Published September 19, 2013
The U.S. Attorney’s office has seized ownership of a skyscraper in New York City, alleging that it was secretly owned and operated by the Iranian Government.
The structure at 650 Fifth Avenue, a 36-story building near Rockefeller Center in midtown Manhattan formerly known as the Piaget Building, was seized after a judgment by the New York Southern District court on Tuesday. The government plans to use money from the seizure to compensate victims of Iranian–sponsored terrorism.
U.S. Attorney Preet Bharara claimed that the property owner, the Assa Corporation, was nothing more than a front for the state-run bank that financed the building.
“The Judge’s opinion upholds what was the contention of this Office from outset: ‘Assa was (and is) a front for Bank Melli, and thus a front for the Government of Iran,’” Bharara said in a statement.
The building was originally erected in the 1970s by the Phalavi Foundation, a non-profit that was operated at the time by the Shah of Iran and financed by Bank Melli, which is controlled by the Iranian Government.
After the Iranian revolution, the loan for the building was cancelled in the 1980s and ownership was transferred to Assa and the Alavi Corporation. The U.S. alleges that Assa and Alavi were shell companies set up by the Iranian regime, with the former based in the UK’s Channel Islands to launder money back to the government.
The U.S. has spent the past five years on seizing the building in what it calls “the largest-ever terrorism forfeiture.”
A statement from the Alavi Foundation posted on its website claims it intends to appeal the court’s decision.
“We are obviously disappointed with the district court’s decision granting partial summary judgment against the Alavi Foundation,” reads the posting. “We have reviewed the decision and disagree with the court’s analysis of the facts and the law. The Foundation was ready for trial and is disappointed that it did not have the opportunity to rebut the Government evidence before a jury.”
It is alleged that both companies had transferred income made from rental space to Bank Melli and in turn the Iranian Government.
Some of the corporations that have offices in the building include CitiBank, Starwood Hotels and Armani.
Reports say that the building will have a sale tag of between $500-700 million and recently had $11 million in improvements.