Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

N.Y. Tower in Suit Tied to Iran Is Forfeited, Judge Rules

A 36-story New York City office tower must be forfeited by its co-owner, Assa Corp., because the company acted as a front for Iran in violation of the U.S. embargo and federal money-laundering laws, a judge said.

The U.S. sued Assa, based in the U.K.’s Channel Islands, and the Alavi Foundation, a successor to a foundation created by Shah Mohammed Reza Pahlavi, who was overthrown as Iran’s leader in 1979. The office building at 650 Fifth Ave. was constructed by the Pahlavi Foundation, a nonprofit set up by the Shah.

The U.S. claimed Bank Melli, Iran’s national bank, co-owned the building through Assa. U.S. District Judge Katherine Forrest in Manhattan agreed, ruling in September that Assa acted as a front for Bank Melli.

Forrest today rejected the defendant’s argument that it was an “innocent owner” of 650 Fifth Ave. and other properties.

“Alavi argues that forfeiture of the foundation’s 60 percent interest in 650 Fifth Avenue Co. and therefore in the building -- assets worth more than $500 million -- is grossly disproportionate to its offense,” Forrest said. “This court disagrees.”

Other Properties

Assa had argued that the forfeiture of the entire building at 650 Fifth Ave. would be “unconstitutionally disproportionate.”

Forrest also ruled that six other properties in the Queens section of New York, as well as in Texas, California, Virginia and Maryland, should be forfeited because the foundation used funds generated by them and 650 Fifth Ave. for its activities. The Manhattan property generated more than $228 million in gross rents it received from tenants, Forrest said.

Daniel Ruzumna, a lawyer for the Alavi Foundation and 650 Fifth Ave. Co., didn’t immediately respond to a voice-mail message seeking comment on the ruling.

Forrest also ruled today that the foundation must forfeit the properties and funds in three bank accounts to satisfy judgments won by the U.S. and plaintiffs who include more than a dozen people who were victims of terrorist attacks linked to Iran, as well as their families and estates. The judge hasn’t yet ruled on how the properties and funds will be divided between the U.S. and other plaintiffs in the case who also sued Iran.

18 Plaintiffs

James Bernard, a lawyer for at least 18 plaintiffs who sued the Iranian government and entities, said in a Feb. 10 letter to the court that his clients and the government had “reached an agreement in principle” about the division of assets and property.

Bernard said in the letter that the settlement still needs final approval by the U.S. Justice Department. Bernard didn’t immediately respond to a voice-mail message seeking comment on Forrest’s ruling.

Jim Margolin, a spokesman for Manhattan U.S. Attorney Preet Bharara, whose office is representing the government’s interests in the case, declined to comment.

Steven L. Kessler, a lawyer for the family and estate of Charles Hegna, an American killed by Hezbollah gunmen at Tehran Airport in 1984, said his clients didn’t join in the settlement with the U.S.

“We’re very pleased that the court has removed Alavi and all of the Iran entities from the equation,” Kessler said in a phone interview. “We’re now hopeful that the court decides our pending motion regarding our secured interest in the 650 Fifth Ave. building, and we’ll be able to take the portion that is justly and rightfully ours.”

Kessler said his clients first filed suit against Iran more than 20 years ago and had obtained a lien against 650 Fifth Avenue, which he said is worth more than $510 million.

“We are hopeful that his family, which went ahead and filed an appropriate lawsuit and judgment more than 20 years ago will get some closure on this when the motion is decided by the court and will be properly compensated,” Kessler said.

The case is In re 650 Fifth Avenue and Related Properties, 08-cv-10934, U.S. District Court, Southern District of New York (Manhattan).

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.