Schumer: Seizure Of Midtown Building Sends Strong Message To Iran

NEW YORK (CBSNewYork) -- U.S. Sen. Charles Schumer (D-N.Y.) said Wednesday that the forfeiture of a Midtown Manhattan office building allegedly controlled by the Iranian government shows the U.S. means business in sanctions against Iran.

As CBS 2 Political Reporter Marcia Kramer reported, the seizure could go down as the largest terror-related forfeiture in U.S. history. On Tuesday, a federal judge ruled that the U.S. government can seize the 36-story building at 650 Fifth Ave. near Rockefeller Center on the grounds that it is being used to funnel money to Iran.

Prosecutors said the building is operated by two companies which serve as fronts for the government of Iran, the Alavi Foundation and Assa Corp.

The Alavi Foundation has been providing numerous services to the Iranian government, including managing the building for the Iranian government, running a charitable organization for the Iranian government, and transferring funds from 650 Fifth Avenue Company to Bank Melli Iran, a bank wholly owned and controlled by the government of Iran, prosecutors said in a statement.

LINK: Read Judge's Opinion (pdf)

"This is a thunderclap of an action – it is just great," Schumer said. "It sends a real strong signal to the Iranian government that we are serious about sanctions and squeezing them economically."

Manhattan U.S. District Judge Katherine Forrest said the owners of the building sent rent money valued between $500 million and $700 million to Bank Melli Iran.

The judge determined the companies violated the Iranian Transactions Regulations under the International Emergency Economic Powers Act (IEEPA) and federal money laundering statutes.

"It sends a strong signal to any of those who might want to play footsie with the Iranian government and funnel them money, and I just hope that law enforcement officials across the country do the same kind of thing," Schumer said. "This is not just an ordinary seizure. This is big, big stuff."

Once the building is sold, its assets can be distributed to relatives of the victims of Iranian-sponsored attacks, which are said to include the Sept. 11, 2001 attacks and the bombing of the Marine Corps barracks in Beirut in 1983.

Schumer said the move sends a message to Iranian leaders that the U.S. is serious about the sanctions it is imposing to stop Iran from building a nuclear bomb.

"They need every dollar of currency that they can get. They need every dollar of wealth they can get. They're being squeezed," Schumer said, "and an action like this goes right to the top in Iran and says to their leadership, 'Hey, maybe we ought to back off nuclear weapons.'"

According to the U.S. Attorney's office, the building was constructed in the 1970s by the Pahlavi Foundation, a non-profit organization operated by the Shah of Iran to pursue Iran's charitable interests in the United States. A substantial loan from Bank Melli financed the construction of the building, prosecutors said.

Iranian government officials were involved in the decision to convert Bank Melli's mortgage on the building into a partnership interest in 650 Fifth Avenue Company in the late 1980s, according to prosecutors.

Ironically, the judge's decision on the building came just days before the United Nations General Assembly is set to convene in New York next week.

There has been some speculation that President Barack Obama might attempt to meet informally with new Iranian President Hassan Rouhani to find a diplomatic solution to the standoff over the Iranian nuclear weapons program.

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