SCHOOL OWNERS LINKED TO IRAN?

The non-profit organization that owns a Woodside property housing an Islamic school, institute and mosque has allegedly been doing business in the U.S. on behalf of the Iranian government, according to federal prosecutors who announced last week legal action seeking to seize the site.

The U.S. Attorney for the Eastern District of New York, Preet Bharara, announced that the federal government has filed a civil forfeiture action against properties and assets owned by the Alavi Foundation, which is accused of acting as a “front” for the Iranian government.

Sanctions imposed by the United States dating back to the Clinton administration prohibits the Iranian government from conducting business within the United States over the Middle Eastern nation’s pursuit of weapons of mass destruction. According to U.S. Attorney Bharara, Iran allegedly used the Alavi Foundation and another group—the Assa Corporation—to purchase, maintain and collect rent from properties in New York, California, Texas and other parts of the country.

A similar forfeiture action was launched by the United States against the Assa Corporation in December 2008.

One of the locations owned by the Alavi Foundation and named in last week’s civil forfeiture action is 55-11 Queens Blvd. in Woodside, which is occupied by the Razi School, an Islamic school for children from prekindergarten through 12th grade; the Islamic Institute of New York and the Imam Ali Mosque.

It was noted that neither the Razi School, Islamic Institute of New York and Imam Ali Mosque—which rent the property from the Alavi Foundation— have been charged with any wrongdoing related to the government’s case.

Federal prosecutors are also seeking to seize a 36-story office tower at 650 Fifth Ave. in Manhattan owned by the Alavi Foundation in conjunction with the Assa Corporation. A spokesperson for the U.S. Attorney told the Times Newsweekly that all tenants are free to continue using the properties named in the forfeiture action.

As noted, the federal government aims to take control of the Woodside and Manhattan properties owned by the Alavi Foundation as well as other assets it controls, including several bank accounts.

According to the indictment, the foundation provided a number of charitable and business services to the Iranian government over the last 20 years. In addition to managing the 650 Fifth Ave. office tower, it was noted that the non-profit group also transferred its funds to Bank Melli, the national bank of Iran.

These activities are in violation of the International Emergency Economic Powers Act, which empowers the president of the United States— through an executive order—to prohibit business transactions with any nation due to a national emergency.

President Bill Clinton issued three executive orders in 1995 and 1997 implementing trade restrictions and embargoes against Iran over its pursuit and proliferation of nuclear weapons and other WMDs.

Federal law enforcement sources stated that a forerunner to the Alavi Foundation, the Pahlavi Foundation, took control of the office tower at 650 Fifth Ave. during the 1970s. During that time, the non-profit group was operated by the Shah of Iran in order to pursue charitable interests in the United States.

Following the Iranian revolution of 1979, it was noted, the Islamic Republic of Iran created the Bonyad Mostazafan, an agency designed to take possession of and manage any government owned property, including interests belonging to the ousted Shah and the assets of the Pahlavi Foundation.

Reflecting the change in leadership in Iran, the Pahlavi Foundation formally changed its incorporated name in the U.S. in 1980 to the Mostazafan Foundation of New York, which would be rebranded years later as the Alavi Foundation.

In 1989, federal prosecutors said, the foundation formed a partnership with Bank Melli to own and operate 650 Fifth Ave. This was allegedly done to allow both parties to avoid paying federal taxes on rental income collected from the building’s tenants.

Bank Melli’s involvement in the building’s management, however, was disguised through the formation of two shell companies, it is alleged. Later, the bank cancelled its loan on the building when a 35 percent stake in the office tower was transferred to the Assa Corporation.

According to the government, the decision to cancel the mortgage was made by the bank following discussion and approval by high-level members of the Iranian government. Thereafter, the lawsuit charges that Iranian leaders continued to oversee the Alavi Foundation’s operations, including the removal of the organization’s president in 1989 following a dispute with the Iranian Ambassador to the United Nations.

Board members of the organization allegedly met with the Iranian ambassador and a former Iranian government official in October 2007 to discuss various issues related to the office tower’s management and charitable services provided by the group.

When the federal government began investigating the non-profit, it is alleged that Alavi’s former president, Farshid Jahedi, destroyed a number of documents subpoenaed by the U.S. Attorney in December 2008 for presentation to a grand jury.

Regarding the Woodside property, federal law enforcement sources said the Alavi Foundation purchased one lot of the three lots occupying 55-11 Queens Blvd. in 1991; the remaining lots were acquired in 1997. The more than $2.5 million acquisition of the first lot was allegedly financed by the Bank Saderat Iran; the loan was satisfied in 1998.

Between March 1995 and March 1998, prosecutors said, the foundation spent more than $8.6 million on land and other improvements to the site, as well as an additional $2 million between February 1999 and March 2008 on various construction projects. According to the complaint, the foundation reported receiving nearly $600,000 in rental income between the 1999 and 2007 tax years.

The civil forfeiture action is being led by Assistant U.S. Attorneys Sharon Cohen Levin, Anna Arreola and Michael D. Lockard.