May 21, 2017
Dear Brothers and Sisters Salaam Alaikum;
With a trial scheduled to begin on May 30, 2017 in the case In Re 650 Fifth Avenue and Related Properties, we wanted to provide you an update on the status of the litigation. The Foundation’s trial team, which includes lawyers from the firms of Debevoise & Plimpton and Patterson Belknap Webb & Tyler, will be trying the case in the U.S. District Court for the Southern District of New York before Judge Katherine B. Forrest. The Board has hired these firms in an effort to protect the Foundation’s properties from forfeiture.
As you may know, this case has gone on for many years. After years of litigation, in September 11th 2013, Judge Forrest granted summary judgment to the Government in a series of orders. Her orders forfeited the building at 650 Fifth Avenue, as well as 89% of the Foundation’s other properties, to the Government. The Foundation appealed this decision and was successful: the Second Circuit Court of Appeals reversed Judge Forrest’s decision as to the Foundation’s 60% interest in the building and its interests in the other properties. (The other 40% of the building was owned by Alavi’s former partner, Assa; that 40% has been forfeited to the Government, and was not the subject of the appeal).
After it reversed the summary judgment decision, the Court of Appeals sent the case back to Judge Forrest for further proceedings. Now, two separate, simultaneous trials are set to begin on May 30, 2017. The first is the trial of the Government’s civil forfeiture case to a nine-person jury. The Government will seek to prove that the Foundation violated the International Emergency Economic Powers Act (IEEPA) and money laundering statutes on two separate theories: first, that the Government of Iran allegedly controlled the Foundation between 1995-when the U.S. put in place sanctions against Iran-and 2008, and second, that even if the Foundation was not controlled by the Government of Iran during this time period, its partner in the building, Assa, was a front company for Bank Melli of Iran, and the Foundation allegedly knew about that relationship at the time.
Separately and at the same time, the Foundation’s lawyers will defend the Foundation against the claims of private plaintiffs who are judgment creditors of Iran. These judgment creditors allege that the Foundation is an “agency or instrumentality” of Iran, and that as a result, they can collect against the Foundation’s assets to satisfy judgments they hold against the government of Iran. This trial will be a bench trial, meaning that it will be tried to Judge Forrest herself, not to a jury. The bench trial will address claims under statutes known as the Terrorism Risk Insurance Act (TRIA) and the Foreign Sovereign Immunities Act (FSIA). We intend to vigorously dispute the claims of both the Government and the judgment creditors at the upcoming trials.
Both the Government and the judgment creditors are seeking to obtain the Foundation’s 60% share in the building at 650 Fifth Avenue as well as the Foundation’s other properties-Islamic Education Centers, schools and clinics in Texas, New York, California, Maryland, and land the Foundation owns in Virginia. If the Government and the judgment creditors were to win their cases, they would be entitled to seize and take ownership of these properties. However, in that instance, the Foundation would have the opportunity to appeal again to the Second Circuit. Although judges have discretion in this area and the ultimate determination as to the timing of forfeiture would be left up to Judge Forrest, the Foundation’s lawyers would seek to stay forfeiture of the building and other properties pending the appeal.
The Foundation’s Board of Directors and its trial counsel are working vigorously to defend these claims and the Foundation’s properties, and the interests of the members of our community, against the Government’s and the judgment creditors’ allegations, and to prepare for the upcoming trial. We greatly appreciate the community’s continued support in these efforts.
The proceedings in court are open to the public and you may attend any day that you wish with no prior arrangement. Your presence at the court sessions will certainly help you understand the difficult battle that the Foundation is facing in its effort to continue with its charitable goals. Importantly, your presence will showcase your moral support for the continuation of the Foundation’s mission.
Please feel free to contact the Foundation at [email protected] for further details.