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In re 650 Fifth Avenue & Related Properties

United States District Court, S.D. New York

May 15, 2017

IN RE 650 FIFTH AVENUE AND RELATED PROPERTIES

          OPINION & ORDER

          KATHERINE B. FORREST, District Judge.

         This is a civil forfeiture action brought by the United States of America (the “Government”) seeking forfeiture of properties and assets owned by Assa Company Ltd. and Assa Corporation (together, “Assa”), [1] the Alavi Foundation (“Alavi”), and their partnership the 650 Fifth Avenue Company (“650 Fifth Ave. Co.” or the “Partnership”) (together with Alavi, “Claimants”). The Government seeks forfeiture on the grounds that Claimants were controlled by or knowingly provided services to the Islamic Republic of Iran (“Iran”), that Claimants' properties and assets constitute or are traceable to proceeds of criminal activity, and/or that Claimants' properties and assets were involved in money-laundering transactions.

         The most significant asset as to which forfeiture is sought is a commercial building located at 650 Fifth Avenue in New York, New York (the “Building”) owned by the Partnership in which Assa has a 40% interest and Alavi has a 60% interest. There have been assertions that the Building alone is valued at over a billion dollars. The Government intends to use any forfeiture proceeds obtained to satisfy judgments held by victims of terrorism (or their estates) perpetrated in whole or in part by Iran.

         This action has been vigorously litigated for a number of years.[2] Trial was previously set to commence on September 9, 2013. On the eve of trial, the Court indicated that it intended to grant summary judgment to plaintiffs and adjourned the trial. The Court issued its Opinion & Order on September 16, 2013. (ECF No. 865.) That decision was based primarily on two determinations: First, the Court determined that Assa was (and is) a front for the Government of Iran and violated the International Emergency Economic Powers Act (“IEEPA”), certain Iranian Transaction Regulations (“ITRs”) issued by the U.S. Treasury banning the provision or export of services to Iran, and federal money-laundering statutes. Second, the Court determined that Claimants also violated IEEPA and the ITRs because it was conceded that Claimants provided services to Assa.

         The Second Circuit affirmed this Court's decision granting forfeiture of Assa's interest, but reversed and remanded with regard to certain other issues concerning Claimants. See In re 650 Fifth Ave. & Related Properties, 830 F.3d 66 (2d Cir. 2016). There is no dispute that Alavi is a charitable foundation established by the Government of Iran prior to the 1979 Iranian Revolution, the work of which involves, inter alia, Muslim educational and religious activities. 650 Fifth Ave. Co. is a partnership that Alavi and Assa established contemporaneously with Assa's incorporation. Despite its name, 650 Fifth Ave. Co. is not a corporate entity but rather is a partnership organized under New York law.

         Following the Second Circuit's decision, the issues remaining to be tried include whether Alavi-which, as has been established, knew at the time of its incorporation and for a period thereafter that Assa was controlled by Iran- maintained that knowledge subsequent to 1995.[3] In 1995, President Clinton issued a series of Executive Orders pursuant to the IEEPA formally declaring the Government of Iran a threat to national security and imposing broad financial sanctions. See Exec. Order No. 12, 957, 60 Fed. Reg. 14615 (Mar. 15, 1995); Exec. Order No. 12, 959, 60 Fed. Reg. 24757 (May 6, 1995). If Alavi had the requisite “post-1995 knowledge, ” the property and assets at issue may be subject to forfeiture;[4] if it did not, this case is at an end. A trial on the remaining liability issues is scheduled to commence on May 30, 2017.

         In advance of that trial, certain pretrial motions must be resolved. The most significant is a motion by Claimants to suppress a large volume of documentary evidence obtained following the execution of a search warrant on December 19, 2008. Commencing on March 17, 2017, and continuing over the course of four days, the Court held a suppression hearing. Claimants have expended substantial resources on this motion; during the suppression hearing, Alavi and the 650 Fifth Ave. Co. were represented in the courtroom by more than eight, and at times as many as twelve, lawyers from two major law firms. The Court heard from eight witnesses; received over ninety documents into evidence; and also received stipulations from the parties. The evidence concerned, inter alia, the status of the investigation prior to December 2008, events leading up to the execution of the warrant, the search and seizures on the day of execution, and the continued review of seized materials thereafter. While the Court reviews the facts relating to these events in some detail below, a summary is helpful at the outset.[5]

         On December 19, 2008, agents from the Federal Bureau of Investigation (“FBI”) obtained a warrant to search offices and a storage space located at 500 Fifth Avenue, New York, New York used by Alavi and the 650 Fifth Ave. Co. The warrant was executed the same day. As anticipated in advance, the premises searched had many documents responsive to the warrant, and ultimately several hundred boxes of records were seized. In addition, and as provided for in the warrant, a number of computers were seized. The seized materials were subsequently reviewed and it was determined that a substantial volume were either not probative of the issues under investigation or could otherwise be returned to Claimants. Those records were returned on a rolling basis.

         The Second Circuit has determined that the warrant issued on December 19, 2008, was constitutionally deficient insofar as it lacked particularity as to the crimes at issue. See In re 650 Fifth Ave., 830 F.3d at 99-101. Information relating to those crimes was contained in an affidavit presented to the issuing magistrate judge (the Honorable Theodore H. Katz), but that affidavit was not specifically incorporated by reference into the warrant itself. See id. at 101. This Court is now tasked with determining whether, given this constitutional deficiency, and in light of the totality of the circumstances, suppression is appropriate.

         For the reasons set forth below, the Court concludes that suppression is not warranted. Indeed, suppression under the circumstances presented here would serve no significant salutary purpose but would prevent the use of obviously relevant evidence at trial.

         I. FINDINGS OF FACT

         The Court makes the following findings of fact by a preponderance of the evidence.

         A. The Investigation of Alavi and Assa Prior to December 19, 2008

         In 2006, Counter-Terrorism Squad 7 (“CT-7”) in the FBI's Counterterrorism Division in New York opened an investigation of Alavi, Assa, and 650 Fifth Ave. Co. (March 2017 Suppression Hearing Transcript (“Tr.”) at 24:23-25:20 (Ennis), ECF No. 1526.) In approximately the third quarter of 2006, Special Agent George Ennis was assigned as case agent for the investigation. (Tr. 25:19-22 (Ennis).) He remained case agent until he was promoted in late 2009. (Id. 27:25-28:21 (Ennis).) Ennis testified live at the suppression hearing, and the Court found him credible and earnest.[6] The investigation involved possible criminal violations. Two Assistant U.S. Attorneys (“AUSAs”) from the Criminal Division for the U.S. Attorney's Office for the Southern District of New York (“U.S. Attorney's Office”), Harry Chernoff and Eric Snyder, were assigned to work on the investigation. (Id. 354:1-6 (Chernoff).) Only in 2008 were AUSAs from the U.S. Attorney's Office's Asset Forfeiture Unit (“Forfeiture Unit”) assigned to perform their review of the matter. (Id. 354:5-13 (Chernoff).)

         The Court found Chernoff to be a highly credible witness. He was thoughtful and careful with his answers and displayed candor. Chernoff testified that among the possible crimes that were being investigated at the outset were violations of the IEEPA and a money-laundering conspiracy. (Id. 354:21-355:2 (Chernoff).) The money-laundering investigation concerned not only possible IEEPA violations (and a conspiracy to launder its proceeds) but also a tax conspiracy. (Id. 357:2-15 (Chernoff).) The IRS was also involved in the investigation as a result. (Id. 357:12- 14 (Chernoff).) Chernoff testified that as part of this investigation into possible conspiracies, they were investigating acts in furtherance of a conspiracy outside of the date of the applicable statute. (Id. 360:5-8 (Chernoff).) This was particularly relevant to the conduct at issue in the violations of the IEEPA, which was only enacted in 1995; according to Chernoff, the criminal investigation involved events that predated 1995 in order support the conspiracy allegations. (Id. 359:23-25 (Chernoff).) As discussed below, Chernoff's testimony in this regard was corroborated by Ennis and the then-chief of the Forfeiture Unit, Sharon Cohen Levin.

         As case agent, Ennis was responsible for all aspects of the investigation: administrative, tactical, and investigative. (Id. 25:23-26:1 (Ennis).) He was “in charge” of the case and had responsibility for the case file. (Id. 25:24-26:3 (Ennis).) In 2007, Special Agent George Alexander was assigned to act as his co-case agent. (Id. 26:9-10, 26:24-27:2 (Ennis).) A number of other agents from CT-7 as well as Counter-Terrorism Squad 9 (“CT-9”) assisted in the investigation. (See id. 27:11-21, 130:15-22 (Ennis).)

         The investigation focused on the relationship between Alavi, Assa, and the Government of Iran. This included the circumstances surrounding a 1989 transaction in which Alavi transferred its 100% interest in the Building, which was subject to a Bank Melli Iran mortgage, to the newly formed partnership between Assa and Alavi, the “650 Fifth Ave. Company.”[7] Assa contributed over $40 million to 650 Fifth Ave. Co. and, in exchange, received a 35% interest (later modified to 40%) in 650 Fifth Ave. Co. As part of this set of transactions, Bank Melli, which ultimately owned Assa, cancelled the mortgage it held on the Building.

         Early in the 2006 investigation, the FBI obtained information and documents/records from a confidential source who had served as a board member of Alavi from 1982 to 1991. (See Tr. 48:8-15, 147:7-22 (Ennis); Claimants' Exhibit (“CLX”) D at 1.) The source stated that Alavi was controlled by Iran and that it received revenue from a building located on Fifth Avenue in New York. (See CLX D at 2.) In the course of the investigation, agents also interviewed a number of witnesses. Among these were Gholamreza Rahi, a former Bank Melli Iran official; Mohammad Dehghani Tafti, who at the time was Assa's sole officer, and Mohammad Geramian, who was Alavi's President from approximately 1992 until 2007. (Tr. 49:20-55:10 (Ennis).) In February 2008, as a result of a search warrant issued by the New York State Supreme Court, the FBI also obtained documents from a residence in Queens, New York that was owned by Bank Melli Iran. (Id. 113:21-25, 128:2-9 (Ennis); see GX 9 ¶ 82.)

         In the fall of 2008, the then-chief of the Terrorism and National Security Unit of the U.S. Attorney's Office discussed the investigation with AUSA Sharon Levin, who was then chief of the Forfeiture Unit.[8] (Id. 699:25-14, 700:4-5 (Levin).) At this time, Levin had over fifteen years of experience as an AUSA in the Southern District of New York. She became Chief of the Forfeiture Unit in 1996. She testified live at the suppression hearing. The Court found her highly credible and reliable, and she exhibited a natural and thoughtful demeanor. The Court credits the entirety of her testimony and feels very comfortable placing great reliance on it.

         Levin testified that, as of the time she was assigned to work on the forfeiture matter at issue here, there was a concern that funds held by Assa in the United States (which were generated from rental income from the Building) were at risk of being transferred overseas for the benefit of Bank Melli Iran. (Id. 701:1-25.) She testified credibly that after being familiarized with the investigation to date, she believed there was a basis to seize the funds from rental income generated by the Building at 650 Fifth Avenue as well as the Building itself. (Id. 702:18-25, 703:1-6 (Levin).) Levin knew that the criminal investigation was also continuing. (Id. 705:13-15 (Levin).)

         Thereafter, Levin and the Forfeiture Unit assisted in preparing an application for seizure of these accounts as proceeds of violations of the IEEPA and property involved in money-laundering transactions; the Forfeiture Unit also began exploring the possible forfeiture of the Building. (Id. 701:1-703:13 (Levin).) The seizure warrants were issued shortly thereafter, in late October 2008. (See id. 704:17-19 (Levin).) Levin testified that this seizure started a “clock” at the U.S. Attorney's Office and that they needed to file the civil forfeiture action within a relatively short time thereafter. (Id. 709:11-16 (Levin).)

         Between 2006 and prior to the date on which the first civil forfeiture action was filed (December 17, 2008), the investigation included interviews of confidential sources; interviews with other witnesses; subpoenas and review of bank records; phone records; physical surveillance; and consensual monitoring by the confidential source. (Id. 45:6-46:1 (Ennis).) In addition, emails were obtained through the District Attorney's office. (Id. 45:19-24 (Ennis).)

         According to Ennis, before the civil forfeiture complaint was filed on December 17, 2008, the FBI concluded that both Assa and Alavi were controlled by the Government of Iran. (Id. 46:12-18 (Ennis).) The FBI viewed Bank Melli Iran as owning and controlling Assa, Alavi as aware that Bank Melli Iran owned and controlled Assa, and Alavi itself as subject to the ultimate supervision and control of the Government of Iran. (Id. 49:20-55:10 (Ennis).) Ennis and his team had also developed information prior to December 2008 that supported two purposes of the 650 Fifth Ave. Co. partnership: to eliminate a tax burden, and to hide the fact that both Alavi and its partner were controlled by the Government of Iran. (Id. 47:3-11 (Ennis).) Ennis also learned through his investigation (and prior to December 2008) that the Alavi Foundation was a “wholly owned vehicle of the Government of Iran. It was used to perpetuate its objectives on the United States.” (Id. 47:19-21 (Ennis).) In addition, the control by the Government of Iran related to “all aspects of any major decisions . . . any decision where funding was going to go, any decision on personnel, members of the board, or anything of import was all either ordered from Tehran or approved by Tehran.” (Id. 47:25-48:5 (Ennis).) Ennis testified credibly that prior to December 2008, interviews with witnesses, physical records, as well as surveillance of members of the Alavi Foundation and officials from the Government of Iran supported these conclusions. (Id. 48:10-22 (Ennis).) In fact, Jahedi, Alavi's president, had been seen meeting with the Iranian Ambassador to the United Nations. (Id. 49:1-3 (Ennis).) Email traffic between members of the Alavi Board and the Iranian mission or Iranian Government further supported these conclusions. (Id. 49:4-8 (Ennis).) During interviews (the last of which occurred in the fall of 2008) with Muhammad Dehgavi Tafti, who was the sole employee and president of Assa, the FBI heard that Assa was controlled by the Government of Iran. (Id. 51:6-8 (Ennis).) Tafti informed the FBI that Assa was controlled by Bank Melli Iran and he knew that Bank Melli Iran was controlled by the Government of Iran. (Id. 52:7-11 (Ennis).)

         Among the investigations the FBI had conducted after the investigation commenced in 2006 but prior to December 2008 was one of Muhammad Geramian. (Id. 52:12-18 (Ennis).)[9] Geramian had been a president of the Alavi Foundation for a substantial period of time. (Id. 52:19-25 (Ennis).) Ennis recalled that he may have been president until sometime in 2007 or 2008. (Id. 52:21-25 (Ennis).) During an initial interview, Geramian told the FBI that Alavi was controlled by the Government of Iran, and that all business decisions, personnel decisions, and financial transactions, were controlled by the Government of Iran. (Id. 53:7-17 (Ennis).) Another interview that also occurred after the investigation commenced in 2006 but prior to December 2008 was that of Rahi, the former head of Bank Melli New York. (Id. 54:25-55:1 (Ennis).) Rahi informed the FBI that Bank Melli Iran controlled Assa and also controlled the “entire partnership” between Alavi and Assa. (Id. 55:7-10 (Ennis).)

         Ennis testified credibly that prior to the time the complaint was filed in December 2008, the FBI had already taken steps to obtain documents by way of subpoenas and discovery in the action filed against Assa. (Id. 58:21-23 (Ennis).)

         Levin also testified credibly that not all of the information known as a result of the investigation was included in the complaint filed in December 2008. (Id. 706: 19-22 (Levin).) She testified that they did not want to publicly disclose certain details about Alavi's involvement. (Id. 706:23-707:19 (Levin).) At the suppression hearing, Levin explained that a conscious decision was made to exclude certain details about Alavi's involvement in the creation of 650 Fifth Ave. Co. and relationship with Iran from the Complaint. (Id. 706:19-707:19 (Levin).) Ennis confirmed that in his credible testimony. Ennis testified that the FBI and U.S. Attorney's Office wanted to continue their investigation using their confidential source and that they did not want to cut short any investigative opportunities that that might provide. (Id. 61:4-8 (Ennis).) According to Ennis, whom the Court credited, if the information revealed by the confidential source was revealed in the affidavit supporting the search warrant or the complaint, the physical safety of the source and his family could be endangered. (Id. 80:15-25, 82:18-21 (Ennis).)

         Ennis further testified that, in all events, the final decision-making authority as to when to file a complaint against Alavi was with the U.S. Attorney's Office. On behalf of that office, Levin testified credibly that a decision was made in an effort to proceed cautiously for a number of reasons: For example, there was a desire to coordinate with various Judgment Creditors who also might seek to assert an interest in Alavi's property; there was a desire to coordinate with the U.S. Treasury's Office of Foreign Asset Control (“OFAC”); the Forfeiture Unit was trying to work with AUSAs in the terrorism unit who were still engaging in a criminal investigation into Alavi; and there were sensitivities about bringing a forfeiture action against a New York charity. (Id. 706:19-709-9; 712:13-713:22.)[10]

         As Levin explained, forfeiture of Alavi's interest in the Building was separated into a second litigation and later “phase.” (Id. 707:20-708:4; 712:13-713:22; 740:14-741:8 (Levin).) Levin testified that nevertheless, in her opinion, there was sufficient evidence at the time of the filing of the complaint to also file a forfeiture action with respect to Alavi. (Id. 709:4-10; 735:4-736:1; 760:17-22 (Levin).)

         1. Complaint Against Assa

         On December 17, 2008, the United States filed a Verified Complaint (the “Complaint) commencing an in rem action seeking forfeiture of, inter alia, “All right, title, and interest of Assa Corporation, Assa Company Limited, and Bank Melli Iran in 650 Fifth Avenue Company, including but not limited to the real property and appurtenances located at 650 Fifth Avenue, New York, New York, with all improvements and attachments thereon, and all property traceable thereto.”[11](ECF No. 1. ¶1(a).)[12] Levin explained that, under DOJ policy, the forfeiture proceeding had to follow shortly after the seizure of Assa's accounts. (Tr. 705:3-12 (Levin).)

         The in rem civil forfeiture action asserted that the Claimants' assets and properties were “subject to seizure and forfeiture pursuant to 18 U.S.C. § 981(a)(1)(C), as property constituting or derived from proceeds traceable to violations of the International Emergency Economic Powers Act (“IEEPA”), codified at 50 U.S.C. § 1701 et seq. [and were also subject to seizure and forfeiture] pursuant to 18 U.S.C. § 981(a)(1)(A), as property involved in or traceable to money laundering and attempted money laundering transactions, in violation of 18 U.S.C. §§ 1956 and 1957, and as property traceable to such property.” (ECF No. 1 at ¶ 2.)

         The Complaint outlined the alleged IEEPA violations as being based on the 1995 statutory provisions of the Iranian Transaction Regulations (“ITRs”), which “generally prohibit (1) the exportation, sale or supply, directly or indirectly, by a United States person or from the United States, of any goods, technology or services to Iran or the Government of Iran, and (2) the engagement by United States persons in any transaction or dealing, in or related to goods, technology or services, for exportation to Iran or the Government of Iran, without having first obtained a valid license from the United States Department of Treasury, Office of Foreign Asset Control (‘OFAC').” (Id. ¶ 7.) According to the Complaint, Assa Corp. had been providing “numerous services to Bank Melli in contravention of the ITRs, including transferring rental income generated from the Fifth Avenue Company to Bank Melli, following Bank Melli's instructions with regards to Assa Corp.'s affairs, reporting back to Bank Melli on Assa Corp.'s financial situation and business dealings, and managing the affairs of Assa Corp. for the benefit of Bank Melli.” (Id. ¶ 17.) The Complaint alleged that the organization of Assa, and the transfer of a 40% interest in the premises located at 650 Fifth Avenue, traced back to when the Building was first constructed by way of a loan from Bank Melli Iran to what was then the Pahlavi Foundation (and later became the Alavi Foundation). (Id. ¶¶ 18-24.) The history of that loan and its repayment by way of an ownership interest in a partnership organized for the explicit purpose of managing the Building are at the heart of the allegations.

         Prior to filing of the Complaint, OFAC had been looking into designating Assa as a front for Bank Melli Iran. OFAC ultimately coordinated that designation (which was made simultaneously) with the filing of the Complaint on December 17, 2008. (See Tr. 705:24-706:5 (Levin).) Thus, the Court finds that had the Government chosen to proceed with a forfeiture action against Alavi in December 2008, it had ample factual support to do so.

         2. Protective Order

         Alavi and 650 Fifth Ave. Co. were named in a Post-Complaint Protective Order (the “Protective Order”) pursuant to 18 U.S.C. § 983(j)(1), entered by the Court on December 17, 2008, the same day that the Government filed the civil forfeiture Complaint against Assa and 650 Fifth Ave. Co. (ECF No. 2.) The Protective Order provided, inter alia:

2. All persons and entities having actual knowledge of this Protective Order shall not, directly or indirectly, destroy any documents relating in any manner or part to the allegations in the Complaint, including but not limited to the books and records of the Fifth Avenue Company, the Pahlavi Foundation, the Mostazafan Foundation, the Alavi Foundation, Assa Company Ltd., and/or Bank Melli.

         Maintaining the Property

3. The Management Company and the Fifth Avenue Company shall maintain all books and records in their possession, custody and/or control, that relate in any manner or part to the Fifth Avenue Company, the Mostazafan Foundation, the Alavi Foundation, Assa Corporation, Assa Company Ltd., Bank Melli and/or the allegations in the Complaint.
. . .
6. The Fifth Avenue Company and the Management Company shall make available for inspection to the United States, or its designee, the books and records of the Fifth Avenue Company.

(Id. ¶¶ 2, 3, 6.)

         The Court finds that the Protective Order required that the very same records seized and determined relevant to this action be preserved.

         3. Events Leading up to the Search

         On December 17, 2008-the same day the civil forfeiture Complaint was filed-agents from the FBI and New York Police Department (“NYPD”) conducted a series of interviews with individuals employed by Assa, 650 Fifth Avenue, and the Alavi Foundation. Among the interviewing agents were Special Agent Jonathan C. Scott and Detective Michael Esposito. (GX 3.) These interviews were conducted at 500 Fifth Avenue, where each of these entities shared offices and the same premises that were searched on December 19, 2008.

         Among those interviewed was President of the Alavi Foundation, Farshid Jahedi, along with several others. (GX 3; see also Tr. 57:23-58:3 (Ennis).) In a memorandum of the interview with Jahedi, the agent noted that when they requested an interview, Jahedi called his lawyer. Thereafter, he consented to proceed with the interview. The memorandum noted that “[i]nitially, Jahedi advised that he did not know what Assa Corp. (Assa) was. After further questioning regarding its association with the Alavi Foundation of New York (AFNY), Jahedi stated that Assa held 40% of 650 Fifth Avenue (650). AFNY possessed 60% of the 650 real estate partnership.” (GX 3 at FBI164121.) The memorandum further noted that “[a]ll of AFNY's incoming funds are received from 650. Incoming funds received from 650 are distributed 60% into AFNY and 40% into Assa. . . .” (Id. at FBI164122.) Jahedi explained that at some point in 2007 he withheld payments from Assa; then, he took funds owed to Assa and “reinvested” Assa's funds back into the 650 Fifth Avenue building. (Id.) He considered this a “loan” from Assa. (Id.) The memorandum noted that “Jahedi's experience in dealing with finances and budgets originated from his various employments in Iran. He was the Deputy President of Tehran University, formerly known as National University . . . . In Iran, Jahedi was also employed at the Remote Sensing Center (RSC), a United Nations backed program involving technology pertaining to satellite pictures of land. The RSC is no longer in existence.” (Id. at FBI164123.)

         During the interviews, agents saw a large volume of documents in the offices and, further, learned that there was a storage unit in the basement that contained two hundred or more boxes of records dating back thirty years. Based on the evidence developed at the suppression hearing, the Court finds that it was reasonable for the FBI agents to view both the current and historical materials as to the nature of the relationship between Alavi, Assa, the Partnership, and Iran as probative regarding the crimes under investigation.

         As the FBI was leaving 500 Fifth Avenue the afternoon of December 17, an agent served Jahedi with a grand jury subpoena directed to Alavi and relating to the FBI's ongoing and active criminal investigation into violations of IEEPA and two anti-money-laundering statutes. (See GX 3 at REV-FBI001953-1955.) The subpoena commanded that on December 30, 2008, Alavi produce “any and all documents relating or referring to” Assa Corporation, Assa Ltd., Bank Melli Iran, and 650 Fifth Ave. Co. from January 1, 1989 to the present. (Id.) The scope of the request included but was not limited to the following categories of documents:

a. Contracts and/or agreements relating to financial transactions of any type and kind, including sale, purchase, rental, management, lease or transfer of ownership;
b. Financial statements;
c. Deposit slips and deposit items to which the slips relate (front and back);
d. Cancelled checks;
e. Payment receipts;
f. Records of transfer of funds by wire, collection, or internal transfer (incoming and outgoing);
g. Correspondence, to include e-mails, faxes, etc.

(GX 6 at 3.) The Court finds that this subpoena materially covers the relevant documents seized two days later, on December 19, 2008.

         The FBI placed a surveillance team on Jahedi after he had been served with the grand jury subpoena. (Tr. 64:17-20 (Ennis); GX 4.) The surveillance was instituted outside of the premises at 500 Fifth Avenue. (GX 4.)

         While certain agents were surveilling Jahedi, Ennis was communicating with the U.S. Attorney's Office to prepare a search warrant of the premises. (See Tr. 369:9-13 (Chernoff).) Preparation of the search warrant and Ennis's accompanying affidavit began in the early afternoon of December 18, 2008. (Id.) The evidence at the suppression hearing amply supports probable cause for a search warrant of the premises as of that time. The FBI's investigation had revealed a strong basis to support probable cause for Alavi and 650 Fifth Ave. Co.'s participation in one or more crimes.

         Later that afternoon, FBI agents followed Jahedi as he traveled by car to his home in Westchester. At one point, they observed Jahedi pulling into the Ardsley train station, exiting his car, and depositing torn documents into a public trash can. (GX 4.) Reconstruction of these documents indicated that they were among those required to be produced in response to the Alavi Subpoena; those documents separately happened to be covered by the Protective Order. (See GXs 4, 5; Tr. 515:21-24 (Alexander).)

         Before Ennis learned of the destruction of documents, the search warrant was essentially complete. (Tr.372:4-10, 378:5-12 (Chernoff).) The AUSA working on the warrant and accompanying affidavit was Harry Chernoff. (Id.) In connection with his duties and responsibilities as an AUSA, Chernoff had already worked on numerous warrants and supporting affidavits (none of which, to his knowledge, have resulted in suppression).[13]

         Events moved quickly after the surveillance team saw Jahedi attempting to destroy documents. Ennis arrived at his office in Manhattan early on the morning of December 19, 2008. The search warrant and his affidavit were ready to be submitted to the Court. But the events of the prior evening added urgency to the matter and it was decided that the search would occur that day, and that Ennis would not be able to accompany team. Ennis was needed at the office to work with the AUSA to prepare a criminal complaint seeking Jahedi's arrest. Ennis executed his affidavit supporting the search warrant, it was presented to Judge Katz for signature early in the day, and the team was immediately ready to execute it thereafter.

         Ennis also signed the criminal complaint against Jahedi (alleging obstruction of justice based upon his attempted destruction of documents sought by the grand jury subpoena) on December 19, and it was also presented to the Court and signed by Magistrate Judge Katz that same day. (GX 6.) The complaint detailed the events that had occurred the prior evening relating to the destruction of documents, and sought a warrant for Jahedi's arrest. (Id. at 4.) The need for a search warrant to issue before further documents could be destroyed, together with the need to draft a criminal complaint for Jahedi's arrest, required quick work by the Government's attorneys on multiple fronts. The Court finds that the need for expeditiousness was the primary reason the search warrant was likely not identified as deficient prior to presentation to Magistrate Judge Katz.[14]

         B. The Warrant and Supporting Affidavit

         Ennis testified regarding the typical practices followed by FBI agents in the New York Office, and followed here, with regard to obtaining a search warrant. The Court credits this testimony. (Tr. 33:9-34:11 (Ennis).) In particular, the Court finds that the conduct here did not deviate in any material way from reasonable, typical practice.

         Once a case agent and his team believe there is sufficient evidence to support probable cause for a search-that is, probable cause to believe a crime has been or is about to be committed-he would contact an AUSA assigned to the matter to discuss next steps. Ennis did that here. It is the practice in the New York Office for the AUSA to draft the actual warrant and the supporting affidavit, and that occurred here. Typically, and as occurred here, once a warrant and supporting affidavit are drafted for him, Ennis would review it and ensure accuracy. The warrant and affidavit are then typically, and as occurred here, approved by supervising counsel within the U.S. Attorney's Office. After the approval of the supervising attorney is obtained, the assigned AUSA and the agent-as occurred here-take the warrant and affidavit to a judge for review and approval. (See generally Tr. 33:3-36:25 (Ennis).)

         The warrant and supporting affidavit of Ennis (“Ennis Aff.”) were reviewed by a supervisor at the U.S Attorney's Office and presented to Magistrate Judge Katz on the morning of December 19, 2008. Magistrate Judge Katz reviewed and signed the warrant. Attached to the Ennis Affidavit as Exhibit B was the Verified Complaint, filed on December 17, 2008. That complaint consists of more than nineteen pages of factual allegations. (See GX 7.)

         At the outset of his affidavit, Ennis set forth his qualifications: as of December 2008, he had been a Special Agent for seventeen years and for the past two years had been assigned to a “group that focuses on terrorism financing.” (Ennis Aff. ¶ 1.)[15] His duties involved investigating material support of terrorism, money laundering, and violations of IEEPA. (Id.) As of December 19, 2008, Ennis had participated in executing approximately thirty search warrants. (Id.)

         Paragraph 3 of his affidavit clearly identifies the crimes under investigation. (Id. ¶ 3.) Ennis stated that the seizure of items set forth in “Exhibit A, ” attached to his affidavit, were believed to “constitute evidence, fruits and/or instrumentalities of, among other crimes, violations of the International Emergency Economic Powers Act Title 50, United States Code, Sections 1701 through 1706, and Title 31, Code of Federal Regulations, Section 595 et. Seq., the money laundering statutes, Title 18, §§ 1956 and 1957, and the mail fraud, wire fraud and related conspiracy statutes, Title 18, United States Code, sections 1341, 1343, and 1349.” (Id.)

         Ennis then summarized certain allegations set forth at some length in the Complaint, which had been filed two days previously. He stated that the “transactions underlying Bank Melli's acquisition of its interest in the Building” in 1989 was “not an arms-length transaction with Alavi, but rather a structure both to evade Alavi's tax liability and to conceal Bank Melli's interest in the Building.” (Id. ¶ 5.) Based on this and other facts set forth in the Complaint, Ennis asserted that there was “probable cause to believe that Alavi committed the same crimes” as alleged in the Complaint, and that “Alavi and its directors, employees, and other agents, committed, conspired to commit, and aided and abetted the same violations by Alavi and Bank Melli, among others.” (Id.) Ennis recited that Alavi maintains its offices at the Building, and the Building also housed files with respect to 650 Fifth Ave. Co. (Id. ¶ 6.)

         Ennis recited that subsequent to the filing of the Complaint on December 17, 2008, he and other law enforcement agents had conducted a series of interviews with Alavi directors, personnel, and agents. (Id.) Among the interviews conducted as relevant to the investigation was one with the portfolio manager for the real estate company that manages the Building on behalf of the Partnership. (Id.) The portfolio manager indicated that a storage unit located at 500 Fifth Avenue contained historical files dating back approximately thirty years. (Id.) As of 2008, that meant that records might exist for the period when the allegedly non-arms- length relationship between Alavi, Bank Melli Iran, and Assa began: 1978. This was a fact important to the investigation.

         Ennis further explained that law enforcement had interviewed the president of Alavi, and that he had also stated that he possessed records of Alavi dating back thirty years. (Id. ¶ 7.) During the interview (which occurred at Alavi's offices at 500 Fifth Avenue), agents observed numerous file cabinets and other furniture that apparently contained files and records. (Id.) Based on his experience, Ennis stated that he believed the premises contained “extensive records and documents . . . that are of the kind listed in Exhibit A.” (Id. ¶ 9.) Ennis further stated that “[t]hese records are likely to reveal important aspects and details of the crimes committed by Alavi and Assa Corp., among others, as well as the location of the substantial proceeds from these crimes.” (Id.)

         The final section of Ennis's affidavit discussed the importance of obtaining computers and electronic media. (See id. ¶¶ 11-12.) According to Ennis, “businesses involved in commercial rentals, investments, mortgages and real estate transactions routinely use computers and computer-related equipment.” (Id. ¶ 11.) “Computers are typically used to communicate with other parties through e-mail, and to generate documents and recordings concerning leases, rent receipts, and other aspects of transactions with tenants.” (Id.) Attached as Exhibit C to his affidavit (and referred to in ¶ 12) were the “specific methods to be employed relating to the search of any computer-related equipment.”[16] (See id. ¶ 12, Ex. C.)

         In sum, the affidavit describes the basis for the warrant as arising from information gathered during the course of an investigation into Alavi, Assa, and Bank Melli Iran. (Id. ¶ 4.) Bank Melli Iran was then and continues to be the Central Bank of Iran; it is an entity owned and controlled by the Iranian Government. According to Ennis, the investigation concerned a 1989 transaction involving the Building, which was constructed with a loan made in the 1970s by Bank Melli Iran to a predecessor of Alavi. (Id.) Facts developed as part of the investigation indicated that in 1989, in order to avoid certain tax liabilities, Alavi repaid the loan by giving Bank Melli Iran a 40% interest in the Building through an off-shore entity (Assa) set up by Bank Melli Iran to receive and own that asset. (Id.)

         The affidavit did not include all of the information known to the FBI as of December 2008. Ennis testified credibly that they did not want to include certain information because it could chill certain sources, and possibly endanger their welfare. (See, e.g., Tr. 80:15-25; 81:17-18; 82:12-13; 82:25-83:4 (Ennis).)

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