TerrorismFederal judge: terrorism victims may seize Iranian-owned $500 million mid-Manhattan tower

Published 7 April 2014

Federal Judge Katherine Forrest on Friday ruled that the Iranian companies which own the 650 Fifth Avenue building in Manhattan must forfeit the property – evaluated between $500 and $700 million — to victims of terrorism who hold billions of dollars in judgments against Iran. The claimants include families who lost relatives in the 9/11 attacks and the 1983 Beirut bombing, in both of which Iran was implicated. The Iranian owners have vowed to appeal, but legal experts say the building assets could possibly be distributed while the challenge is pending.

Federal Judge Katherine Forrest on Friday ruled  that the Iranian companies which own the 650 Fifth Avenue building in Manhattan must forfeit the property to victims of terrorism who hold billions of dollars in judgments against Iran.

The victims include families who lost relatives in the 9/11 attacks and the 1983 Beirut bombing. The New York Daily News reports that the victims claimed the $500 million midtown tower after  Federal Judge George Daniels decided in 2011 that Iran was partly responsible for the 9/11 attacks because it provided travel support to terrorists. The official 9/11 Commission Report details Iran’s contact with terrorists but noted that “we have no evidence that Iran or Hezbollah was aware of the planning” of 9/11.

This is an important step toward justice,” said Lynne Derbyshire, who lost her brother, Marine Corps soldier Vincent Smith. “This isn’t about putting money in my hands. It’s about taking something away from the Iranian government.”

In September 2013, Forrest ruled that federal authorities could seize the tower because of money laundering and other violations by the owners, Alavi Foundation and Assa Corporation, in addition to claims that the building was secretly owned by Iran. The tower was built in the late 1970s by a nonprofit connected to the Shah of Iran and funded by a loan from Bank Melli, Iran’s state-owned bank. The Shah’s non-profit, the Pahlavi Foundation, changed its name to the Mostazafan Foundation of New York, then to the Alavi Foundation.

The property boasts 380,000 square feet of prime real estate with tenants including retailers Juicy Couture and Godiva. Real estate experts believe the building may be worth more than $700 million, but Forrest has yet to rule on how the money or ownership would be distributed.

Lawyers involved in the case said the tower will likely be sold and the proceeds divided among the claimants, possibly in the next six months to a year. The Iranian owners have vowed to appeal, but the building assets could possibly be distributed while the challenge is pending, the lawyers said.

The U.S. Treasury Department continues to exercise tight sanctions against Iran and a number of Iranian companies and organizations.

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