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U.S. Seeks Assets of Islamic Foundation Thought To Be Iranian-Controlled

The 36-story building at 650 Fifth Avenue
(RFE/RL) -- U.S. federal prosecutors say they are moving to seize more than $500 million in assets of a nonprofit Muslim organization that is accused of being secretly controlled by the Iranian government.

The U.S. government also accuses the group -- known as the Alavi Foundation -- of being linked to efforts by the Iranian government to develop nuclear weapons.

The assets being targeted by prosecutors include a 36-story skyscraper in New York City as well as properties that house Islamic centers in the states of New York, Texas, Maryland, and California.

U.S. law prohibits the Iranian government and related bodies from doing business in the United States without a special license. Those laws were passed after Washington dropped all diplomatic ties with Iran following its 1979 Islamic Revolution.

Tax records show that the Alavi Foundation earned $4.5 million in rent during 2007 -- much of it from the Fifth Avenue Piaget skyscraper, built in 1978 by a company owned by the shah of Iran. Prosecutors say its ownership passed to the Iranian government after the 1979 revolution.

On its website, the Alavi Foundation declares that its mission is "to promote charitable and philanthropic causes through educational, religious, and cultural programs." The foundation's website says it does this by making contributions to nonprofit organizations within the United States that support "interfaith harmony and promote Islamic culture and Persian language, literature, and civilization."

Prosecutors in New York allege that the foundation has been illegally funneling millions of dollars in rental income through a shell company called Assa and on to Iran's state-owned Bank Melli. The United States also has claimed that Bank Melli has been involved in attempts by Tehran to develop nuclear weapons.

Preet Bharara, the U.S. attorney for the southern district of New York, said in a statement on November 12 that the Alavi Foundation's affairs have been directed for two decades by various Iranian officials -- including Iranian ambassadors to the United Nations -- in violation of U.S. laws.

Adam Goldman, a correspondent for The Associated Press who has been covering the story, says the seizures would probably be among the largest in the history of U.S. counterterrorism operations.

"This is a very complicated case and it involves a whole group of federal agencies, a front company, obviously the Iranian government,” Goldman said. “It was not an easy case to make. In the end, if the government is successful and they do seize these properties, then it is likely the sales from those seizures would be put in a forfeiture fund and, perhaps, distributed to victims of terrorism."

The United States has targeted and frozen the assets of other Iranian companies in the past, as well as U.S. and European firms that do business with them.

Some analysts say the attempt to seize the Alavi Foundation's assets could be designed to punish the Iranian government at a time when its relations with the United States are strained over Iran's alleged nuclear-weapons program.

But the Obama administration also could raise the anger of American Muslims if mosques are seized.

The takeover of mosques also would raise constitutional questions in the United States related to the freedom of religion.