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Kirschenbaum v. 650 Fifth Avenue and Related Properties

United States District Court, S.D. New York

June 29, 2017

KIRSCHENBAUM, et al., Plaintiffs,
v.
650 FIFTH AVENUE and RELATED PROPERTIES, Defendants.

          OPINION & ORDER

          KATHERINE B. FORREST United States District Judge.

         Before the Court are a number of separate actions (the “Judgment Creditor actions” or “turnover actions”) brought by judgment creditors (“Judgment Creditors”) of the Government of the Islamic Republic of Iran (the “Government of Iran”). The Judgment Creditors seek to enforce their judgments against property owned by defendants the Alavi Foundation (“Alavi” or the “New York Foundation”)[1]and the entity of which it is the managing partner, 650 Fifth Avenue Company (the “650 Fifth Ave. Co.” or the “Partnership”). Plaintiffs assert that both entities are the agencies, instrumentalities, or alter egos of Iran.[2] Each Judgment Creditor action asserts claims under one or both of § 201(a) of the Terrorism Risk Insurance Act (“TRIA”), 28 U.S.C. § 1610 note, or § 1610(b)(3) of the Foreign Sovereign Immunities Act (“FSIA”), 28 U.S.C. § 1610(b)(3). The actions were coordinated for pre-trial and trial purposes. After lengthy and highly contentious discovery, a trip to the Second Circuit and back, and most recently a bench trial, the matter is now ready for final disposition. For the reasons set forth below, the Court concludes that the Judgment Creditors are entitled to a determination in their favor on both claims.[3]

         I. JURISDICTION

         There are two separate bases for this Court's subject matter jurisdiction. All Judgment Creditors assert claims pursuant to TRIA. As the Second Circuit noted in Kirschenbaum v. 650 Fifth Avenue & Related Properties, § 201(a) of TRIA provides “an independent basis for subject matter jurisdiction over post-judgment execution and attachment proceedings against property held in the hands of an agency or instrumentality of the terrorist party, even if the agency or instrumentality is not itself named in the judgment.” 830 F.3d 107, 132 (2d Cir. 2016). TRIA § 201(a) “clearly differentiates between the party that is the subject of the underlying judgment itself, which can be any terrorist party (here, Iran), and parties whose blocked assets are subject to execution or attachment, which can include not only the terrorist party but also ‘any agency or instrumentality of that terrorist party.'” Id. at 132 (quoting Weinstein v. Islamic Republic of Iran, 609 F.3d 43, 49 (2d Cir. 2010)).

         FSIA § 1610(b) provides a separate basis for jurisdiction for all Judgment Creditor actions (except those brought by the Greenbaum and Peterson plaintiffs, who did not assert such a claim). In September 2014, this Court granted summary judgment on, inter alia, plaintiffs' FSIA claims under § 1610(a)(7) and § 1610(g). (ECF No. 1125.)[4] In 2016, the Second Circuit vacated that decision. Kirschenbaum, 830 F.3d at 122-30. That vacatur left untouched plaintiffs' FSIA claims pursuant to § 1610(b)(3)-a section under which they had asserted claims but had not moved for summary judgment, and to which the appeal did not relate. This Court's May 4, 2017 decision addresses this procedural issue in some detail. (ECF No. 1649.) Indeed, while each Judgment Creditor asserting FSIA claims in a complaint had alleged one pursuant to § 1610(b)(3), [5] plaintiffs' 2013 memorandum in support of summary judgment explicitly stated that the motion was not brought with respect to that provision. (ECF No. 871 at 13 n.13; see also ECF No. 1125 at 44 n.20.) Accordingly, as discussed more fully in this Court's May 4, 2017 decision, the § 1610(b) claims remain live and are resolved herein.

         II. PROPERTY AT ISSUE

         The property at issue includes:[6]

1. The real property at 650 Fifth Avenue in New York, New York in 650 Fifth Ave. Co.'s name, which was built in the late 1970s;
2. The New York Foundation's interest in the 650 Fifth Ave. Co.;
3. The real property at 2313 South Voss Road in Houston, Texas in the New York Foundation's name, which was acquired in 1988;
4. The real property at 55-11 Queens Boulevard in Queens, New York in the New York Foundation's name, which was acquired in 1991 and 1997;
5. The real property at 4836 Marconi Avenue in Carmichael, California in the New York Foundation's name, which was acquired in 1989;
6. The currently undeveloped real property at 4204 and 4300 Aldie Road in Catharpin, Virginia in the New York Foundation's name, which was acquired in 1990; and
7. The real property at 7917 Montrose Road and 8100 Jeb Stuart Road in Rockville, Maryland in the New York Foundation's name, which was acquired in 1981 and 1984.

         In addition, plaintiffs seek to attach and execute on three bank accounts at Sterling National Bank held in the New York Foundation's name.[7]

         Together, the property and bank accounts at issue in this action are referred to as the “Subject Properties.”

         III. PLAINTIFFS' CLAIMS

         A chart setting forth the relevant Judgment Creditors' claims is attached as Appendix A to this Opinion. Following submission of this chart to the Court by the Judgment Creditors, (ECF No. 1811-1), defendants lodged three objections to the information included: (1) that the Hegna Judgment Creditors, who filed a show-cause order rather than a complaint, have not initiated a civil action against defendants in accordance with the Federal Rules of Civil Procedure;[8] (2) that the Heiser Judgment Creditors have not brought an FSIA § 1610(b) claim; and (3) that because the two Greenbaum Judgment Creditor actions stem from the same underlying complaint, Case No. 09-cv-564 (which Assa Corporation (“Assa Corp.”) removed from state court on January 21, 2009) should be dismissed. (See ECF No. 1831.)

         The third objection has been resolved. The Greenbaum plaintiffs filed a consent motion to consolidate the two Greenbaum cases on June 21, 2017, thus mooting defendants' objection. (See ECF No. 1873.) The Court granted the motion on June 22, 2017. (ECF No. 1876.) Regarding the second objection, the Heiser Judgment Creditors responded to defendants' letter on June 16, 2017, arguing that their complaint refers to FSIA § 1610 generally in several paragraphs, that they have repeatedly asserted FSIA § 1610(b) claims since their action was filed four years ago, and that defendants have repeatedly acknowledged those claims. (ECF No. 1851.) The Court agrees that the Heiser Judgment Creditors have asserted a § 1610(b) claim.

         The issue regarding the Hegna Judgment Creditors' action is unique.[9] The Hegna plaintiffs commenced a proceeding by way of an order to show cause on March 27, 2009. That show-cause proceeding-resolved as part of this Opinion & Order-seeks overlapping relief with the other Judgment Creditors and on the same bases. In 2009, there was some initial back and forth before the then-presiding judge, the Honorable Richard J. Holwell, as to whether the Hegnas should be required to file a formal complaint. By order dated April 16, 2009, Judge Holwell concluded a complaint was unnecessary. (ECF No. 15 (“After further review of the Hegna plaintiffs' submissions, the Court sees no need for a complaint to be filed . . . .”).) Notably, the nature of the relief sought in Hegna plaintiffs' initial and amended orders to show cause parallels that sought by the other Judgment Creditors. (See SCO; SCO Mem., ECF No. 431-18; SCO Aff., ECF No. 431-19; Am. SCO.)[10]

         The record shows no further discussion or motion practice regarding this issue, and the Hegnas' order to show cause has remained on the docket unresolved. At all times-and for years-the Hegnas participated actively in the litigation alongside the other Judgment Creditors: They were active in discovery, spoke at many conferences (often raising individual points), appealed various rulings, and participated in the bench trial. In short, while the Federal Rules of Civil Procedure require actions to be commenced with a summons and complaint, it would be manifestly unjust to deny that the Hegnas have a viable claim entitling them to the same relief as the other Judgment Creditors (no more, no less). And there is no doubt that the other Judgment Creditors as well as defendants have long been on notice of the Hegnas' claims.

         As the relief is ultimately the same for both the TRIA and FSIA § 1610(b) claims, there is no distinction between the relief to which any Judgment Creditor is entitled based on whether such plaintiff alleged one or both claims.

         IV. PROCEDURAL HISTORY

         In 2014, the Court granted summary judgment to the Judgment Creditors and ordered the turnover of defendants' assets. (ECF No. 1125.) Defendants appealed, and, on July 20, 2016, the Second Circuit Court of Appeals reversed and remanded.[11] Kirschenbaum, 830 F.3d at 117, 141-42.

         Following the Second Circuit's decision, the issues that remain to be decided are whether the Judgment Creditors are entitled to enforce their unsatisfied judgments against the Subject Properties pursuant to TRIA § 201(a) and FSIA § 1610(b)(3).[12]

         A. The Trial

         The Judgment Creditors' claims were tried to the bench simultaneously with a jury trial in the Government's civil-forfeiture action that began on May 30, 2017. The evidentiary record closed on June 22, 2017, and closing arguments in these turnover actions were held on June 28, 2017. Pursuant to a number of pre-trial orders, the evidentiary record developed during the jury trial was applicable in toto to the bench proceeding. In addition, both plaintiffs and defendants were provided an allotment of time for examination of witnesses they believed necessary for issues specific to the bench trial and were entitled to offer additional evidence. Additional examination of witnesses occurred after a witness's direct and cross examination had been completed in the forfeiture trial, and at the conclusion of the jury trial day. (See ECF No. 1754.)

         Both parties conducted additional examination of witnesses, including: Lisa Palluconi, U.S. Department of the Treasury, Office of Foreign Assets Control (“OFAC”); George Ennis, Special Agent for the Federal Bureau of Investigations (“FBI”); Gholamreza Rahi, former official of Bank Melli Iran (“Bank Melli”); Dan McWilliams, Supervisor Special Agent with the Internal Revenue Service (“IRS”); Hanieh Safakamal, former employee of the New York Foundation; and Marc Van Driessche, IRS Special Agent. The Judgment Creditors also introduced a number of documents-including stipulations, deposition designations, and other exhibits-in addition to those received during the forfeiture trial.[13]

         The parties in the turnover actions submitted pre-trial briefs on the relevant legal issues and made additional evidentiary and legal submissions throughout trial. (See Defendants (“Defs.”) Pretrial Statement, ECF No. 1748; Judgment Creditor (“JC”) Pretrial Statement, ECF No. 1749.) The Court informed the parties early that post-trial submissions would likely be unnecessary and the Court intended to rule promptly, as is often its practice in bench trials. At various points during trial, the Court encouraged the parties to make any additional submissions on legal or factual issues they believed necessary before closing arguments to ensure the Court was aware of their positions. During the course of the trial, the Court sua sponte raised that, while defendants had asserted a number of affirmative defenses in their answers in these actions, such defenses largely had not been addressed in their pretrial statement; the Court invited further submission on any defenses. (Trial Tr. 1986:9-23; ECF No. 1850.)[14] On June 18, 2017, defendants filed a letter stating that they intended to pursue two affirmative defenses to the TRIA actions: an innocent-owner defense, and a statute-of-limitations defense against the claims of the Rubin, Miller, Hegna, Peterson, Acosta, Heiser, Kirschenbaum, and Havlish plaintiffs. (ECF No. 1855.) The Judgment Creditors responded to each of these submissions, (ECF Nos. 1868, 1875), and the Hegna plaintiffs filed their own letter, (ECF No. 1889). Defendants filed an additional submission on June 25, 2017. (ECF No. 1886.)

         B. The Jury Trial

         As stated above, the Government's civil-forfeiture jury trial proceeded simultaneously with this bench trial. While the evidence overlapped significantly between the trials, the claims at issue were different and the evidence was not identical. The forfeiture trial involved claims that the New York Foundation and the Partnership had violated the International Emergency Economic Powers Act (“IEEPA”), 50 U.S.C. § 1701 et seq., and that they had engaged in various forms of money laundering. In this bench trial, the turnover claims are asserted under entirely separate statutory schemes: FSIA § 1610(b) and TRIA § 201(a). Plaintiffs also seek different relief: attachment and turnover, rather than forfeiture. Defendants have argued that this Court should await the jury verdict-and give it deference-before rendering its own decision in this case. (ECF No. 1824.) Given the particular circumstances here, there is no legal or prudential reason why deference is required or would even be appropriate. That is so irrespective of the jury verdict.[15]

         As an initial matter, there is no legal reason why deference is required. In Matthews v. CTI Container Transportation International Inc., plaintiffs' claims against all defendants except Compania Trasatlantica Espanola, S.A. (“Spanish Lines”) were resolved after trial by a jury, whereas its FSIA claims against Spanish Lines were tried to the bench. 871 F.2d 270, 274-75 (2d Cir. 1989). The resolution of plaintiffs' claims tried to the jury “differed in significant respects” from the district court's bench decision. Id. at 274. On appeal, the lack of deference was raised to the jury verdict as a basis for reversal. The Second Circuit disagreed. It held that the district court “was entitled to disregard the jury's fact-finding in reaching [its] conclusions.” Id. at 280 (favorably citing Moloney v. United States, 354 F.Supp. 480 (S.D.N.Y. 1972)).

         Here, too, the Court reaches its own determinations regarding findings of fact and conclusions of law. The Government brought its forfeiture action, the Judgment Creditors brought their own separate turnover actions, and the elements of the claims differ. As the Court has explained, in the separate civil-forfeiture action, the Government was required to show that defendants committed a forfeitable offense under IEEPA or the federal money-laundering statutes. See Kirschenbaum, 830 F.3d at 121. This involved questions of knowledge, as well as questions of whether-and what-“proceeds” were traceable to either an IEEPA violation or a money-laundering transaction. The Court's jury instructions in that action laid out the necessary findings. By contrast, plaintiffs here were required to show that, inter alia, defendants are an agency or instrumentality of the Government of Iran, or its alter ego. In addition, the evidence in each case, although overlapping, was different.[16] As stated above, the Court heard additional testimony and admitted additional evidence in the Judgment Creditor action.

         In addition, the fact that this case featured extensive evidence and was, in certain respects, unusually difficult to follow is another reason that jury deference is not warranted. Each fact-finder may separately weigh the evidence. Challenges included the breadth of the evidence, the number of people and places with multiple names, and the sometimes difficult-to-understand witnesses.[17] In particular, this case had an unusually large number of relevant players whose identities and positions with various organizations were important to understanding the evidence. There were dozens of individuals who had different roles in key events, and there were a number of different entities with names that changed over time; the events in this case spanned more than thirty years. In an attempt to enable the jury to follow the evidence, the Court asked the parties to use a board to display the names of the individuals being discussed. While the parties agreed to this suggestion, it was not immediately taken up. Only after further prodding by the Court was a board used-but even then, all that was included on the board was a name with no organizational affiliation. The Court also repeatedly requested that the parties confer on a “players list” to give the jury-similar to that which had been submitted by the Judgment Creditors in the bench trial-with names of relevant individuals, their affiliations, and the dates of those affiliations, along with supporting evidence for those facts. (See, e.g., Trial Tr. 2058:17-2059:10 (Hesami-Kiche).) Such a list was only finally available to the jurors during deliberations. This Court's ability to review the transcript both in real time (with LiveNote at the bench), as well as at the end of each day, enabled it to focus on the factual issues at hand in the Judgment Creditor actions and to render this decision expeditiously.

         In short, the facts and circumstances here do not present a situation in which deference to the jury verdict is required. Issuance of this decision, therefore, proceeds independently.

         V. FINDINGS OF FACT

         The Court's findings of fact are based on its assessment of the preponderance of the credible evidence.[18]

         In sum, based on a massive amount of evidence, this Court is firmly convinced-and finds by far more than a preponderance of the evidence-that at all relevant times, the Government of Iran exercised extensive control over the New York Foundation, the 650 Fifth Ave. Co. (of which the New York Foundation is the managing partner), and their Subject Properties. The Government of Iran also has regularly used an Iranian charitable organization operating at different times under different names (referred to herein as the “Iranian Foundation” but also known at times as the “Bonyad Mostazafan” or the “Janbazan” Foundation), as well as a government-owned bank (Bank Melli) as intermediaries through which it exercised control over the New York Foundation, the Partnership, and Assa (the other participant in the Partnership). The New York Foundation has been well aware of its true role and worked to fulfill its true purpose.

         Since its establishment, the most significant decisions for the New York Foundation have been made by the Government of Iran, Bank Melli, and the Iranian Foundation. The New York Foundation was able to further the Government of Iran's national purposes by concealing Iranian ownership of property within the United States during a period in which such ownership was perceived as decreasing the rental value of certain property or, later, was prohibited by law. In addition, the New York Foundation was established to further, and has in various ways furthered, the national purposes of the Government of Iran by promoting Iranian culture, heritage, language, and religious values in the United States. In effect, the New York Foundation not only has carried out a charitable mission that has served Iranian interests, but it also has functioned as a real estate holding company, the properties of which grew over time, for the ultimate benefit of the Government of Iran. The fact that the New York Foundation is registered as a not-for-profit corporation does not prevent such findings or erase such purposes. The corporate form of the New York Foundation has itself been used as part of the concealment apparatus. Despite nominal adherence to corporate formalities, its independence has-in fact-been a fiction. These findings are not what this Court considers to be “close calls.” As set forth in the voluminous trial record and only summarized below, they are based on overwhelming evidence.

         During the trial, defendants pointed to evidence that, they assert, supports contrary findings: that the New York Foundation's formal incorporation proves its independence; that witnesses testified to its functioning independently from foreign influence; and that the New York Foundation lacked knowledge that it was managing the Partnership for an Iranian entity, Bank Melli, after 1995-and, therefore, could never itself have been an agency or instrumentality. As discussed at length below, this evidence is not persuasive. To preview this discussion, there is more than sufficient evidence to demonstrate that the fact of incorporation did not alter the exercise of control by the Government of Iran but, indeed, assisted in preventing discovery of such control; that, when necessary, the New York Foundation created separate minutes of Board meetings, with cleansed versions used to maintain the fiction of independence; that the New York Foundation has been was willing to lie to regulators and courts about its connections to the Government of Iran, (see, e.g., GX 618 at 8; GX 1403; GX 1409; PX 318); and that there were several significant examples of charitable funds of the New York and Iranian Foundations being deemed interchangeable and used interchangeably, (see, e.g., GX 641-T; GX 643-T; GX 643C-T.) In addition, because the Government of Iran has selected the Presidents of the New York Foundation and controlled the composition of its Board, even more minor decision-making ultimately has been informed by those loyal, and beholden, to the Government of Iran and its agencies. Put simply, when representatives of the Government of Iran controlled the New York Foundation as Board members, they ran the New York Foundation on its behalf. That the Board members understood to whom they owed ultimate allegiance was demonstrated by both words and actions.

         As the Court discusses in more detail below, over time, the Government of Iran, Bank Melli, the Iranian Foundation, and the New York Foundation became concerned that the Government of Iran's control of the New York Foundation-even through intermediary companies-could have severe consequences vis-à-vis its assets, including forfeiture or loss. Lawsuits, such as those before this Court, were of particular concern. A number of documents reference these issues, and reference efforts to find a way to retain the significant assets held by the New York Foundation for the benefit of the Government of Iran through increasing layers of concealment and elaborate denials; resolving these concerns in order to protect property ultimately held for the benefit of the Iranian people is mentioned. Concerns that the Government of Iran's involvement in the properties would be discovered led directly to an elaborate and multi-layered coverup. For a variety of reasons that changed over time, starting in the late 1980s and continuing for decades thereafter, the Government of Iran-through Bank Melli, the Iranian Foundation, and the New York Foundation-made concerted efforts to conceal the truth of its essential control. As can be reasonably expected of a sophisticated sovereign power concerned about the loss of valuable assets, these efforts were many, varied, and prolonged. And, of course, not every person who played a helpful role in the coverup understood the use (or the full use) to which he/she was being put.[19] Those efforts have included operating through layers of front companies; having straw owners; minimizing an English-language paper trail that could tie control of the entities together; delivering instructions directly when it was perceived to be safe and circuitously when it was perceived not to be; creating a diversionary paper trail designed to give the false impression that the New York Foundation did not know that Assa (its partner in 650 Fifth Ave. Co.) was owned and controlled by Bank Melli (and, therefore, the Government of Iran); creating a diversionary paper trail to give the false impression that the New York Foundation believed the two post-1995 straw owners of Assa (Davood Shakeri and Fatemeh Aghamiri) were Assa's actual owners; perjuriously denying past and present association with the Government of Iran in a variety of forums, including in court filings and submissions to regulatory agencies; keeping certain members of the New York Foundation's Board or in its employ in the dark; and spending years in a scorched-earth legal strategy that denied the truth and sought to prevent disclosure and loss. All of this has been done by numerous people via numerous channels over many years.

         It was only through a prolonged investigation by the FBI and the IRS, with the assistance of the U.S. Attorney's Office, that the truth was pieced together. The amassed evidence has now shown that, in truth and fact and at all relevant times, the Government of Iran has extensively controlled the New York Foundation, the Partnership, and the Subject Properties. The Government of Iran's control will not manifest as an Iranian flag flying over the 650 Fifth Avenue Building or any other Subject Property. But the evidence is there, it is clear, and it is dispositive. The New York Foundation has known who and what it is throughout this time.

         A. The Early Years

         From the very outset of the New York Foundation, there have been strong connections among all of the relevant entities involved in this drama that have never been severed: between the Government of Iran and the New York Foundation, the Iranian Foundation and the Government of Iran, the Iranian Foundation and the New York Foundation, and Bank Melli and the New York Foundation. These connections have persisted over time.

         The Alavi Foundation is the most recent name of a charitable organization that dates back to pre-revolutionary Iran. The last Shah of Iran, Mohammad Reza Pahlavi, started a charitable foundation in Iran called the Pahlavi Foundation of Iran. (GX 75 ¶ 1; Trial Tr. 767:13-768:23 (Shafie).) In the early 1970s, the Shah created an American branch of the Pahlavi Foundation; this became the Pahlavi Foundation of New York, the name of which was later changed to the Mostazafan Foundation of New York and, eventually, the Alavi Foundation. (GX 75 ¶¶ 1, 3.) The Pahlavi Foundation of New York was established as a not-for-profit corporation under the laws of the State of New York and was granted § 501(c)(3) status by the IRS. (Id. ¶ 1; GX 213-T.) The New York Foundation continues to exist as a § 501(c)(3) charitable entity.[20] (GX 75 ¶ 1.)

         Since its inception, the New York Foundation has, like its Iranian parent organization, [21] engaged in a variety of charitable works. These include promoting Persian culture and heritage, teaching Farsi, and supporting Muslim educational and religious missions.[22] (Id. ¶ 5.) It also has functioned as a real estate holding company with a growing portfolio of American properties acquired between 1974 and 1997. (See GX 79.)

         In 1974, the New York Foundation purchased property located at 650 Fifth Avenue, New York, New York, upon which it constructed the 36-story office tower (the “Building”) that has long been at the heart of this case. (GX 77 ¶ 1.) This acquisition was financed by a $42-million, interest-free mortgage from the New York branch of Bank Melli, a bank owned and controlled by the Government of Iran. (Id.; GX 143; Trial Tr. 769:11-13 (Shafie); id. 1113:8-10 (Rahi).) The loan from Bank Melli paid off an existing mortgage on the property and was used to construct the Building.[23] (GX 77 ¶ 1; Trial Tr. 769:1-10 (Shafie).)

         Since the Building's construction, the New York Foundation's primary source of income has been commercial rents.[24] (A very small percent of its income is from other sources.) Until the mortgage was eliminated in 1989, the New York Foundation also made mortgage payments to Bank Melli. As discussed herein, the structure of the New York Foundation's sources and uses of funds raised tax and other concerns with numerous of individuals associated with the Government of Iran's political arms, Bank Melli, the Iranian Foundation, and the New York Foundation. These individuals were concerned that the New York Foundation had to pay significant taxes and was deducting taxes payable to the IRS from amounts that would otherwise be paid to Bank Melli. (See, e.g., GX 242-T.) Ultimately, these concerns led to the financial relationship between the New York Foundation and Bank Melli being restructured into a long-term partnership.

         But first, the intervening Iranian Revolution created significant changes for the New York Foundation. In 1979, Shah Pahlavi was overthrown in a revolution. (GX 76 ¶ 1.) A new, theocratic government assumed power, and the country was renamed the Islamic Republic of Iran.[25] The Supreme Leader of this government a religious figure, Ayatollah Ruhollah Khomeini. (Id.) The new government confiscated the property of the Shah and the royal family. This included the Pahlavi Foundation of Iran and the Pahlavi Foundation in New York, which subsequently came under the ownership and control of the revolutionary Government of Iran. (Trial Tr. 1719:19-1720:21 (Hesami-Kiche).) Following that confiscation, the Pahlavi Foundation in Iran was renamed the Mostazafan Foundation in Iran-or the Bonyad Mostazafan-by the Ayatollah Khomeini. (Id. 772:2-6, 774:2-17 (Shafie); id. 1707:11-16, 1709:1-5 (Hesami-Kiche).) The Iranian Foundation's New York branch was similarly renamed the Mostazafan Foundation of New York. (GX 75 ¶ 3; Trial Tr. 1720:17-21 (Hesami-Kiche).)

         After the Iranian Revolution, the new government's Revolutionary Council passed a “Legal Bill of the Charter of the Oppressed Foundation, ” dated July 13, 1980, which is similar to articles of incorporation for the Iranian Foundation. (PX 559 at 3, 11-24.) Article Two of the document identified the subject and purpose of the Iranian Foundation as, inter alia, to “centralize all the case, stocks, negotiable instruments, and movable and immovable properties of the Pahlavi family.” (Id. at 11.) Article Five provided that the Iranian Foundation “may open a branch or office in any place inside and outside the country as it deems appropriate.” (Id. at 13.) The Court finds that the New York Foundation was a branch of the Iranian Foundation.

         The Iranian Revolution did not alter the fact that the Government of Iran had ultimate control of the Iranian and New York Foundations. The Government of Iran controlled the Mostazafan Foundation in Iran, which in turn controlled the New York Foundation. The New York Foundation readily took direction from the Iranian Foundation on the most significant matters affecting its operations. In some instances, it took instructions directly from high-ranking political officials of the Government of Iran, including, at times, the Ayatollah himself. Moreover, the history of appointments of Board members to the New York Foundation shows placement of individuals on the Board who also occupied influential positions with the Iranian Foundation and/or the Government of Iran. Other Board members without such official positions were nonetheless beholden to the Iranian Foundation and/or the Government of Iran for their appointments.

         The evidence at trial does not support a point in time when the Iranian Foundation and New York Foundations severed relations. At most, as concerns about discovery of Iranian involvement in the New York Foundation (and, therefore, asset forfeiture or seizure) increased, concealment efforts increased. Extensive efforts were made-and continue to be made-to conceal and vigorously deny the continuing, close relationship between the Foundations.

         Seyed Mojtaba Hesami-Kiche, who gave a first-hand account of the close parent/child relationship between the Iranian and New York Foundations, testified for over two days. Hesami-Kiche served as the Secretary of the New York Foundation and as a member of its Board from 1983 to 1991. (GX 607; GX 602-T.) His affiliation with the Foundations began soon after the Iranian Revolution, when he started working for the Iranian Foundation. (Trial Tr. 1707:19-20 (Hesami-Kiche).) The Court found Hesami-Kiche highly credible and extremely knowledgeable as to the New York Foundation's early history and the connections between the Iranian and New York Foundations.[26] He provided important insight into the background of the New York Foundation as a branch of the Iranian Foundation and its connection to the Government of Iran.

         When he started working for the Iranian Foundation, and for some years thereafter, Hesami-Kiche reported directly to its head, Mehedi Tabatabaei. (Trial Tr. 1713:7-13, 1716:13-21 (Hesami-Kiche).) Early in his employment with the Iranian Foundation, Hesami-Kiche was given the responsibility of overseeing the New York Foundation. (Id. 1717:4-12 (Hesami-Kiche).) As part of his oversight responsibilities of the New York Foundation while he was in Iran, Hesami-Kiche interacted with various members of the Board of the New York Foundation, including Mohsen Davachi, Manoucher Shafie, and Sirousse Tabriztchi. (Id. 1725:20-1726:1 (Hesami-Kiche).) At that time, Shafie was President and Davachi was Treasurer of the New York Foundation. (Id. 1727:19-20 (Hesami-Kiche).)

         Numerous documents evidence the Iranian Foundation's early, direct control and management of the officers and members of the Board of the New York Foundation. For instance, while he was working in Iran for the Iranian Foundation in the early 1980s, Hesami-Kiche was directed by Tabatabaei (the head of the Iranian Foundation) to replace New York Foundation Board members who had served under the Shah, and to increase the number of Board members of the New York Foundation. (Id. 795:16-18 (Shafie); id. 1729:14-1731:6 (Hesami-Kiche).) Tabatabaei personally identified the individuals who should be added to the Board. (Id. 1729:19-21 (Hesami-Kiche).) He instructed that those to be added include four individuals from the Iranian Foundation: his brother, Mohsen Tabatabaeipour (head of the cultural section of the Iranian Foundation), Hesami-Kiche himself, Abdollah Poosti (deputy of judicial or legal affairs for the Iranian Foundation), and Mohammad Piryandeh (who worked in the cultural section of Iranian Foundation). (Id. 1729:22-1730:12, 1732:222-1734:12 (Hesami-Kiche).) At Tabatabaei's instruction, Hesami-Kiche called these individuals to inform them of their nomination to the Board of the New York Foundation. (Id. 1730:17-21 (Hesami-Kiche).) There is no indication in the record that these appointments would (or did) require relinquishment of the positions these individuals had with the Iranian Foundation.

         The minutes from the May 2, 1983 annual meeting of the New York Foundation's Board corroborate Hesami-Kiche's testimony regarding the Iranian Foundation's direct control over the Board of the New York Foundation. (GX 607.) The minutes indicate that the individuals referred by Tabatabaeipour were in fact put on the Board of the New York Foundation.[27] (Id. at 1, 2.)

         Control of the New York Foundation Board occurred not only by arranging its composition, but by active participating in Board meetings. At a subsequent meeting of (nominally) the Board of the New York Foundation that occurred in July 1983, Tabatabaei instructed that Hossein Mahalati[28] would become the new President and Mohammad Badr-Taleh the new Treasurer of the New York Foundation. (GX 608; Trial Tr. 904:13-14 (Shafie), id. 1738:7-8, 1738:19-1739:5 (Hesami-Kiche).) The same minutes also reflect Davachi's and Shafie's resignations from the Board of the New York Foundation. (GX 608 at 4-5; Trial Tr. 1737:11-24 (Hesami-Kiche).) Shafie testified live at trial and stated that he viewed the composition of the Board of the New York Foundation as lacking independence from the Iranian Foundation. (Trial Tr. 849:12-20 (Shafie).)

         Control of the New York Foundation by the Iranian Foundation was-in effect-control by the Government of Iran. Ample evidence supports that the Government of Iran itself directed who would become the head of the Iranian Foundation and that the heads of the Iranian Foundation were or had been high-level officials of the Government of Iran. For instance, in the 1980s, the Government of Iran replaced Tabatabaei with Tahmaseb Mazaheri as the director of the Iranian Foundation. (Id. 1744:13-21, 1747:6-8 (Hesami-Kiche).) Later, Mazaheri, yet another high-ranking official in the Government of Iran, assumed a leadership position at the Iranian Foundation. Mazaheri was placed in this position by the then Iranian Prime Minister, Mir-Hossein Mousavi. (Id. 1744:19-21, 1747:24-1748:2 (Hesami-Kiche).) Mazaheri had been the budget planning commissioner for the Government of Iran, (id. 1748:3-10, 1749:8-16 (Hesami-Kiche)), and later became the Minister of Finance and head of the Central Bank of Iran, (id. 1749:23-1750:2 (Hesami-Kiche)).

         Hesami-Kiche was still working with the Iranian Foundation at the time Mazaheri assumed its leadership. Hesami-Kiche informed Mazaheri about the role and activities of the New York Foundation. (Id. 1750:3-9 (Hesami-Kiche).) As part of his duties and responsibilities, Hesami-Kiche provided Mazaheri with reports he received from the New York Foundation. (Id. 1742:6-1744:10, 1750:3-15, 1880:17-1883:5 (Hesami-Kiche).) The Office of the Prime Minister of Iran also received information regarding the New York Foundation, and had an official interest in such information during this time.[29]

         While the composition of the New York Foundation's Board continued to shift during the 1980s, it remained firmly under the control of the Iranian Foundation and the Government of Iran. At a meeting of the New York Foundation's Board in December 1983, Poosti (also deputy of the Iranian Foundation's legal or judicial affairs) resigned his position as Secretary of the New York Foundation, and Hesami-Kiche was elected to replace him. (GX 609 at 2-3.) At a Board meeting of the New York Foundation in July 1984, which Hesami-Kiche attended, Mohsen Tabatabaeipour resigned from his position with the New York Foundation and Habib Zobeidi (Deputy of Financial Affairs for the Iranian Foundation) was nominated to serve on its Board. (GX 610 at 3-4; Trial Tr. 1742:3-5 (Hesami-Kiche).)

         An important addition to the New York Foundation personnel also occurred at the July 1984 board meeting. At that meeting, Firooznia and Mekul, Certified Public Accountants, P.C., was appointed to be the accountant for the New York Foundation. (GX 610 at 6.) Hamid Firooznia of that firm then became the accountant for the New York Foundation; it appears that, at times, he also acted as the account for Assa. (Trial Tr. 1049:6-7 (Rahi); id. 1255:5-9, 1291:5-7 (Karjooravary); see also DXs 201-226.) Firooznia remained in this position until 2004. (DX 5001.) The evidence demonstrates that, in that position, he had acted as an agent for both entities; he had substantial interactions with the Iranian Foundation, the New York Foundation, Bank Melli, and, eventually, the Assa entities set up as part of a partnership between Bank Melli and the New York Foundation. His actions on behalf of the New York Foundation repeatedly demonstrated that the New York Foundation ultimately was ultimately controlled by the Iranian Foundation and the Government of Iran. (However, as discussed below, the evidence also supports Firooznia continuing to act as an agent for the New York Foundation even after he was its accountant.)

         In the 1980s, the New York Foundation continued to build its real estate portfolio, acquiring several pieces of real property. In 1981 and 1984, it purchased property in Rockville, Maryland. (See GX 79; PX 50.) In 1989, it acquired property in Houston Texas. (See GX 79.) And in 1989, it purchased property in Carmichael, California. (Id.)

         During this same time period, the Government of Iran was involved in the New York Foundation's decisions regarding its charitable activities. For instance, in an October 1985 letter to Iranian Prime Minister Mousavi, Ali Sabzalian (head of the Interest Section of the Islamic Republic of Iran in Washington (“ISEC”)) proposed using the New York Foundation to support activities promoting the Iranian Revolution in the United States. (GX 650-T.) He wrote that the proposal was the result of “lengthy discussions” with, inter alia, the agencies of the Islamic Republic in New York and “persons in charge of [the] New York Foundation.” (Id. at 2 (emphasis added).) He concluded that, if the Prime Minister agreed to “allocat[e] a budget for the above mentioned issues, and sending to the above mentioned organizations, a detail[ed] and comprehensive plan will be submitted.” (Id.) The trial record also contains several documents related to the involvement of the Iranian Prime Minister's Office-including the direct involvement of Prime Minister Mousavi himself-in donations to Canadian institutions that would be paid by the Foundation. (GX 641-T; GX 643-T; GX 643C-T; GX 640-T; see also GXs 642-T; GX 633B-T.) In 1988, Badr-Taleh (the President of the New York Foundation) wrote to Hesami-Kiche (the Secretary of the New York Foundation and still living in Iran), copying Zobeidi (who also held simultaneous positions in both the Iranian and New York Foundations). (GX 639-T.) This letter reveals a clear overlap in charitable activities between the New York and Iranian Foundations:

In order to protect the interests of the Foundation . . . it is not advisable that the management expenses in Canada be paid by [the New York Foundation]. . . . God forbid if any American Officials get in contact with the afore-mentioned university this issue and anything related to it will be opened and could be used as a weapon against the New York Foundation. My recommendation is that the Foundation of New York should not accept this plan. Instead the Mostazafan Foundation in Iran would undertake the project and the expenses be paid from Germany.

(Id. (emphasis added).)

         A December 1990 letter from the Office of the President of Iran to Mohsen Rafighdoost (then head of the Iranian Foundation) indicated that the donations continued. (GX 633-T.) That letter referenced donations to McGill University in Montreal and requested that Rafighdoost “confirm the proposal of the institute [at McGill] and instruct to Most[a]zafan foundation of NY to cooperate in amending the contract as per the same rules and conditions but on 5 year[] periods.” (Id. (emphases added).)

         B. Creation of the Partnership

         Substantial evidence demonstrates the direct involvement of the Government of Iran and the Iranian Foundation in the creation of the Partnership between Bank Melli and the New York Foundation. The Government of Iran was on both sides of the transaction and directed both of the entities-the New York Foundation and Bank Melli-to enter into it. The evidence demonstrates that the New York Foundation knew that the Government of Iran was the primary decisionmaker in this regard; the New York Foundation's representatives received (rather than originated) information regarding the plan, its implementation, and the authorization for its implementation-all from Iranian governmental officials, and primarily through the Iranian Foundation or Bank Melli. This same evidence also demonstrates that members of the Board of the New York Foundation understood from the formation of the Partnership that its real partner was the Government of Iran. And, as discussed below, the Partnership was protecting the Government of Iran's financial interests.

         For instance, in the late 1980s, a letter addressed to the then Iranian Prime Minister Mousavi-drafted by Zobeidi (who held simultaneous positions with the New York and Iranian Foundations) but signed by Mazaheri (Deputy Prime Minister of Iran and the head of the Iranian Foundation)-set forth an early version of a plan to address concerns regarding U.S. taxes paid by the New York Foundation. (GX 626-T; Trial Tr. 1752:22-1755:15, 1796:3-9, 1797:17-20 (Hesami-Kiche).) The draft letter began: “This is to respectfully inform you that [] one of the major problems of the New York Mostazafan Foundation stems from the debt it owes to the New York branch of [Bank Melli].” (GX 626-T at 1.) Notably, this statement evinces a concern for the New York Foundation, not “because of” it. This distinction is meaningful, as it indicates a concern regarding the stability of the New York Foundation itself; at this time the debt to Bank Melli, while periodically in arrears, was being paid down. One option proposed in this letter was to create a company, the shares of which would be owned by the New York Foundation, with the ownership of the 650 Fifth Avenue Building transferred to that company. (Id. at 2.) Put otherwise, this plan contemplated cancelling the New York Foundation's mortgage by giving it total ownership of the Building through shares in a separate corporate entity. This plan certainly appears to have been driven by concerns about the New York Foundation's well-being more than repayment to Bank Melli. Needless to say, this does not demonstrate an intention to have an arms-length transaction with Bank Melli. This draft refers to a plan having been discussed with Majid Ghasemi (head of the Central Bank of Iran). (Id. at 4; Trial Tr. 1802:22-24 (Hesami-Kiche).)

         While this particular plan was not implemented, a version of it was. (Trial Tr. 1813:2-12 (Hesami-Kiche).) Ultimately, more distance than contemplated in the original plan was created between the New York Foundation and the structure that would shield it from taxes through the creation of the Assa companies and a partnership to which the Building was then transferred. That is, layers of companies along with straw owners were eventually used.

         The plan to resolve the Bank Melli mortgage continued to evolve. A 1987 English-language document titled “Consent of Directors In Lieu of Meeting” proposed a partnership format to eliminate the tax liability. (GX 611.) In particular, it stated that “a partnership format, with the [New York Foundation] contributing the Building [located at 650 Fifth Avenue] and an investor contributing the necessary capital to discharge the outstanding mortgage debt on the Building, would enable the [New York Foundation] to achieve this desired elimination of tax liability.” (Id. at 1.) Early awareness of a desire to conceal Bank Melli's actual participation in the Partnership is demonstrated by this reference in the English-language Board document to “finding” an investor-when it was already known that the investor was Bank Melli, through Assa. Another English-language “Consent of Directors in Lieu of Meeting, ” dated February 26, 1987, approved the transfer of the Building to a partnership subject to, inter alia, Bank Melli's consent as mortgagor. (GX 612 at 1-2.) An English-language resolution by the New York Foundation's Board from April 1987 reflected that Bank Melli approved the transfer of the Building to the Partnership. (GX 613 at 1-2.) This document avoids the actual circumstances of the transaction, in which Bank Melli and the Iranian Foundation together, with other Iranian officials, had come up with the plan in the first instance. “Bank Melli” alone, therefore, was not the sole approving party-several Iranian officials and entities were closely involved as well. All of these English-language resolutions contrast with the Farsi-language documents that evidenced how and why the Partnership actually came into existence. This contrast between the behind-the-scenes Farsi documents and the English-language Board documents reveal the misuse of the New York Foundation's corporate form to conceal actual circumstances.

         For instance, in November 1987, Hesami-Kiche received a copy of a “confidential” letter that Mazaheri (Deputy Prime Minister of Iran and “Superintendent” of the Iranian Foundation) wrote to Prime Minister Mousavi. (GX 623-T at 1; Trial Tr. 1806:20-1807:9 (Hesami-Kiche).) In this letter, Mazaheri requested that the Prime Minister “make a decision” regarding the plan “to improve the financial problems of the New York Foundation.” (GX 623-T at 1 (emphasis added).) The letter indicated that the Iranian Prime Minister's approval was needed in two respects: first, for “[g]eneral agreement with the presented plan, and your permission for its implementation”; and, second, to “[a]llocat[e] forty million dollars in foreign currency for the [New York] Foundation.” (Id.; Trial Tr. 1809:10-16 (Hesami-Kiche).) An attached “confidential” response from Hadi Mohajeri (in the Office of the Prime Minister) stated that Prime Minister Mousavi is “agreeable to both suggestions.” (GX 623-T at 2.) With the Prime Minister's permission in hand, Mazaheri then wrote to Ghasemi (head of the Iranian central bank) to let him know that the Prime Minister had approved the plan. (Id.; GX 621-T; Trial Tr. 1801:22-1802:5 (Hesami-Kiche).) In that letter, Mazaheri acknowledged a need for secrecy regarding the Government of Iran's involvement, stating that “in all stages of allocation, executive, payment, as well as in all corresponden[ce] and discussions, confidentiality is of the utmost importance.” (GX 621-T.)

         Farsi-language minutes of a May 24, 1989 meeting of the Board of the New York Foundation were drafted on the letterhead of the Iranian Foundation. (GX 603-T; Trial Tr. 1826:11-17 (Hesami-Kiche).) Those minutes reflected attendance by Mohammad Hossein Behdadfar, who held a high-level position with Bank Melli and was a straw owner of the shares of Assa, which was created to be the New York Foundation's partner in the 650 Fifth Ave. Co. (GX 603-T; GX 210-T; GX 425 at 4; GX 78 ¶¶ 1-2; Trial Tr. 1829:1-15 (Hesami-Kiche).) Behdadfar is not indicated as an invited guest but is instead mentioned along with all the other Board members. The minutes further reflect attendance by Eisa Sbabsavar Khojasteh[30] (the Deputy Director of Commerce and International Affairs for the Iranian Foundation), Badr-Taleh (President of the New York Foundation), and Mohammad Reza Moghaddasi (it is unclear who he is, but he was not on the Board of the New York Foundation). (GX 603-T; GX 632-T; Trial Tr. 1814:16-17, 1828:23-1824:19 (Hesami-Kiche).) The meeting was held in Khojasteh's offices. (GX 603-T.) These high-level representatives of Bank Melli, the Iranian Foundation, and the New York Foundation together reached various decisions at that meeting, including that: “Only one company from the Central Bank Melli Iran will partner with the New York Foundation;” “As part of the mutual agreement between the New York Foundation and Bank Melli Iran, the New York Foundation agrees to pay taxes, if the building is sold or transferred;” and “Bank Melli Iran created two partnerships in Jersey Island (illegible) and will cooperate with the New York Foundation or through other partners.” (GX 603-T.)

         A month after this meeting, Badr-Taleh (President of the New York Foundation) wrote in Farsi to Bank Melli to advise them of increased urgency in reaching a resolution because the New York Foundation's tax-exempt status might well change-requiring a payment of $4 million from Bank Melli in U.S. taxes. (GX 242-T at 2.)

         An English-language July 31, 1989 “Consent of Directors in Lieu of Meeting” authorized the New York Foundation to form a partnership subject to the prior consent of, inter alia, Bank Melli. (GX 616 at 1.) Also, on July 31, 1989, the New York Foundation and Bank Melli's newly-incorporated New York company, Assa Corp., entered into the partnership agreement (“Partnership Agreement”) that formed the 650 Fifth Ave. Co. under New York State law, and designated the New York Foundation as its managing partner. (GX 125; DX 109; GX 77 ¶ 3.) Assa Corp. is wholly owned by Assa Co. Ltd., a Channel Islands corporation. It is undisputed that Assa Co. Ltd. is ultimately owned and controlled by Bank Melli.[31](GX 78 ¶¶ 1, 6.) At its annual meeting on August 3, 1989 in Tehran, the Board of the New York Foundation approved the transfer of the 650 Fifth Avenue Building to the Partnership. (GX 617 at 21-22.) These consents and resolutions concealed that all pertinent authorizations had already been given by the Prime Minister's Office, Bank Melli, and the Iranian Foundation.

         Pursuant to the Partnership Agreement, the New York Foundation contributed the Building at 650 Fifth Avenue (then valued at $83.2 million) subject to the existing mortgage to the 650 Fifth Ave. Co. Partnership. Assa contributed $44.8 million, which the 650 Fifth Ave. Co. used to satisfy the Bank Melli mortgage. (GX 77 ¶ 4.) In exchange for their respective contributions, the New York Foundation received a 65% interest in the 650 Fifth Ave. Co., and Assa received a 35% interest in the 650 Fifth Ave. Co. (Id.) The 650 Fifth Ave. Co. Partnership became the 100% title-owner of the Building. (Id.) In 1994, the New York Foundation sold 5% of its interest in the Partnership to Assa. As a result, the New York Foundation now holds a 60% interest, and Assa holds a 40% interest. (Id. ¶ 8; DX 123.) Under the Partnership Agreement, the New York Foundation is the managing partner; 650 Fifth Ave. Co. has no employees of its own. (GX 77 ¶ 9.)

         Based on the evidence, individuals from Bank Melli, the Iranian Foundation, and the New York Foundation clearly believed that eliminating the Bank Melli mortgage freed the New York Foundation of tax obligations on rental income from the 650 Fifth Avenue Building's commercial tenants, and eliminated the risk that Bank Melli would be subject to a significant tax payment. (Id. ¶ 7.) The Partnership enabled Bank Melli-and the Government of Iran through Bank Melli, as well as the New York Foundation-to conceal ownership in the valuable real estate asset located at 650 Fifth Avenue. As Mohammad Karjooravary (a former Bank Melli official also known as “Karjoo”) testified, Bank Melli understood that, as a bank, it was not allowed under U.S. law to hold real estate for more than five years. (Trial Tr. 1266:9-14 (Karjooravary).)

         On August 18, 1989, Mohammad Bagherian (then Director of the Iranian Foundation, which at that time had changed its name to the “Islamic Revolution Janbazan [“battle wounded” or “wounded warriors”] Foundation”)[32] received a “confidential” letter from Khojasteh (Deputy Director of Commerce and International Affairs for the Iranian Foundation). (GX 632-T at 1; GX 604-T at 1; Trial Tr. 1830:9-17 (Hesami-Kiche).) The letter followed a meeting they attended, along with Kamal Kharazi[33] (who soon would be Iran's Permanent Representative (the “Ambassador”) to the U.N.) and Badr-Taleh (President of the New York Foundation) in the office of the Islamic Republic of Iran News Agency. (GX 632-T at 1; DX 5004 ¶ 12.) In the letter, Khojasteh stated that the meeting participants had agreed to establish:

[A] Company in the USA that the owner of all its shares to be Vena Holding Co., belonging to [the Iranian Foundation].[34] This Company from the indirect help[] of Mostazafan Foundation of New York, also taking loan from the banks inside of the USA, will purchase some residential building for renting to the employees of Islamic Republic of Iran Agency Office in the UN, or the individuals that will be introduced by [the Iranian] Foundation. Mr. Mahalati, the executive director of Elmi Company (which belongs to the [Iranian] Foundation) also will act as the executive director of the new Company.

(GX 632-T at 1 (emphases added).) In a handwritten note at the bottom, Bagherian responded: “I agree. Take the appropriate measures.” (Id. at 2.) This plan appears eventually to have been implemented. M.I.R.I. Holdings (“MIRI”) purchased a building and rented units to employees of Iran's mission to the U.N. through another entity, Mellon Properties. (Modarres Tr. 72:10-13.)[35] As the Court will discuss in more detail below, the New York Foundation's Board members interacted with Mahalati (referred to above) and MIRI in connection with the settlement of the Hanif litigation.

         The next day, Khojasteh (Deputy Director of Commerce and International Affairs for the Iranian Foundation) sent another letter to Bagherian (Director of the Iranian Foundation) labeled “SECRET.” (GX 604-T.) The primary purpose of secrecy in these circumstances was to conceal Bank Melli's ownership of Assa and participation in the Partnership. The letter stated that, “[a]s you know, the partnership agreement between the [New York Foundation] and Bank Melli of Iran has been finalized . . . . The board of trustees of the [New York] Foundation supports the partnership agreement, but to avoid any problems in the future, we would like to ask you to endorse the partnership and notify the trustees so they can take action accordingly.” (Id. at 1 (emphasis added).) The Court finds the use of the term “we” indicated Khojasteh's identification of the Iranian Foundation and the New York Foundation, and the phrase “notify the trustees to they can take action accordingly” referenced a need for an instruction to the Board members of the New York Foundation to take all appropriate actions. The letter continued: “Please note that the partnership seems to be based on prior agreements between the Ministry of Finance [of Iran] and Bank Melli Iran, on one side, and the Islamic Republic of Iran Janbazan [battle wounded] Foundation, on the other . . . .” (Id. (emphasis added).)

         This same letter supports a finding that the financial aspects of the transaction between Bank Melli and the New York Foundation were based on Bank Melli's available funds-not on an arms-length valuation. (Id.) Attached to the letter is a handwritten note from Bagherian to Khojasteh stating that he agreed to proceed with the Partnership and that it will “be very beneficial.” (Id.; Trial Tr. 1833:20-1834:16 (Hesami-Kiche).) He stated that the benefits of not paying taxes means it will “be possible to provide more services to the wounded warriors, as well as the cultural and educational system.” (GX 604-T at 2 (emphasis added); Trial Tr. 1834:12-16 (Hesami-Kiche).) Khojasteh was plainly expressing that the stabilization of the New York Foundation would inure to the benefit of the “wounded warriors” of the Government of Iran and support Iranian national charitable purposes. Another handwritten note from Khojasteh to Badr-Taleh (President of the New York Foundation) stated, “Congratulations.” (GX 604-T at 2; Trial Tr. 1834:17-25 (Hesami-Kiche).) The use of the word “congratulations” indicated that Badr-Taleh was a recipient of the authorizations agreed to by others.

         Because the transfer of the Building involved the transfer of all or substantially all of the assets of a New York registered charity, the New York Foundation had to obtain court approval. (See GX 618.) In its submissions to the court for such approval, the New York Foundation deliberately concealed Bank Melli's role in the transaction and the Partnership. For instance, paragraph nine of the petition to the Supreme Court of the County of New York stated that the transfer between Assa and the New York Foundation was an “arms-length transaction.” (Id. at 8.) This was false: The transfer was in fact designed by the Government of Iran, and all pricing terms had been determined by the Government of Iran and its instrument, Bank Melli.

         In response to their submissions, the Attorney General for the State of New York requested further information from the New York Foundation's attorney regarding the identity of the officers, directors, and principals of Assa, and any statement of personal or business relationships between those persons and the New York Foundation. (Id. at 80.) On September 25, 1989, the New York Foundation's attorney responded by stating that, “[t]o the best of [her] knowledge, there were no pre-existing agreements or understandings between any director, officer or principal of ASSA Corp. and the Foundation.” (Id. at 83.) This statement was plainly untrue as there was an understanding that Assa would act for Bank Melli, and that the Government of Iran would ultimately call the shots. Around this time, the President of the New York Foundation (Badr-Taleh) had told the Secretary of the New York Foundation (Hesami-Kiche) that he understood that Bank Melli was the 100% owner of Assa. (Trial Tr. 1840:18-1841:8, 1846:1-5 (Hesami-Kiche).)

         In November 1989, after the Partnership Agreement had been signed, Badr-Taleh (President of the New York Foundation) wrote to Kazem Najafi-Elmi (Director General of Bank Melli Iran) to report that he was “happy to inform [him] that the matter of partnership of ASSA Company and [the] Foundation of New York in the ownership of the building number 650, Fifth Avenue, New York, has been completed and effective the beginning of the month of November 1989. ASSA Company shares 35 percent of the ownership of the building and naturally the same amount of the building's income and costs.” (GX 210-T at 1.) The letter further stated:

Undoubtedly, the course of action for partnership, which took close to 4 months, would not have been feasible at all without the cooperation and assistance, both in ideas and actions, of the brothers, specially dear brother Mohammad Hossain Behdadfar, the international vice president of the bank, and the unceasing cooperation of dear brother Mohammad Karjoo, the director of the New York branch. In all fairness, these two brothers did not refrain from anything in protecting the rights and interests of the Islamic Republic. . . . [They] also help[ed] the Islamic Republic with their commitment, sense of responsibility, creativity and devotion.

(Id. (emphasis added).) The Court finds that the reference to “creativity” in this letter is a reference to the use of Behdadfar as a straw owner of an off-shore entity (Assa) that would hold the Bank Melli shares in the Partnership, and would obscure the Bank's or the Government of Iran's direct involvement. This letter also reflected the Partnership was expected to benefit the Government of Iran itself.

         Karjooravary, who was Director (and, briefly, Deputy Director) of Bank Melli New York during the period from 1986 to 1994, testified live at trial.[36] (Trial Tr. 1150:9-11, 1154:5-1155:5 (Karjooravary).) In February 1990, Karjooravary wrote to Gholamreza Rahi (Director of Bank Melli's Overseas Network Supervisory Department (“ONSD” or “Melliabroad”)), which monitored the activities of overseas branches of Bank Melli). In this letter Karjooravary explained:

In fact the settlement of the $42, 000, 000 loan was done for two important reasons. The first reason was the delay in payment of the loan installments and inability of the [New York] Foundation to repay the loan. The second reason was the [New York] Foundation's tax problem, specifically-because the Foundation's principal was mortgaged, and from the IRS point of view was not exempt from paying taxes like other non-profit organizations-the [New York] Foundation had to pay $3, 000, 000 annually in property taxes out of the rental income of the building, which is the collateral for the above-mentioned loan. As a result, instead of this amount being paid to the bank, the Foundation had to pay the same exact amount to the IRS.
Therefore, to solve the problem of this loss for the bank and the [New York] Foundation, many plans were considered. . . . In this context, after ample study at the New York Foundation, the Central Office of the Foundation, and Bank Melli in Tehran, it was decided to form a company called Assa Channel Islands which would be financed by the bank and under direction of Mr. Behdadfar and Mr. Kakavand.
The establishment of this company was announced to the Foundation in New York . . . .

(GX 161-T at 1 (emphasis added).) This letter is further evidence that the decision-making for the Partnership occurred among individuals and entities other than the Board of the New York Foundation.

         Rahi also testified live at trial.[37] He testified that “the bank” referred to Bank Melli Iran, and that the “Central Office of the Foundation” meant the Iranian Foundation. (Trial Tr. 1057:3-6, 1057:23 (Rahi).) The Court finds that this testimony further supports a determination that the Iranian Foundation was the parent of the New York Foundation. In the same letter to Rahi, Karjooravary recommended the appointment of an accountant to act on behalf of Assa but said that, in the meantime, “it can be managed under the supervision and authorization of the Central Office [of Bank Melli] to avoid paying extensive fees until we find a better solution for managing the company.” (GX 161-T at 2.)

         On August 9, 1990, Karjooravary sent a telex to the ONSD, (Trial Tr. 1253:8-19 (Karjooravary)), the organization of which Rahi was then Director (he later became Director of Bank Melli's New York branch). The telex further confirmed the intentional concealment of Bank Melli's interest in the Partnership. The telex stated:

Since the current attorney of ASSA Company knows the current bank official, it was deemed appropriate that another person would be appointed on the surface. Due to conflict of interest, Mr. Badr and Mr. Firooznia too cannot be appointed as the representative. Since appointing anyone else in New York required us to fully inform him of the nature and the status of the ASSA Company, it was decided that someone from the central office should be determined for this role . . . .

(GX 714-T.) Karjooravary testified that “central office” here meant the central office for Bank Melli. (Trial Tr. 1257:9 (Karjooravary).) Badr-Taleh and Firooznia were perceived as having conflicts of interest because of their work for the New York Foundation. Karjooravary testified that, because Firnooznia already was the independent auditor of the New York Foundation, he had a conflict of interest. (Id. 1256:19-22 (Karjooravary).) The conflict of interest was not of concern to Bank Melli-which was effectively already on all sides of the transaction-but would be from the anticipated perspective of U.S. officials or regulators.

         A representative of the supervisory department of Bank Melli wrote a telex to Karjooravary on August 27, 1990. (GX 154D-T; Trial Tr. 1259:12-14 (Karjooravary)). This telex further supports Badr-Taleh's firsthand knowledge that Assa was owned by Bank Melli. The telex stated that it was to inform Karjooravary:

[A]ctions are being taken regarding the official transfer of the Harter Holding Co. shares [the shares of Assa, owned by Harter Holdings] as well as a change in its management and that of Assa Channel Islands. Therefore, in conjunction with Mr. Badr's views and his preference for announcing the change of management in the company by Mr. Behdadfar via an attorney, I would like to ask you to please immediately obtain the opinion of related consultants, prepare an applicable text in this matter, have it signed by Mr. Behdadfar with the approval of the associated attorney, and then telex it.”

(GX 154D-T (emphasis added).) This statement also indicates that Badr-Taleh understood the nature of Bank Melli's involvement: Behdadfar was a high-level official of Bank Melli. Handwriting on the telex stated that, “regarding Assa Corp., the matter was discussed with Mr. Badr and it was agreed to send the text accepted by the attorney to this agency to be reported via telex.” (Id.; see also GX 154C-T.)

         A few days later, Karjooravary wrote to Rahi (Director of Bank Melli's ONSD). (GX 163-T; Trial Tr. 1263:1-12 (Karjooravary).) The telex stated:

[F]ollowing telex # 1781 regarding Assa Corp, we would like to inform you it appears with formation of Assa Corp. NY there will be no problem transferring the shares of Assa Channel Islands and/or the mother company to Bank Melli. This matter was also discussed with Mr. Firooznia [the New York Foundation's accountant] and he didn't see a problem regarding the transfer because, basically, all that is needed is to execute a general change of ownership and not mention the name of the new owner to the lawyers of Assa Corp of New York. Of course in this manner the transfer of the shares to the bank's name could be done much easier, without mentioning the bank name, if Assa Channel Islands was established with other company.
Therefore, we suggest you ask Mr. Behdadfar to transfer the related shares to the bank's name, inform the Assa Corp lawyers about the facts and circumstances of the transfer without mentioning the bank's name, and send them the introduction to the new directors in accordance with the suggested text of message #1781 dated 08/28/1990. We hope that with his resolve and desire to protect the interests of the bank and the treasury, he can take action to stabilize the issue of Assa Corp as soon as possible. God willing, he can arrange for necessary changes to bring more gains and profits before the deadline for filing the tax declaration letter for the first year of company's establishment.

         (GX 163-T (emphases added).)

         Karjooravary had a number of interactions with Board members of the New York Foundation. He testified that he understood the New York Foundation did not want the name of Bank Melli to be associated with the Building because it might impact rental opportunities or values. (Trial Tr. 1264:9-1265:20 (Karjooravary).) Having such an understanding was important to the execution of Karjooravary's duties and responsibilities because he acted as a point of contact between Bank Melli and the New York Foundation.

         Karjooravary's testimony also supports the unique nature of the Partnership itself. According to Karjooravary, he was unaware of another instance in which Bank Melli satisfied a loan by way of a transaction in which offshore companies were created to own shares in a partnership. (Id. 1674:3-11 (Karjooravary).)

         In late September 1990, Karjooravary wrote a telex to Siavash Naghshineh (Executive Vice President of Bank Melli). (Id. 1277:1-18 (Karjooravary).) Karjooravary's statements demonstrate an understanding that the New York Foundation knew perfectly well that Bank Melli was its true partner:

Following message #1784 dated 08/31/1990 regarding the transfer of the Assa Channel Island shares of the mother company to the bank and the introduction of new directors: I beg to inform you that Mr. Firooznia contacted the bank today and informed them that he has collected the necessary documents to stabilize Assa Corporation's situation. He is now waiting to receive the paperwork from Assa Corp for a final decision. He was worried that it may not be possible to file the declaration letter for Assa Corp for the first year, as well as any necessary changes in the amount of cash and the loan investment, due to not having enough time to file. In any case, he will present the collected information to this agency in the next week for submission to the Central Office. . . . The only pressing items to be completed are those concerning the mother company, namely the ownership transfer and the introduction of the new directors as well as a representative who can receive the Assa Corp documents; expediting these matters will entail meeting many requirements. Mr. Badr doesn't see any problem regarding the transfer of the mother company's ownership or think it will pose an issue to the partnership status; his understanding has always been that the ownership of the mother company was with Bank Melli.

(GX 164-T (emphasis added).)

         Assa's American lawyers also must have known of the continued involvement of Bank Melli in the Partnership. (See GX 425-T; GX 425 at 20.) On December 2, 1990, Naghshineh (Executive Vice President of Bank Melli) advised Peter Livingston (Assa's American lawyer) that “[i]f you have any queries you may also contact Mr. Badr Taleh of the [New York] Foundation, whom we met recently and kindly accepted to deliver this letter, as well as Mr. Behdadafar's letter to you.” (GX 425 at 21-22.)

         On December 14, 1990, Karjooravary wrote to Rahi (Director of Bank Melli's ONSD), stating, “[r]espectfully, per today's telephone conversation, and after our meeting and our consulting sessions in the presence of Misters Badr Taleh, Firooznia, and Livingston, please find the following matters for the information and guidance of the Bank's esteemed management.” (GX 165-T at 2 (emphasis added).) It noted the “positive actions of Misters Badr Tale[h] and Firooznia.” (Id. at 3.) And it went on to state that, “due to Mr. Firooznia's knowledge of the general partnership issues, the fact that he is Iranian and it is easier to discuss various financial problems with him, and in view of the dedication he has shown so far, it is suggested that he continue to be utilized as the financial consultant and the person in charge of preparing and adjusting tax matters.” (Id.)

         Further evidence of the Government of Iran's control of the New York Foundation is evident in a series of documents received by Hesami-Kiche in 1990, which shows a number of financial transfers between bank accounts owned by the New York Foundation and Iran's Mission to the U.N. On July 12, 1990, Badr-Taleh (President of the New York Foundation) requested that Hesami-Kiche (Secretary of the New York Foundation, but also working in Germany for Vena) transfer $150, 000 of the New York Foundation's money to Iran's U.N. Mission. (GX 652-T; GX 635-T; GX 647; GX 629; GX 636.) GX 647 makes the relationship of the New York Foundation to the Iranian Foundation particularly clear: $200, 000 was transferred from the New York Foundation to a German Bank account, and then Hesami-Kiche transferred $150, 000 of it to the Iranian mission at the U.N. (GX 647; Trial Tr. 2013:17-18, 2015:17-18 (Hesami-Kiche).) Hesami-Kiche wrote a letter about this transaction to Seyyed Karim Sobhani (head of international affairs at the Iranian Foundation). (See GX 637-T.) The letter referred to the “transfer of 200, 000.00 dollars from the account of the representative office of the Mostazafan Foundation office in NY to the account of the UN office, showing transfer of 150, 000.00 dollars to the account of Islamic Republic of Iran in the UN which was made as per the instruction of the Foundation . . . .” (Id.) It also warned that “it was not advisable to send money directly from the representative office in NY to the UN office, which is a political organization, as it would cause problems for the Foundation.” (Id.)

         Direct involvement of the Government of Iran in both the Iranian and New York Foundations' affairs continued after the establishment of the Partnership. For instance, in 1990, despite the fact that Shafie had left his position on the Board of the New York Foundation, Kharazi (the Iranian Ambassador to the U.N.) asked Shafie to travel to Iran to assist in transferring the “ideological management” of both the New York and Iranian Foundations to the Ayatollah Khomeini. (Trial Tr. 869:22-870:7 (Shafie).) Around that time, Mohsen Rafighdoost became the head of the Iranian Foundation. (Id. 2018:8-12 (Hesami-Kiche); GX 601-T.) Rafighdoost was appointed to his position directly by the Ayatollah. (Trial Tr. 2019:14-20, 2020:10-11 (Hesami-Kiche).) In September 1990, Rafighdoost was copied on a letter relating to a potential sale of the Building (that did not ultimately occur). (GX 644.)

         In November 1990, Badr-Taleh (President of the New York Foundation) wrote to Kharazi (Iran's Ambassador to the U.N.) regarding a legal claim by Alam Co. against the New York Foundation. (GX 649-T.) In particular, the New York Foundation had loaned Alam, which was “associated [with] the system of Islamic Republic, ” hundreds of thousands of dollars as part of a real estate investment that did not materialize. (Id. at 2.) Badr-Taleh's letter to Kharazi sought assistance because officials from Alam were now suing the Foundation. (Id. at 4.)

         In May 1991, Badr-Taleh (President of the New York Foundation) wrote to Sobhani (Director of International Affairs for the Iranian Foundation) about some of the New York Foundation's real estate investments. (GX 646-T; Trial Tr. 2023:17-20 (Hesami-Kiche).) Badr-Taleh wrote that if the sale of a particular property was profitable, the Foundation “could pay a portion of the investments made by particularly [] the Ministry of Foreign Affairs.” (GX 646-T at 2 (emphases added).) Badr-Taleh then demonstrated his continuing knowledge of the true relationship between the various entities and the need for concealment: “[A]lthough I conveyed all the details of the actions taken by the Foundation, [] the information should not be relayed to others. We should only say that the Mostazafan Foundation of NY is an independent institution and has not any relations with Iran Foundation . . . .” (Id. (emphasis added).) He continued that this was because, “[i]n the past an American individual who had a legal claim against the Foundation, in order to show that there is an affiliation between New York Foundation with Iranian Foundations and proving it to New York State Court and Attorney General, falsely raised the issue of purchasing the building of New York Foundation at a high price with the persons in charge of Iran, but fortunately they replied the New York Foundation is an independent entity and has nothing to do with Iran Foundations and thus they prevented any unpleasant events.” (Id. at 2-3.) He concluded by stating that “the persons in charge of Iran should not interfere in any issue on behalf of New York Foundation, because it could cause difficulties.” (Id. at 3.)

         In 1991, Sobhani (Director of International Affairs for the Iranian Foundation) told Hesami-Kiche that Rafighdoost (head of the Iranian Foundation) wanted to appoint new Board members. (Trial Tr. 2029:24-2030:8 (Hesami-Kiche).) Sobhani stated that this directive ultimately came from the Ayatollah Khameini himself. (Id. 2030:9-10 (Hesami-Kiche).) On May 7, 1991, Hesami-Kiche (Secretary of the New York Foundation and still working for Vena, the German company owned by the Iranian Foundation), Ahmadi (a Board member of the New York Foundation who eventually became President of the New York Foundation and remained in that position until 2013), and Badr-Taleh (President of the New York Foundation) wrote a letter to the Ayatollah Khamenei, referencing that his “directives regarding the replacement of the undersigned . . . were submitted through your representative, Mr. Haj Mohsen Rafighdoost.” (GX 601-T at 1 (emphases added).) They wrote that, “[i]n obedience to the Supreme Leader's directives, we herewith announce our readiness to resign our posts of responsibility at the Most[a]zafan Foundation of New York and our whole hearted willingness to cooperate with forthcoming changes in compliance to laws pertaining to non-profit organizations in America under legal directives of the public prosecutor of New York.” (Id. (emphasis added).) The letter stated that, “under the worst and most sensitive of political conditions between America and Iran, ” they “succeeded in fully protecting and expanding the Foundation's interests which in truth belongs to the people of Iran, ” and successfully carried out “cultural and Islamic activities in the country of the Great Satan which faced an excessive void in the area of Islamic teachings due to the nonrepresentational of the Islamic Republic of Iran.” (Id. (emphasis added).) Badr-Taleh, Hesami-Kiche, and Ahmadi offered to stay on in their positions until their replacements were announced, and noted that they hoped the New York Foundation's activities “will further improve and develop under the view of your Excellency and respected representative in [the Iranian Foundation] and [the New York Foundation].” (Id. at 2.)

         Farsi-language minutes of a May 16, 1991 meeting in Switzerland of the New York Foundation's Board reflect the attendance of several individuals who held positions with the Iranian Foundation. (GX 602-T at 1.) In attendance were Rafighdoost (head of the Iranian Foundation), (Trial Tr. 2031:1-5 (Hesami-Kiche)); Pirayandeh (Board member of the New York Foundation also with the cultural section of the Iranian Foundation), (id. 2031:6-11 (Hesami-Kiche)); Badr-Taleh (President of the New York Foundation), (id. 2013:12-14 (Hesami-Kiche)); Ahmadi (Board member of the New York Foundation), (id. 2013:15-16 (Hesami-Kiche)); Hesami-Kiche (Secretary of the New York Foundation and still employed by Vena), (id. 2031:12-18 (Hesami-Kiche)); Malekzadeh (an advisor for Rafighdoost employed by the Iranian Foundation), (id. 2031:19-20 (Hesami-Kiche)); Sobhani (head of international affairs at the Iranian Foundation), (id. 2031:21-23 (Hesami-Kiche)); and Mahmoud Asghari (head of the New York Foundation's office located in Tehran), [38] (id. 2031:24-2032:1 (Hesami-Kiche)).

         The Farsi-language minutes reflect that this group made changes to the composition of the New York Foundation's Board “as per the orders given by the Supreme Leader . . . .” (GX 602-T at 1 (emphasis added).) Piryandeh would remain in his current capacity, but the new members of the Board of the New York Foundation were Mehdi Hojat (an Iranian official with responsibility for an Iranian governmental entity, “Cultural Heritage”), (Trial Tr. 2032:17-21, 2034:8-10 (Hesami-Kiche)); Mir Sadegh Mirakhor;[39] Seyed Sadr Hanini, also known as Hosseini (a member of the clergy rumored to be a cousin of the leader of the Iranian Revolution), (id. 2034:18-23 (Hesami-Kiche)); and Ali Ebrahimi (the representative of a newspaper in New York owned by the Government of Iran), (id. 2034:24-2035:15). (See also GX 602-T at 1.) At this meeting, the individuals present also discussed matters relating to the charitable works of the New York Foundation. (Id.) No official English-language version of these minutes was created. (See id.; GX 205; Trial Tr. 2038:4-13 (Hesami-Kiche).)

         On May 24, 1991, Badr-Taleh wrote to Sobhani (head of International Affairs of the Iranian Foundation). (GX 624-T.) In that letter, Badr-Taleh informed Sobhani that Kharazi (Iran's Ambassador to the U.N.) had called him and Shafie (former President of the New York Foundation) to his office. (Id. at 1.) He reported that, in the conversation, Kharazi stated: “I (Mister Kharrazi) with the order from Haj Agha in hand, am directly responsible for the Foundation and am the Managing Director of the Board of Trustees[.]” (Id. (emphasis added); Trial Tr. 867:3-9 (Shafie).) Here, “Haj Agha” refers to the Ayatollah Khameini. (See Trial Tr. 2045:5-14 (Hesami-Kiche); GX 605-T at 2.) Badr-Taleh also reported that Kharazi stated that, “from now on, the role of the Managing Director and the role of the Board of Directors will just be a formality and [Kharazi] will be conducting all of its affairs.” (GX 624-T at 1 (emphasis added).) Badr-Taleh requested that Sobhani inform him from whom he should take direction: the Iranian Foundation, or Iran's Ambassador to the U.N. (Trial Tr. 2045:15-20 (Hesami-Kiche); GX 624-T at 1.) He stated that “Kharrazi's involvement poses a great danger to the Foundation, ” demonstrating his understanding of the need for concealment and the dangers associated with direct involvement by the Government of Iran in the affairs of the New York Foundation. (GX 624-T at 1.) The letter continued: “At this time, through the Office of the Mission of Iran (Mister Kharrazi), all those who are in some way connected to the Iranian community . . . have been informed of the primary changes within the Board of Trustees and administration of the Foundation.” (Id.) Badr-Taleh added: “Also, concerning other impending security issues which have arisen in the past few days and need to be dealt with in person: If deemed appropriate, I will travel to Iran alone or together with Mister Shafie and Mister Firooznia [the accountant for the New York Foundation] and submit them to you and Haj Agha [the Ayatollah] in person.” (Id. at 2 (emphasis added).)

         The Board of the New York Foundation met at Kharazi's house in August 1991. At that meeting, Badr-Taleh was replaced as President of the New York Foundation by Mohammad Geramian. Kharazi (Iran's Ambassador to the U.N.) was responsible for Geramian's nomination. (Trial Tr. 880:18-881:11, 882:17-22 (Shafie); DX 535.) Shafie described Kharazi as having “[chosen] the board member[s] and determin[ed] what contract, where to go, what not to do, what not to happen, the control of the foundation.” (Trial Tr. 913:13-15 (Shafie).) Geramian remained President of the New York Foundation until 2007. (DX 5004 ¶ 20.)

         On May 30, 1991, Badr-Taleh wrote to the Ayatollah: “Greetings, I hereby inform your honor of my compliance with your directives concerning my resignation from the Most[a]zafan Foundation of New York, as stated in a letter presented to you by honored brother Rafighdoost [head of the Mostazafan Foundation in Iran]. . . .” (GX 605-T at 2 (emphases added).) “To prevent the dismantlement, or, God forbid, the suffering of any loss to the properties or the interest of the wealth of Bayt Al-Mal, I and the other members of the present Board of Trustees, while continuing our duties, in consultation with the lawyers of the Foundation, and the office of the Attorney General of New York, will assure the legal and smooth transition of the members of the Board of Trustees.” (Id. (emphasis added).) “Bayt Al-Mal” refers to “property belonging to the Government of Iran.” (Trial Tr. 2050:4-7 (Hesami-Kiche).) Badr-Taleh stated that Kharazi had introduced himself “as the President of the Board of Directors.” (GX 605-T at 2.) He stated further that “Kharrazi's appointment to a position of responsibility connected to the Foundation's affairs presents enormous political, security, and economic dangers, [but] we feel assured that the Supreme Leader has made this decision with discernment, unique insight, and a thorough knowledge of all pertaining aspects.” (Id. (emphasis added).)

         Badr-Taleh's letter to the Ayatollah attached a letter from him addressed to Kharazi. (Id. at 4.) That letter, dated May 30, 1991, stated that, “[h]aving received the directive of the Supreme Leader regarding the replacement of four out of the five members of the Board of Trustees [of the New York Foundation] in Zurich, Switzerland through the honored brother, Haj Mohsen Rafighdoost [head of the Iranian Foundation], in obedience to the decision of the Supreme Leader, I along with Doctors Ahmadi and Hesami immediately submitted our resignations to him and brother Rafighdoost.” (Id. (emphases added).) It added that, “[u]nfortunately, your attitude towards the Foundation and me . . . had suffered changes. Your insistence on my immediate resignation and that of other members of the Board of Trustees will result in unfavorable ramifications for the Foundation.” (Id.) He continued, “[h]owever, we will all wholly abide by this decision as it was made through the judgment, wisdom and insight of the Supreme Leader . . . . We are confident that by this directive the Supreme Leader does not intend to cause irreversible damage or to commit wrongful and illegal actions that would cause undue harm to the property of Bayt Al-Mal.” (Id. (emphases added).) He ended by stating that, “I therefore once more announce my sole obedience of the Supreme Leader's orders, but will continue to carry out the daily affairs; preparing for-the-final transition of the Board of Trustees and the individual in charge of the Foundation, until the meeting of the Board of Trustees on August 20th and 21st 1991 in Tehran.” (Id. at 5 (emphasis added).)

         Badr-Taleh wrote to Sobhani (head of international affairs for the Iranian Foundation) on June 3, 1991. (GX 628-T.) In that letter, Badr-Taleh stated that Kharazi had been interviewing Iranian employees of the Foundation in order to take over the Foundation, which “would function under the supervision of the [Iranian] Mission.” (Id. at 1 (emphasis added).) Kharazi had been telling others that “from now on they are the sole direct responsible people for the [New York Foundation] and will control and supervise all activities of the Center.” (Id.) Badr-Taleh also wrote that Shafie and Mahalati, former Presidents of the Foundation, had “through friendly and threatening messages, relayed to me that I should resign soon.” (Id.) He continued that he is “constantly under threat, ” and that others are claiming that he has “divulged [or will divulge] everything to the New York Attorney General.” (Id. at 3 (alteration in original) (emphasis added).) He wrote further that he “and the members of the Board of Trustees of the Foundation, frequently signed affidavits to the American Authorities, such as the Attorney General, Legal Courts, Tax Office and FBI saying that the Foundation is an independent entity and has no connection with the Iranian Government and any affiliate[s] of Iranian authorities.” (Id.) He then expressed concern that they could “be considered in violation according to the laws of America and there will be a heavy crime against us and therefore our situation should be of concern and something has to be done.” (Id.)

         Badr-Taleh's expression of concern did not change any plans for the replacement of members of the Board. Farsi-language minutes of a meeting of the New York Foundation dated July 7, 1991, stated that “[b]ased on the order of his Excellency, Supreme Leader of Iran, a meeting was held to discuss changes of a few individuals in charge of the Mostazafan Foundation of New York, in the presence of Mister Rafighdoost [of the Iranian Foundation], representative of the Supreme Leader at the Most[a]zafan and Janbazan Foundation.” (GX 625-T (emphases added).) The meeting was held in Tehran, at the central office of the Iranian Foundation. (Trial Tr. 2066:9-10 (Hesami-Kiche).) The minutes reflected that Badr-Taleh and Hesami-Kiche resigned from the Board. (See GX 625-T.) The minutes further stated that, “while explaining the possible dangers associated with the appointment of the brothers, and the interference of Doctor Kharrazi in the affairs of the Mostazafan Foundation of New York, they willingly, in obedience to the directives of the Supreme Leader and his respected representative, Mr. Rafighdoost, submitted their resignations.” (Id. (emphasis added).) Additional minutes of this meeting were created in English. (GX 606.)[40] Those minutes provide a different, cleansed explanation for the resignations. Those minutes indicated that Hesami-Kiche resigned due to his “difficulty in commuting to the United State[s] of America and as such can not serve his duties efficiently . . . .” (Id. at 1.) The presence of representatives of the Iranian Foundation is not mentioned in the cleansed, English version. (See id.) Two of the directors appointed to the Board of the New York Foundation by the Ayatollah at the May 1991 meeting (Ebrahimi and Mirakhor) were then “elected” to replace Badr-Taleh and Hesami-Kiche. (Id. at 2.) Ebrahimi remained on the Board of the New York Foundation until 2013; Mirakhor remained on the Board until 2005. (DX 5004 ¶ 20.) In addition, Geramian was selected to be President of the New York Foundation. (GX 606 at 2.) The Court finds it incomprehensible that Ebrahimi and Mirakhor were not aware of these events and of the Ayatollah's involvement in their appointments. Similarly, Geramian must have known of the extensive involvement by the Government of Iran in the affairs of the New York Foundation at this time. Geramian remained on the Board, and served as its President, until 2007. (DX 5004 ¶ 20.)

         The Farsi-language minutes of an August 27, 1992 meeting between individuals from Bank Melli Iran (including Naghshineh), Rahi, and Mohsen Ghadimipour (head of Bank Melli's foreign affairs or international division, (Trial Tr. 1063:2-5, 1078:19-20 (Rahi))) reflected a discussion regarding debts owed by the New York Foundation to Bank Melli. (GX 206-T; Trial Tr. 1078:9-20 (Rahi).) According to Naghshineh, despite misgivings about entering into the Partnership with the Foundation in 1989 and the remaining debt, “he emphasized the bank's commitment to stand by the Foundation.” (GX 206-T at 1.) The minutes also indicated that, “[i]n order to further clarify the framework of the parties' interests and claims, as well as their obligations in case of deviation from the contents of the contract dated July 1989, another meeting in New York was attended by Mr. Geramian [the President of the New York Foundation], Mr. [Seyed Mohammad] Shafaat [the Bank Melli representative in charge of Assa in New York], Mr. Karjooravary [with Bank Melli], and Mr. Firooznia.” (Id. at 2; see also GX 445-T; Trial Tr. 1129:8-19, 1135:1-4 (Rahi).) Here, Geramian is interacting directly with Bank Melli (demonstrating his unambiguous awareness of its involvement).

         In September 1992, Norman Gabay filed a civil action against the Iranian Foundation and New York Foundations to recover damages resulting from the Government of Iran's alleged expropriation of several businesses he owned in Iran. As part of that litigation, Geramian (President of the New York Foundation) submitted an affidavit dated November 5, 1992 in which he wrote that, inter alia, “[t]he New York Foundation conducts no business with the Government of Iran or the [Iranian Foundation], ” (GX 1403 ¶ 3); “[n]one of the officers or directors of the New York Foundation is an officer, official, director, employee or agent of the [Iranian Foundation], ” (id. ¶ 5); and “[t]he New York Foundation has never been the agent or instrumentality of the Government of Iran, ” (id. ¶ 6). During a deposition on November 30, 1995, Geramian again said there was no relationship between the New York Foundation and the Iranian Foundation.[41] (GX 1409 at 6.)

         These statements were false. In August 1992, for example, Geramian met with several Bank Melli officials-including Naghshineh (on Bank Melli's Board of Directors), Rahi (Director of Bank Melli's ONSD), and Karjooravary (Director of Bank Melli New York)-to discuss the Partnership's finances. (GX 206-T.) In November 1992, Geramian also sent a signed copy of his affidavit from the Gabay litigation to the New York Foundation's office in Tehran and wrote in a cover letter that “[i]t is necessary to explain that this defense, according to the facts, indicates the denial of any relationship as well as financial and administrative relations between the government of Iran and Mostazafan and Janbazan. . . . [P]lease take action to cooperate with us to resolve any possible worries in this regard.” (GX 204-T.) The next month, Geramian separately faxed a letter to the International Legal Affairs Department of the Iranian Foundation to let them know that the relevant information related to Gabay's lawsuit had been sent to the New York Foundation's Tehran office, and that they should “contact that office immediately and cooperate with them to resolve the attributed accusations.” (GX 1406-T.)

         Gabay's case eventually was dismissed. (PX 61.) That court in that case found that, inter alia, Gabay had not shown that the Iranian Foundation exercised control over the New York Foundation. (Id. at 4-6.)

         By this point in its history, the New York Foundation already had acquired several pieces of real estate on behalf of the Government of Iran. Concerns regarding exposure of involvement by the Government of Iran led to a desire for further concealment efforts. This is clear from a 1993 letter from Bank Melli Iran to Bank Melli New York regarding the change of ownership of the companies affiliated with Assa. That letter stated: “However, please have them look into whether Mr. Naghshineh-the Assa's New York director whose affiliation with the Bank could be easily be proven-could be replaced with another individual whose affiliation with the Bank could not be easily proven. Would this make it possible to maintain ownership of the building's shares?” (GX 167-T.) Karjooravary responded to Ghafour Memarzadeh (Director General of the International Division of Bank Melli) that “the examinations of this agency pretty much corroborates with the past views; that means it is better to take the necessary steps in regard to the transfer and the change in the ownership so that the bank would not directly or indirectly become the owner.” (GX 450-T.) Karjooravary stated further that “the legal problem of direct ownership of each of the affiliated companies in the United States is defined by local laws and regulations, and the law prohibits banks from purchasing buildings for the purpose of real estate activities. . . . The issue of changing the names of the directors without changing the aforementioned ownership of the mother company will not solve the legal problem of the ownership, though it may be effective from the point of view of protection.” (Id. (emphases added).) He concluded, “[i]n consideration of the above matters, and to avoid any possible problems, my suggestion is to make some kind of arrangement so the above-mentioned ownership can be completely transferred to the other related organization.” (Id.)

         On March 25, 1994, Shafie (former President of the New York Foundation, who continued to act as its agent) wrote a letter to Kharazi (the Iranian Ambassador to the U.N. who had by this point taken over control of the New York Foundation). (GX 661-T.) It started: “In view of the sensitive situation and the tight schedule, you are kindly requested to instruct that a meeting will be held with the presence of me and a few other people you deem appropriate, so that the real estate issues of the Foundation which are now under sensitive and important conditions will be discussed, . . . and thereby we may render worthwhile services to Foundation in the short and long runs.” (Id. (emphases added).) At trial, Shafie testified that, when he set up that meeting, he was hoping Kharazi would bring, among others, Geramian (President of the New York Foundation) and Yaholiah Alidoost (the attorney for the New York Foundation), and that they would go over the affairs of the Foundation. (Trial Tr. 915:18-916:3 (Shafie); GX 1042J at IRS000511; GX 1042H at IRS000350; see also DXs 222-232.) When asked why he provided this level of detail about the Foundation's issues to Kharazi, Shafie testified: “Because they were doing wrongs together with Mr. Geramian, and I was seeing that it's not serving the purpose of the Foundation. I asked Dr. Kharazi to . . . correct this thing.” (Trial Tr. 917:10-15 (Shafie).) In other words, Kharazi was understood to be in control.

         On April 4, 1994, Shafie wrote again to Kharazi seeking to be appointed to manage the Building. (See GX 666-T; Trial Tr. 917:24-918:2, 918:20-919:2 (Shafie).) The letter offered “two proposals for the management of maintenance and a contract to act as representative for the rental works of Bonyad (Foundation) building.” (GX 666-T.) Shafie testified that he went to Kharazi and not Geramian because he “felt that Mr. Geramian is a puppet and Kharazi is running the job.” (Trial Tr. 922:5-6. (Shafie).)

         In June 1994, Bank Melli again communicated with Karjooravary regarding the ownership of Assa. The telex stated: “In fact, Bank Melli Iran, which belongs to the Islamic Republic of Iran and is naturally not subject to current U.S. laws, is the owner of Assa Corporation through two other companies.” (GX 151-T.) The letter from Bank Melli Iran also expressed concerns regarding seizure due to issues between the Government of Iran and the United States. (See id.) Bank Melli New York responded that increased efforts at concealment were appropriate: “[I]n the opinion of the bank's attorney it would be wise to use all possible means to remove the bank's name from the ownership of the mother corporation. In addition issues still remain pertaining to the seizure of the partnership assets due to the reputation of the partnership's partner; their similarity in name to an organization in our country increases the chances of lawsuits and the seizure of the partnership's assets.” (GX 150-T (emphasis added).) At this time, the New York Foundation was still referred to as the Mostazafan Foundation of New York, and the Iranian Foundation was referred to as the Mostazafan or Janbazan Foundation of Iran.

         On July 21, 1994, Bank Melli New York sent a letter to Khajeh Pour (Managing Director of Bank Melli's Special Inspection Team) that stated: “As you have been informed, the above company [Assa] has been established in relation with the partnership with the 650 Building. . . . Since last year, following [the filing of the Gabay complaint] against the partnership's partner and one in which the partnership's building had been mentioned, it seems that management has declared that all of the partnership's affairs be handled by a different entity other than this Agency. Nevertheless, Assa Corporation's legal issues are now being handled by this Agency in connection with the Central Office.” (GX 168-T.)

         In the 1990s, the New York Foundation also continued to grow its real estate portfolio. In particular, it purchased four lots in Queens, New York in 1991 and 1997. (See GX 78.) And it acquired real property in Catharpin, Virginia in 1990. (Id.; PX 50.)

         C. 19 ...


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