NEW YORK (Reuters) - A federal judge said Monday the owners of a skyscraper on New York’s Fifth Avenue were deliberately “shielding and concealing Iranian assets,” in violation of U.S. law.
U.S. District Judge Katherine Forrest ruled last week that the majority owner of the building, the Alavi Foundation, knew that two minority owners were fronts for Iran’s Bank Melli.
In an 82-page opinion on Monday explaining her ruling, Forrest said the violation was a deliberate effort to help Iran, which violates the International Emergency Economic Powers Act and U.S. money laundering laws.
She wrote “there is a far broader violation - one that involves not simply an unknowing and innocent provision of services to Iran, but providing those services to assist Iran by shielding and concealing Iranian assets.”
A lawyer for the Alavi Foundation declined to comment on Monday.
Forrest’s ruling comes in a long-running case over links between the building, known as 650 Fifth Avenue, and Iran. While still subject to appeal, the ruling could eventually result in the building being seized by the U.S. government.
According to the government’s lawsuit, Alavi and two minority owners transferred rental income from the building to Bank Melli. The building generated close to $39 million in rental income from 1999 through 2007, according to the lawsuit.
That contravened the IEEPA, which empowers the president to deal with threats related to national emergencies, after U.S. President Bill Clinton issued an executive order in 1995 banning the supply of most services from the United States to Iran.
In her opinion on Monday, Forrest said Alavi provided services to the minority owners, Assa Corp and Assa Co Ltd, which “was (and is) a front for Bank Melli, and thus a front for the Government of Iran.”
A lawyer for the Assa entities did not immediately respond to a request for comment.
Forrest also dismissed the notion that since 1995, when U.S. sanctions took effect, Alavi might not have known that Iran controlled Assa, as Alavi had argued.
“No rational juror could believe in such extraordinary amnesia,” Forrest wrote. “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 Alavi after the sanctions took effect, she wrote.
The ruling does not include seven other properties that are in Alavi’s name only.
Forrest’s written opinion comes on the day she had been scheduled to preside over two parallel trials in which the Justice Department and private plaintiffs, who were victims of attacks they contend were aided by Iran, were seeking to take control of the buildings.
Her ruling granted a request by U.S. prosecutors to decide the government’s case ahead of the trial, writing that there “was no triable issue of fact.”
A separate trial begins September 30 on the private plaintiffs’ claims seeking forfeiture of 650 Fifth Avenue and seven other properties.
The case is: In re 650 Fifth Avenue and related properties, U.S. District Court, Southern District of New York, No. 08-10934
Editing by Eric Walsh