On Thursday, a jury held that a Fifth Avenue office building in Manhattan violates U.S. sanctions against the government of Iran, and federal prosecutors can seize it. Since the building in question is valued at up to a billion dollars, its seizure constitutes the largest civil forfeiture in American history.
The building, located at 650 Fifth Avenue, is a 36-story skyscraper owned by a network of shell companies, which collected rent from tenants such as Nike, Juicy Couture, and Godiva Chocolate. As Quartz summarizes the case, a massive investigation involving the IRS, the FBI, the Justice Department, the NYPD, and the Manhattan district attorney’s office determined that the tower’s true ownership was concealed from the U.S. government, and it became a vehicle for funnelling millions of dollars to an Iranian bank in defiance of sanctions.
Another owner of the building is a charity called the Alavi Foundation, which prosecutors established was controlled by the Iranian government, despite the foundation’s claims to the contrary. In fact, the prosecution has argued that the charity is personally directed by the Supreme Leader of Iran, Ayatollah Ali Khamenei. Iran’s ambassador to the United Nations is also said to have been involved in running the operation.
Bloomberg News reports the case has been in progress since 2008, but some of the evidence introduced to the court is even older. One important document was a 1991 letter from an Alavi director who said he was stepping down from his position by order of the Supreme Leader.
“Under the worst and most sensitive of political conditions between America and Iran, we have succeeded in fully protecting and expanding the foundation’s interests, which in truth belongs to the people of Iran. We were also able to successfully carry out cultural and Islamic activities in the country of the Great Satan,” the outgoing director wrote.
Bloomberg’s account describes a number of clever strategies used by investigators to secure documents in the case and states one of the key witnesses was a former secretary of the Alavi Foundation who became an informant. The Foundation argued that this witness was an unreliable mercenary who “needed money and would do anything to ingratiate himself with the U.S. government.”
The New York Times notes that defense lawyers also argued the Alavi Foundation was unaware that its partner in owning 650 Fifth Avenue, the Assa Corporation, was tied to the Iranian government. In fact, Alavi argued that Assa management lied to them about who the current owners of the corporation were and “stonewalled” their requests for more information. This claim was the basis for an appeals court sending the case back to trial in 2016 after a federal district court judge ordered forfeiture in 2013.
The prosecution countered that Alavi officials took deliberate steps to obscure their connections to the Iranian government, including the destruction of subpoenaed documents. One of the more half-hearted obfuscation attempts reportedly involved dropping the incriminating evidence in the parking lot of a shopping mall, from which they were speedily retrieved by FBI agents.
“In this trial, 650 Fifth Avenue’s secret was laid bare for all to see. The owners of 650 Fifth Avenue gave the Iranian government a critical foothold in the very heart of Manhattan through which Iran successfully circumvented U.S. economic sanctions,” said Acting U.S. Attorney for the Southern District of New York Joon H. Kim.
“The government has agreed to distribute proceeds from the building’s sale, which could bring as much as $1 billion, to the families of victims of Iranian-sponsored terrorist attacks, including the Sept. 11 attacks,” the New York Times reports. There will be over a thousand beneficiaries of this program.