for Bank Melli, and thus a front for the Government of Iran" to shield its U.S.-based assets.

The U.S Treasury Department designated Bank Melli in 2007 as part of a package of economic sanctions aimed at slowing Iran's nuclear weapons program. Bank Melli, Treasury wrote at the time, "has facilitated the purchase of sensitive materials utilized by Iran's nuclear and missile industry…"

Attorneys for the Alavi Foundation argued that it is not clear that their clients knew about Assa's control by the Iranian government. Forrest dismissed that theory as "implausible" given the established connections among the owners. "No rational juror could believe in such extraordinary amnesia; many of the same Alavi board members who were indisputably involved in the creation of Assa as a front for Bank Melli in 1989 remained with, or returned to positions with, Alavi after the [orders prohibiting business dealings with Iran] were instituted in 1995."

Victims of Iranian-sponsored terrorist attacks have secured billions of dollars in civil judgments against the Islamic Republic for financing and providing other assistance to the killers. Little of those damages have been collected, however, as victims often find themselves fighting the U.S. government in their attempts to seize Iranian assets in the United States. It is unclear whether the government's success in New York could pry open the gates for those victims to complete their quest for justice.

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