The U.S. Can Now Seize a $500 Million Manhattan Skyscraper From the Iranian Government

Cha-ching.

650 Fifth Avenue, pictured center, has been found to be a front for the Iranian government.
National Journal
Brian Resnick
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Brian Resnick
Sept. 18, 2013, 7:25 a.m.

The Man­hat­tan build­ing known as 650 Fifth Av­en­ue looks in­no­cent enough. It’s an un­adorned brown-and-glass rect­angle, amount­ing to a mod­est 36 floors. It does, however, boast a newly re­designed lobby and a new “out­door esplanade to bet­ter serve its ten­ants and en­vir­on­ment.” There’s an on­go­ing $11 mil­lion im­prove­ment pro­ject to the fa­cil­ity. It’s prob­ably not a bad place to work, con­sid­er­ing the land­lord.

Tues­day, a fed­er­al court found the build­ing to be a 36-story front for the Ir­a­ni­an gov­ern­ment. The build­ing was built in the ‘70s by a non­profit op­er­ated by the shah of Ir­an, who was over­thrown in 1979. In the en­su­ing years, the Justice De­part­ment ar­gues, the Ir­a­ni­an gov­ern­ment came to own it through two shell com­pan­ies. Today, Ir­an’s na­tion­al bank, Bank Melli, owns 40 per­cent of the build­ing through a front called Assa Corp. The oth­er 60 per­cent is owned by the Alavi Found­a­tion, which is al­leged to be con­trolled by the Ir­a­ni­an gov­ern­ment.

The court’s sum­mary:

The Alavi Found­a­tion has been provid­ing nu­mer­ous ser­vices to the Ir­a­ni­an Gov­ern­ment, in­clud­ing man­aging the Build­ing for the Ir­a­ni­an Gov­ern­ment, run­ning a char­it­able or­gan­iz­a­tion for the Ir­a­ni­an Gov­ern­ment, and trans­fer­ring funds from 650 Fifth Av­en­ue Com­pany to Bank Melli Ir­an (“Bank Melli”), a bank wholly owned and con­trolled by the Gov­ern­ment of Ir­an.

This vi­ol­ates Wash­ing­ton’s severe eco­nom­ic sanc­tions against Ir­an and paves the way for the U.S. to seize the build­ing. Ac­cord­ing to the U.S. at­tor­ney who brought suit, the money from the sale will be used to provide “a means of com­pens­at­ing vic­tims of Ir­a­ni­an-sponsored ter­ror­ism.”

The Justice De­part­ment ac­tu­ally does this sort of thing all the time. Re­cently, The New York­er re­por­ted that the de­part­ment seized a re­cord $4.2 bil­lion worth of as­sets last year (that art­icle provides the most-com­pre­hens­ive ex­plan­a­tion of how civil for­feit­ure works in the U.S. The build­ing’s own­ers ac­tu­ally need not to be con­victed of any­thing for the gov­ern­ment to seize the prop­erty; a judge find­ing it was con­nec­ted to a crime is reas­on enough.)

The in­vest­ig­a­tion in­to the 5th Av­en­ue sky­scraper has been go­ing on since at least 2009, ac­cord­ing to En­emies With­in: In­side the NYPD’s Secret Spy­ing Unit and bin Laden’s Fi­nal Plot Against Amer­ica, a book writ­ten by two AP re­port­ers.

“The FBI be­lieved it was a front for the Ir­a­ni­an gov­ern­ment,” the au­thors wrote. “Based on that case­work, the U.S. Justice De­part­ment was pre­par­ing to con­fis­cate Alavi’s $600 mil­lion build­ing on Fifth Av­en­ue, which would be one of the biggest coun­terterrror­ism seizures in U.S. His­tory.” USA Today re­ports the build­ing could fetch between $500 mil­lion and $700 mil­lion.

The Alavi Found­a­tion is dis­put­ing the claim.”We have re­viewed the de­cision and dis­agree with the court’s ana­lys­is of the facts and the law,” a state­ment sent to mul­tiple news out­lets read. “The Found­a­tion was ready for tri­al and is dis­ap­poin­ted that it did not have the op­por­tun­ity to re­but the Gov­ern­ment evid­ence be­fore a jury.”

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