Prosecutors tie Iran, U.S. assets

By Glenn Kessler
Washington Post Staff Writer
Friday, November 13, 2009; A01

Federal prosecutors on Thursday moved to seize several U.S. assets allegedly controlled by entities linked to the government of Iran, including a mosque and Islamic school in Potomac, land in Prince William County and a Manhattan skyscraper.

Prosecutors described an intricate web of ties allegedly connecting the properties to an Iranian bank that has been identified as a key financier of Tehran's nuclear and ballistic missile programs and possibly acts of terrorism. At the center of that web, they said, is a New-York based organization known as the Alavi Foundation, which U.S. authorities have for decades suspected of being a possible Iranian front.

The action by the U.S. attorney in Manhattan puts significant pressure on Iran to curb its links to terrorism, even as the Obama administration seeks to reach out and negotiate with the nation over its nuclear ambitions. The rare decision to seize Islamic educational and religious institutions could also heighten tensions with the Muslim world.

The Council on American-Islamic Relations expressed immediate concern, saying in a statement that "the seizure of American houses of worship could have a chilling effect on the religious freedom of citizens of all faiths and may send a negative message to Muslims worldwide," especially in the aftermath of the killings at Fort Hood, Tex.

None of the properties has been formally seized. Rather, prosecutors are formally starting the process of forfeiture, which a court must recognize. Yusill Scribner, a spokeswoman for the U.S. attorney's office, stressed that the filing would not affect tenants and occupants of the properties and that "there are no allegations of any wrongdoing on the part of any of these tenants or occupants."

Prosecutors filed a civil complaint in federal court seeking the forfeiture of hundreds of millions of dollars in assets held by the Alavi Foundation and another company allegedly used as a front by Iran. Besides the properties in Manhattan and Potomac, the complaint also targets Islamic centers in California, Queens, N.Y., and Houston. Approximately 100 acres are being targeted in the Catharpin area in Prince William.

Citing a long list of documents and e-mails they obtained, prosecutors alleged that the Alavi Foundation, which has long said it is independent of Iran, was secretly run by members of the Islamic republic's government, including a deputy prime minister and the Iranian ambassador to the United Nations.

A spokesman for the Iranian mission at the United Nations did not return phone calls seeking comment.

John D. Winter, an attorney for Alavi, said the foundation had been cooperating with the government in its investigation. "The foundation is obviously disappointed the government decided to bring this forfeiture action," he said. "We intend to litigate these claims, and we expect that when the litigation is over, we will be successful."

Prosecutors say that Alavi has made millions of dollars in improvements to the mosques it acquired in the United States, including more than $1 million since 2000 on the facility in Potomac, the Islamic Education Center.

The money -- about $4 million a year -- was generated by Alavi's 60 percent ownership of 650 Fifth Ave., a sleek Manhattan office tower that houses the flagship store of Juicy Couture. Prosecutors alleged last year that Assa Corp., which holds the 40 percent interest, is a shell company that funnels the rental proceeds through a parent company in the Channel Islands, off the coast of France, to Bank Melli, which is wholly owned by the Iranian government.

Under various laws and presidential orders, the government of Iran and related entities are prohibited from doing business in the United States without a license from the Treasury.

U.S. law enforcement and intelligence officials have long suspected that Alavi and its related institutions are vehicles through which the Iranian government keeps tabs on Iranians here, obtains data about U.S. technology, promotes Tehran's views on world affairs, provides gathering places for pro-Iran activists and channels money to U.S. academics to gain friendly readings on Iran. Indeed, a lengthy investigation by Newsday in 1995 concluded that Alavi was controlled by Iran's clerical leadership and that several officers and directors had been implicated in arms and technology shipments to Iran.

But law enforcement officials have had trouble making a case against Alavi; a federal judge in 1999 thwarted an effort by a victim of Iranian-linked terrorism to collect from Alavi because evidence suggested Iran did not exert "day-to-day control" over Alavi.

In December, however, the government began to make headway by bringing a forfeiture action against Assa. Within days, Farshid Jahedi, then-president of the Alavi Foundation, was charged with obstruction of justice after FBI agents followed him and observed him tossing torn papers from his pockets in a public trash can. FBI agents later retrieved the papers, written in Farsi and English, and determined they were related to complex transactions involving Alavi and the building. His case is pending.

Officials with the Islamic Education Center and the foundation have long asserted that they are philanthropic groups providing religious education and services. Officials at the Potomac center, a verdant six-acre campus in an affluent neighborhood, did not respond to phone calls or e-mails Thursday night.

The Islamic Education Center formally opened in 1983, and tax records showed it received $6 million for the venture from the Mostazafan Foundation of New York, which changed its name to Alavi in 1992.

In a 2007 tax form, the center said it "uses the facilities provided by Alavi Foundation at no charge. The organization pays for the repairs and maintenance of the facilities." It said the Islamic center "organizes lectures, seminars and sermons in response to public needs, religious holidays, commemorative occasions and cultural events," while a primary and secondary school educates more than 150 students.

But a longtime teacher and former assistant principal, Arlene Pater-Rov, said Thursday that contributions from the Alavi Foundation dried up since the probe became public last year. "All the teachers had to take a cut in pay when that happened because we had less money," she said, while tuition was increased.

Staff writers William Wan and Carrie Johnson in Washington, Colum Lynch at the United Nations, Karl Vick in New York and staff researcher Meg Smith contributed to this report.

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