Jury finds that NYC skyscraper owner violated Iran sanctions

The U.S. government said it's ready to seize a Manhattan skyscraper from an Iranian-American charity to benefit victims of terrorism after a jury found Thursday that the charity's majority ownership was derived from financial dealings that violated sanctions against Iran.

Acting U.S. Attorney Joon H. Kim said the owners of the office tower near Rockefeller Center "gave the Iranian government a critical foothold in the very heart of Manhattan through which Iran successfully circumvented U.S. economic sanctions."

"For over a decade, hiding in plain sight, this 36-story Manhattan office tower secretly served as a front for the Iranian government and as a gateway for millions of dollars to be funneled to Iran in clear violation of U.S. sanctions laws," Kim said in a statement. "In this trial, 650 Fifth Avenue's secret was laid bare for all to see, and today's jury verdict affirms what we have been alleging since 2008."

The verdict in the civil case was sure to be appealed. The 2nd U.S. Circuit Court of Appeals had earlier ordered the case to go to trial after U.S. District Judge Katherine B. Forrest ruled in favor of the United States.

Over the last month, lawyers for the Alavi Foundation argued that the charity was unaware if Iran was secretly benefiting from a partner who owned 40 percent of the building. The Alavi Foundation owns 60 percent.

Kim said the building was worth at least a half billion dollars, though some estimates put its worth closer to a billion dollars.

Kim said the sale of the building, combined with several other properties around the country, would represent the largest terrorism-related civil forfeiture in U.S. history.

The prosecutor said the verdict "allows for substantial recovery for victims of Iran-sponsored terrorism."

Indianapolis attorneys Mary Beth Ramey and Rich Hailey are part of a small consortium of 10 attorneys who have filed actions for more than 200 families of 9/11 victims, beginning in 2002.

In a statement, Ramey said the ruling will permit their clients to receive a substantial satisfaction of their outstanding compensatory damages.

The government is seeking to turn over proceeds of a sale to holders of over $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, attacks.

Forrest aided that effort Thursday by issuing a written opinion finding the Alavi Foundation liable for the turnover of its real estate properties to the benefit of its creditors, including terrorism victims.

"We are gratified to win this victory for the victims of Iran-sponsored terrorism, some of whom have waited more than two decades for this day," attorney James Bernard said in a statement.

In another statement, Alavi Foundation attorney John Gleeson said: "The Alavi Foundation is disappointed by today's verdict and by the court's decision in the related cases and is considering its options."

It was unclear what effect the verdict will have on the Alavi Foundation, which supports a Queens school among other charity works.

The verdict seemed to spare a Catharpin, Virginia, property after jurors concluded its funds did not violate sanctions and were not used in money laundering activities. The government said the verdict should allow it to seize properties in Houston; Carmichael, California; and Rockville, Maryland.

The Fifth Avenue building was erected in the 1970s on property acquired by the not-for-profit corporation. It was valued at $83 million in 1989 and has steadily risen in value.

Government lawyers said Iran has secretly controlled the building for years as millions of dollars in rent payments are funneled to it from a partnership made up of Alavi and a shell company fronting for a secret interest held by the state-owned bank of Iran, Bank Melli.