The Real Deal New York

Judge rejects Alavi pitch for new trial over 650 Fifth Avenue

Iranian nonprofit wanted to limit forfeiture
By Kathryn Brenzel | September 01, 2017 04:40PM

650 Fifth Avenue and Supreme Leader of Iran Ali Khamenei (Credit: 650 Fifth and Getty Images)

A Manhattan Federal Court judge rejected the Alavi Foundation’s request for a new trial Friday, dismissing the nonprofit’s argument that minimal proceeds related to 650 Fifth Avenue were tied to Iran.

Alavi had asked the court to either order a new trial or set aside the jury’s June verdict, which paved the way for the federal government to seize Alavi’s 60 percent stake in the Fifth Avenue tower. The nonprofit argued that the forfeiture should be limited to 11.4 percent of the building’s value because any proceeds it received in relation to controlling 650 Fifth on behalf of Iran were limited to management fees.

The jury had found that Alavi was controlled by Iran and laundered money through its partnership with the Assa Corporation, a shell company for an Iran-controlled bank. Alavi denied knowing about Assa’s Iran connection and called the verdict “excessive and grossly disproportional to the offense.”

Judge Katherine Forrest, however, wasn’t swayed by Alavi’s arguments. She said that 650 Fifth Avenue was at the center of a money laundering scheme that circumvented U.S. sanctions against Iran.

“The evidence amply demonstrated that the conduct at issue in this trial was the product of planned, carefully executed judgment,” Forrest wrote. “[Alavi was] aware of Iranian interest, ownership and control, and they proceeded to conduct themselves in a way designed to maximize protections for Iran, in the face of clear and well-understood laws that made those actions unlawful.”

She also found that delaying the sale of the 395,000-square-foot, 36-story property (SL Green and Jeff Sutton own the retail component at the base, where Nike signed a record-breaking lease in November) would potentially impact the value of the asset, subjecting the sale’s recipients to “lengthy additional economic risk.” The proceeds are expected to go toward victims of Iran-sponsored terrorism.

Representatives for Alavi didn’t immediately return requests seeking comment.