N.Y. Tower in suit tied to Iran is forfeited, judge rules

Bloomberg – A 36-story New York City office tower must be forfeited by its co-owner, Assa Corp., because the company acted as a front for Iran in violation of the U.S. embargo and federal money-laundering laws, a judge said.

The U.S. sued Assa, based in the U.K.’s Channel Islands, and the Alavi Foundation, a successor to a foundation created by Shah Mohammed Reza Pahlavi, who was overthrown as Iran’s leader in 1979. The office building, located at 650 Fifth Ave., was constructed by the Pahlavi Foundation, a nonprofit set up by the Shah.

The U.S. claimed Bank Melli, Iran’s national bank, co-owned the building through Assa. U.S. District Judge Katherine Forrest in Manhattan, who presided over the case, in September agreed, ruling that Assa acted as a front for Bank Melli.

Forrest today rejected the defendant’s argument that it was an “innocent owner” of 650 Fifth Ave. and other properties.

“Alavi argues that forfeiture of the foundation’s 60 percent interest in 650 Fifth Avenue Co. and therefore in the building — assets worth more than $500 million — is grossly disproportionate to its offense,” Forrest said. “This court disagrees.”

Other Properties

Assa had argued that the forfeiture of the entire building at 650 Fifth Ave. would be “unconstitutionally disproportionate.”

Forrest also ruled that six other properties located in the Queens section of New York, as well as in Texas, California, Virginia and Maryland, should be forfeited because the foundation used funds generated by them and 650 Fifth Ave. for its activities. The Manhattan property generated more than $228 million in gross rents it received from tenants, Forrest said.

Forrest also ruled today that the foundation must forfeit funds in three bank accounts.

Daniel Ruzumna, a lawyer for the Alavi Foundation and 650 Fifth Ave. Co., didn’t immediately return a voice-mail message left at his office seeking comment about the ruling.

The case is in re 650 Fifth Avenue and Related Properties, 08-cv-10934, U.S. District Court, Southern District of New York (Manhattan).

Back to top button