NEW YORK (AP) — A federal judge has approved plans to
sell a 36-story Manhattan office building and other properties owned by
Iran nationwide in what will be the largest terrorism-related forfeiture
ever, a prosecutor said Thursday.
U.S. Attorney Preet Bharara
said Judge Katherine Forrest approved the deal between the U.S.
government and 19 holders of more than $5 billion in terrorism-related
judgments against the government of Iran, including claims brought by
the estates of victims killed in the Sept. 11, 2001, terrorist attacks.
The
deal calls for the Manhattan building and other forfeited assets to be
sold by the U.S. Marshals Service, with the U.S. government receiving
reimbursement for litigation expenses and any costs of the sales before
the rest is distributed to victims of terrorist attacks. The agreement
stems from a 2008 lawsuit by the government against the building’s
owners.
Bharara said the settlement is an important step toward
"completing what will be the largest ever terrorism-related forfeiture
and providing a substantial recovery for victims of terrorism."
"From
the very beginning of this case," Bharara said in a release, "this
office sought to dismantle Iran’s slice of Manhattan — an office tower
on Fifth Avenue — both to end Iran’s illegal sanctions-violation and
money-laundering schemes and to provide a means of compensating victims
of Iranian-sponsored terrorism."
Besides Sept. 11 victims, the
settling creditors include families and estates of victims of the 1983
terrorist bombings of U.S. Marine Barracks in Beirut, the 1996 terrorist
bombing of the Khobar Towers in Saudi Arabia and terrorist attacks in
Israel and elsewhere.
The government said buildings also will be sold in Queens and in Houston, Carmichael, Calif., Catharpin,
Va., and Rockville, Md.
Prosecutors
said funds will be drawn from bank accounts formerly in the name of
entities that served as fronts for the Iranian government. The
properties’ estimated total worth wasn’t provided Thursday.
The
judge ruled last September that the Manhattan office tower was subject
to forfeiture because revenue from it was secretly funneled to a
state-owned Iranian bank in violation of a U.S. trade embargo.
The
U.S. government had said the Alavi Foundation’s sole partner in the
ownership of the Manhattan building was a shell company fronting for a
secret interest held by the state-owned bank of Iran, Bank Melli. The
Iranian government has been designated by the U.S. as a sponsor of
international terrorism, an allegation it has repeatedly denied.
The judge agreed that monetary transfers by the shell company, Assa Co., to Bank Melli violated money
laundering statutes.
"There
is substantial, un-contradicted evidence that Assa is owned and
controlled by Bank Melli and that Bank Melli is wholly owned and
controlled by Iran," the judge said.
Lawyers for Alavi and Assa
did not immediately return messages for comment Thursday. They said in
September that they planned to appeal.
The Fifth Avenue building
was built in the 1970s on property acquired by a not-for-profit
corporation formed in New York by then Iranian leader Shah Mohammad Reza
Pahlavi, who was overthrown in 1979. It was valued at $83 million in
1989.
Copyright 2014 The Associated Press. All rights
reserved. This material may not be published, broadcast, rewritten or
redistributed.