Treasury says New York firm is a front for Iranian bank

Treasury says New York firm is a front for Iranian bank
PDF | Complaint: U.S. v. Assa Corp.
By Kevin G. Hall | McClatchy Newspapers
12/17/08

WASHINGTON " In the latest and perhaps most unusual attempt by the Bush administration to choke off Iran's access to the global financial system, the Treasury Department on Wednesday designated a New York real-estate partnership as a front company for Bank Melli, one of Iran's biggest state-owned banks.

In a related action, the acting U.S. attorney for the Southern District of New York filed a civil complaint Wednesday seeking a forfeiture of the alleged straw company's 40 percent ownership stake in a 36-story building on Fifth Avenue near Rockefeller Center. The U.S. government had already seized more than $3.1 million in two bank accounts in the U.S.

The Treasury alleged in a statement that Bank Melli had established Assa Corp. as a straw company in order to hold the ownership stake in the prime real estate.

The complaint, built largely from e-mails dating back to 2003, offers a rare detailed look at the Bush administration's longstanding charges that Iran is using the global financial system to fund what it says are nuclear weapons ambitions.

In a statement late Wednesday, Treasury alleged that Assa Corp. funneled rental income it received from its Manhattan tower to the British-controlled Channel Islands. From there, the money was transferred back to Bank Melli, which the Bush administration blacklisted globally last year for allegedly helping finance Iran's military and intelligence agencies.

Assa is a co-owner of a 36-story building at 650 Fifth Ave. It shares ownership of the building, the Treasury allegation said, with the Alavi Foundation of New York. Their partnership is called the 650 Fifth Avenue Company.

Treasury's announcement did not say how long Assa had been invested in the partnership, nor its ownership stake. That information came in the much more detailed civil forfeiture complaint filed Wednesday by the Office of the U.S. Attorney for the Southern District of New York.

Agents in October carried out federal warrants on Assa's bank deposits, freezing about $1.9 million from an account with Citibank and $1.2 million from an account with J.P. Morgan Chase.

Treasury officials declined requests for comment. Stuart Levey, the agency's point man for sanctions, hinted on CNN late Wednesday that big sums had been sent to Bank Melli.

"I am not in the position to give that kind of figure," Levey said, suggesting it was a large amount because "this is a large commercial property on Fifth Avenue."

The complaint, brought by acting U.S. Attorney Lev Dassin, said that the tower was built in the 1970s, before the Iranian revolution, by the Pahlavi Foundation, a nonprofit organization tied to the former Shah of Iran. Bank Melli put up $42 million, it said.

After the shah's overthrow, the foundation was renamed, and then renamed again to the current Alavi Foundation " Assa's business partner.

The complaint alleges Assa's straw owners are Iranian citizens Davood Shakeri and Fatemeh Aghamiri, and said each had a 50 percent stake in Assa Co. Ltd. and represented the interests of Bank Melli. Assa allegedly had a single U.S. employee, a naturalized Iranian citizen born in India named Mohammad Hassan Dehghani Tafti.

Tafti, prosecutors said, represented Assa in the U.S. since 1999, leaving briefly when his work visa expired. He re-entered under a special business visa in 2003 and 2008 to work as a mortgage broker and mortgage market analyst.

Assa's business profile on the Web site Manta.com describes it as having six employees and annual sales of $450,000 " an unlikely sum for a 36-story office tower in one of the more upscale sections of Manhattan.

Real Estate Weekly reported in May that the company had hired Kathleen Murphy, an adjunct professor in commercial real estate management at New York University, as its director of management services.

Reached by phone, Ms. Murphy declined comment and said she was trying to learn exactly what had occurred.

"I'm afraid to say anything," she told McClatchy, adding when asked that she has no ties to Iran herself. "No, I don't call Tehran on a regular basis."

According to e-mails cited in the civil complaint, Tafti took orders from Mohsen Ghadimipour, whom prosecutors allege heads up Bank Melli's overseas banking efforts. These e-mails included discussions on where to establish Assa abroad to prevent shareholders from having to pay taxes the straw company.

Neither Treasury not the U.S. attorney's office gave any indication of whether Tafti had been arrested, detained, deported or had become a cooperative witness.

The Treasury's action didn't punish the Alavi Foundation, or go after its 60 percent stake in the partnership.

Merely by mentioning Alavi, which has been under off-and-on again investigation by the U.S. government for its alleged ties to Iran, however Treasury raised the profile of the charitable foundation.

Matthew Levitt, the director of a counterterrorism research program at the Washington Institute, a policy organization in Washington, said a former CIA deputy director testified in a 2002 affidavit that Alavi was closely tied to the Iranian government.

ON THE WEB

Treasury statement
http://www.treas.gov/press/releases/hp1330.htm

Counterterrorism blog views on Assa
http://counterterrorismblog.org/