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5th Avenue Skyscraper Center of Iranian Mystery

When anyone enters the gleaming stone skyscraper on New York's Fifth Avenue, they have no idea they have walked into the middle of an international mystery.

VIDEO: Skyscaper Center of Federal Probe

Just blocks from Rockefeller Center, 650 Fifth Avenue is at the center of a federal probe, involving the FBI, two firms linked to Iran 's national bank and a wealthy U.S. foundation that supports Islamic charitable causes — whose former president has been accused of obstruction of justice.

In December, the Department of Justice charged the building's co-owners, the Assa Corporation and Assa Limited, of being front companies for Iran 's national bank, Bank Melli. The bank had been sanctioned by the U.S. Treasury Department for allegedly helping fund Iran 's nuclear and ballistic missile programs.

The other owner of the building is the Alavi Foundation, which was founded by the Shah of Iran and has been operating as a New York state charity for 35 years. Alavi owns 60 percent of the building and bills itself as a charitable effort to "support Interfaith harmony and promote Islamic culture and Persian language, literature and civilization." It claims assets of more than $121 million.

A look at its donation list from tax records shows some of America 's most prominent institutions have benefited from Alavi's largess, from Harvard and Columbia universities, to former President Clinton's work. Tax records show the William J. Clinton Foundation was given $30,000 in 2006. Alavi has also distributed millions to schools, mosques and Islamic Centers through the years.

Click here to view tax records.

But others have accused the Alavi Foundation of doing Iran 's bidding right here in America, and even alleged it is "controlled" by Tehran.

"There's no question that Alavi's activities are questionable," claims Joe Kildea, General Counsel for the group "United Against Nuclear Iran," which is fighting Tehran 's nuclear program.

He believes Alavi spreads Tehran 's message inside our country. Kildea says, "its very sophisticated and I think 650 Fifth Avenue is a perfect example of that. We're in the middle of the biggest city in the world and we had no idea that a terrorist government owned one of the best buildings in the city."

Questions have surrounded the Alavi Foundation for years.

In 2002, David Cohen, a former top level CIA official and current chief of intelligence for the NYPD, claimed in a court document that "The Alavi Foundation is a non-profit charitable organization ostensibly run by an independent board of directors but totally controlled by the government of Iran ." He also claimed the foundation "funds a variety of Anti-American causes."

Alavi's lawyer, John Winter, vigorously denied those allegations in 2002. In a letter to the court, Winter said that "the Foundation strenuously objects to the assertions Mr. Cohen has made against it, as they are false."

Winter added, “the Foundation is not controlled by the Iranian Government" and that "as far as the Foundation is aware, none of the organizations that uses the centers are involved in any anti-American activities." He also said "no government agency has ever treated the Foundation as though it were the property of the Iranian government" and that the courts have rejected claims that it's work is somehow "terrorist-related. " He called Alavi "a convenient target" because of its connection to the Shah and the fact that it "does not seek to hide its Islamic affiliation."

But investigators continue to ask questions, and there is now a grand jury investigation concerning the foundation.

In May, the District Attorney of Manhattan, Robert Morganthau, testified before the Senate Foreign Relations Committee. He told Chairman Senator John Kerry that "we were looking at the Alavi Foundation, this major Iranian foundation in New York and found money going to suspect people, and then we were looking at their banking transactions."

In December, the FBI carted out 100 boxes of records from Alavi's headquarters, all part of an investigation that has ensnared the foundation's former president, Farshid Jahedi. He is a 54-year-old executive who was ordered by prosecutors not to destroy any documents relating to the federal investigation in December. But prosecutors say that instead, he shredded paperwork involving Assa and the Fifth Avenue building, and dumped the torn documents in a garbage can in his hometown of Ardsley, N.Y. He apparently didn't know that the FBI was watching.

Jahedi has been charged with obstruction of justice. His lawyer, Barry Berke, protests his innocence, saying his client couldn't have been obstructing justice because federal prosecutors have copies of the material Jahedi was allegedly trying to destroy. "Mr. Jahedi did not have the intent to obstruct an investigation," he told the court, "because the documents allegedly destroyed contained information that is identical to the documents" authorities have.

As the investigation continues there are those who still believe the Alavi Foundation is tied to Iran.

Steven Flatow is a New Jersey businessman whose 20-year-old daughter Alisa was killed by a terrorist bomb in the Gaza in 1995. He sued the government of Iran, alleging it sponsors terrorism, and won a judgment of $225 million — but he has not collected a dime because of the constraints of international law.

Flatow also went after the Alavi Foundation in court, but his claim that Alavi was part of the Iranian government was rejected. The Court of Appeals for the Fourth Circuit ruled in 2000 ruled that Alavi was not part of the Iranian government and that Mr. Flatow could not prove that Tehran had "day to day control" over it. But even today, Mr. Flatow remains unconvinced.

"This is not an independent entity," he told FOX News, saying "It may not have received cable or telexes or e-mails everyday saying 'we want you to send us this, we want you to send us that.' People put in charge of these foundations know what they have to do."

John Winter, the lawyer for the foundation, again rejects such allegations.

In a statement to FOX News, he said that "the Alavi Foundation is an independent, not-for profit entity organized under the laws of New York. It is not owned by, controlled by, or linked to the Iranian Government."

Winter said the foundation abides by all American laws and he rejects the claims of the group "United Against Nuclear Iran."

Click here to read full statement from Winter.

As for Alavi's relationship to Bank Melli and the Assa Corporation, he says the foundation created a real estate partnership and the mortgage loan for the building on Fifth Avenue was repaid long before the federal government sanctioned Bank Melli.

"The U.S. Treasury did not identify Bank Melli as being owned or controlled by the Government of Iran until 1999, or twenty years after the Foundation received a mortgage from Bank Melli and ten years after the mortgage was repaid," he notes.

Lawyers for Assa and Mr. Jahedi would not comment publicly on the investigation. At a June 16th courthearing, Jahedi’s lawyer Barry Berke, said he expected the case to go to trial. If he is convicted, Jahedi could face up to 20 years in prison.

Sources tell FOX News the investigation is active and continuing.

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