In what the Obama administration is calling the largest terrorism-related forfeiture on record, the federal government has been authorized to seize a New York City skyscraper linked to the Iranian regime.

The building in question, located at 650 Fifth Ave. in Manhattan, is owned by the Alavi Foundation and Assa Corp.

The U.S. Attorney based in Manhattan, Preet Bharara, argued before a federal judge that Assa Corp. was nothing more than a front for Bank Melli, which was said to be a front for the government of Iran.

Both the foundation and the corporation were accused of money laundering violations, according to Bharara.

U.S. District Judge Katherine B. Forrest agreed with the government’s case, and ordered it to take possession of the 36-story building.

Bharara called it “the largest-ever terrorism-related forfeiture.”

Following the ruling, the foundation issued a statement that read: “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.”

The Alavia Foundation has been around since the Iranian revolution of 1979, and was originally a non-profit group called the Pahlavi Foundation, operated by the Shah of Iran. The foundation currently says it is dedicated to “promoting the teaching of Islamic Culture, Persian Language, Literature and Civilization.”

The U.S. Department of Justice claims that the Alavia Foundation partnered with Bank Melli for the purpose of evading real estate taxes. The case was first filed in 2008, and a year later the foundation’s president pleaded guilty to obstructing justice by destroying evidence.

The government plans to sell the skyscraper, which had previously been the site of the 19th-century high-end department store, De Pinna. The structure currently has an estimated value of $500 million to $700 million, according to the New York Daily News. Proceeds will go toward helping the victims of Iranian-sponsored terrorism.

It was unknown what the forfeiture and eventual sale means for the building’s tenants, which include offices belonging to Citigroup and Starwood Hotel & Resorts, owner of Sheraton and Westin hotels.

-Noel Brinkerhoff

To Learn More:

Manhattan U.S. Attorney Announces Court Judgment Finding Midtown Office Building Secretly Owned And Controlled By Government Of Iran Subject To Forfeiture For Violations Of The Iranian Transactions Regulations And Money Laundering Offenses (U.S. Attorney’s Office Southern District of New York)

Federal Government to Seize NYC Skyscraper Tied to Iran (by Melanie Eversley, USA Today)

Justice Dept. to Seize New York Skyscraper Allegedly Owned by Iran (Agence France-Presse)

Court Orders U.S. Defense Contractor to Pay Hefty Interest On top of $2.8 Million Debt … to Iran(by Noel Brinkerhoff, AllGov)

U.S. Court Supports Iran…about Artifacts in Chicago Museums (by Noel Brinkerhoff and David Wallechinsky, AllGov)