Foundation Laundered Money for Iranian Bank

     (CN) – A foundation with an ownership interest in a 36-story office tower in midtown Manhattan was a money-laundering front for Iran’s national bank, a federal judge ruled.
     “The court has found that, based on the uncontroverted record evidence, Assa was (and is) a front for Bank Melli, and thus a front for the government of Iran,” U.S. District Judge Katherine Forrest wrote. “However 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.”
     The federal government commenced a forfeiture action against the Alavi Foundation’s interest in the tower at 650 Fifth Ave. in 2008, claiming the organization has been providing “numerous services” to the Iranian government and transferring money from the building to Bank Melli.
     The office building was constructed by the Pahlavi Foundation, a nonprofit group set up by Shah Mohammed Reza Pahlavi, who was ousted as Iran’s leader in 1979.
     A spokeswoman for the Department of Justice declined to comment on the ruling Monday. A voice message for Peter Livingston, Assa’s attorney, did not immediately return a phone call seeking comment.
     “Based on the undisputed evidence, the court finds that, as to Assa, there is no triable issue of fact as to whether Assa has engaged in violations of (Iranian Transaction Regulations) promulgated pursuant to the (International Emergency Economic Powers Act),” the judge wrote. “There is also no triable issue of fact as to whether Assa has engaged in both the promotion and concealment of money laundering as well as international money laundering.”
     The judge also said Assa failed to raise a triable issue of fact as to which of its assets are subject to forfeiture, and similarly, there is no triable issue with respect to whether Assa is an innocent owner or whether the action was timely brought.
     Since at least 1995, the government claims Alavi knew that Assa was controlled by Iran.
     Judge Forrest described Alavi’s assertions it didn’t know and that it “lost track of Bank Melli’s previously clear control of Assa” as “implausible.”
     “The government argues that Alavi asserts a sort of collective amnesia,” she wrote. “The court finds the analogy apt and its reality implausible. No rational juror could believe in such extraordinary amnesia; 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, or returned to positions with, Alavi after the ITRs were instituted in 1995,” the judge wrote.
     Forrest also said no evidence indicates that the ultimate owner and beneficiary of Assa was anyone other than Bank Melli. “Similarly, there is no triable issue as to Alavi’s knowledge that it knew or was willfully blind as to whether the Iranian government owned and controlled Assa.”
     Alavi argued that, even if Assa’s interest is forfeitable, that Alavi did not itself make any international transfers and thus cannot forfeit its interest.
     But the judge disagreed, finding that it is “irrelevant” that Alavi only transferred funds to Assa Corp. within the United States.
     Forrest said all assets at issue in the litigation, with the exception of seven properties held in the name of the Alavi Foundation, but bought before 1995, are subject to forfeiture.
     Alavi “knew that its transfer of assets from the 650 Fifth Ave. Co. to Assa Corp. was for the purpose of making an international transfer to Assa Co. Ltd. That would further the violation of IEEPA.”

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