As members of the United Nations prepared to descend upon Manhattan’s East Side, the U.S. government was moving to seize a building only 13 blocks away. On Monday, September 16, 2013, following a civil complaint originally filed in 2008 by the Manhattan U.S. Attorney’s Office, the U.S. District Court for the Southern District of New York cleared a path for the U.S. government to seize a Manhattan office building located at 650 Fifth Ave., New York, in what U.S. Attorney Preet Bharara called the “largest-ever terrorism-related forfeiture.”
The building, owned by the 650 Fifth Avenue Company (“650 Fifth”), is a partnership between the Alavi Foundation (“Alavi”), a New York not-for-profit corporation, and Assa Company, Limited (“Assa”), a corporation domiciled in the Channel Islands with a legal entity incorporated in New York.
U.S. sanctions on Iran require U.S. persons, including U.S. financial institutions, to block all property and interest in property of the government of Iran, including entities owned or controlled by the government of Iran. The court found that Assa is a front company for Bank Melli, an Iranian financial institution long ago determined by the U.S. government to be owned and controlled by the government of Iran, and on the basis of that finding, authorized the U.S. government to seize the property. Additionally, the court authorized the U.S. government to seize several bank accounts held in the name of 650 Fifth. There has been no indication whether the Office of Foreign Assets Control (“OFAC”) will pursue enforcement against other U.S. companies that may have engaged in transactions with 650 Fifth.
When considered in conjunction with OFAC’s recent enforcement and $750,000 fine against a Turkish trading company for processing funds through U.S. financial institutions for the benefit of the government of Iran, it is clear that the U.S. government intends to continue vigorous enforcement of the OFAC sanctions in the financial services industry in the United States and abroad.