“Manhattan Skyscraper Linked to Iran Can Be Seized by U.S., Jury Finds,”
S.D.N.Y. * Claimant and another company were the co-owners of an office building on Fifth Avenue in New York and other property. The Government alleged that the co-owner was a front for the Government of Iran, and that when Claimant provided services to that company, it violated various Executive Orders and Iranian Transaction Regulations (ITRs) issued pursuant to the International Emergency Economic Powers Act (IEEPA).
The Government filed a civil forfeiture action against the building and related properties, alleging that they were the proceeds of the IEEPA violation and property involved in promotion money laundering. The district court granted summary judgment for the Government, and Claimant appealed. In re 650 Fifth Ave. & Related Props., 2014 WL 1516328 (S.D.N.Y. Apr. 18, 2014).
The Second Circuit reversed, holding that there was a triable issue of fact regarding Claimant’s knowledge that its co-owner was a front for Iran. In re 650 Fifth Ave. and Related Properties, 830 F.3d 66 (2nd Cir. 2016) (September 2016 Money Laundering and Forfeiture Digest). Accordingly, the case went to trial.
On June 29, 2017, a jury in the Southern District of New York found by a preponderance of the evidence that the Government had met its burden regarding Claimant’s knowledge and thus had established the IEEPA violation and its right to the forfeiture of the property.
The building occupies a prime location across from St. Patrick’s Cathedral and adjacent to Rockefeller Center in mid-town Manhattan and is likely worth hundreds of millions of dollars. The Government plans to allocate the forfeited funds to the victims of terrorism. SDC
This article is excerpted from the July 2017 issue of the Money Laundering and Forfeiture Digest.