Former President of Alavi Foundation Sentenced in Manhattan Federal Court to Three Months in Prison

LawFuel.com – PREET BHARARA, the United States Attorney for the
Southern District of New York, announced that FARSHID JAHEDI, the
former president of the Alavi Foundation, was sentenced today in
Manhattan federal court to three months in prison, after
previously pleading guilty to two felony counts of obstruction of
justice. The charges arose from JAHEDI’s destruction of
documents responsive to a federal grand jury subpoena issued in
the Southern District of New York, concerning the Alavi
Foundation’s relationship with Bank Melli Iran — a bank
controlled by the Government of Iran — and the ownership of an
office tower at 650 Fifth Avenue in Manhattan. The sentence was
imposed by United States District Judge SHIRA A. SCHEINDLIN.
According to the Indictment to which JAHEDI pleaded
guilty, other documents filed in this and related cases, and
statements made during the guilty plea and sentencing
proceedings:

On December 17, 2008, JAHEDI, as president of the Alavi
Foundation, was served with a federal grand jury subpoena. In a
separate civil forfeiture action, the United States has alleged
that the Alavi Foundation — a registered charity in New York
which distributes grants from the rent money it receives from 650
Fifth Avenue — has been providing services to the Government of
Iran.
Pursuant to the International Emergency Economic Powers
Act (“IEEPA”) and the Iranian Transaction Regulations (“ITRs”),
services cannot be provided from the United States to the
Government of Iran unless a valid license has been issued by the
Department of Treasury’s Office of Foreign Assets Control
(“OFAC”).
The subpoena directed to the Alavi Foundation commanded
the production of financial documents concerning the Alavi
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Foundation, Assa Corporation, Assa Company Limited, and 650 Fifth
Avenue Company. The 650 Fifth Avenue Company owns the office
tower at 650 Fifth Avenue; the Company’s ownership is shared by
the Alavi Foundation (60 percent) and Assa Corporation (40
percent). Assa Corporation is in turn owned by Assa Company
Limited, an off-shore company controlled by Bank Melli, which in
turn is controlled by the Government of Iran.
Neither Assa Corporation nor any of its parent
companies had a license to receive and export rent monies from
650 Fifth Avenue to Bank Melli.
The day after the subpoena was served, agents of the
Federal Bureau of Investigation (“FBI”) observed JAHEDI
discarding torn documents into a public trash can, near his thenresidence
in Ardsley, New York. The FBI agents witnessed JAHEDI
as he parked his car near his residence, walked in the opposite
direction of the entrance to his residence toward the trash can,
looked around, jettisoned the torn documents into the trash can,
and then walked to his residence. Upon reassembling certain of
the documents, the FBI determined that the documents referred to
Assa Limited, Assa Company, and 650 Fifth Avenue Company, and
therefore were responsive to the grand jury subpoena.
* * *
JAHEDI was arrested on December 19, 2008. On May 5,
2009, he was charged with the two-count Indictment to which he
pleaded guilty on December 30, 2009. At his plea proceeding,
JAHEDI admitted that, when he tore up the documents, he knew that
the grand jury was investigating financial transactions between
Assa Corporation and the Alavi Foundation, and that the documents
in question concerned such transactions.
In addition to the prison term, JAHEDI was ordered to
pay a $3,000 fine.
In imposing the sentence, Judge SCHEINDLIN stated:
“Obstruction of justice affects the integrity of the entire
justice system and it has to be forcefully deterred.”
Mr. BHARARA praised the investigative work of the FBI
in New York, the New York City Police Department, and the New
York Field Office of the Internal Revenue Service, Criminal
Investigation Division.
Assistant United States Attorneys HARRY A. CHERNOFF and
JOHN P. CRONAN are in charge of the prosecution.
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