Peterson v. 650 Fifth Avenue Company et al

Filing 454

OPINION & ORDER: For the reasons set forth above, and based on the factual findings made by this Court following an evidentiary hearing, Claimants' motion for suppression is DENIED, and as further set forth in this order. (Signed by Judge Katherine B. Forrest on 5/15/2017) (ap)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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IN RE: 650 FIFTH AVENUE AND
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RELATED PROPERTIES
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KATHERINE B. FORREST, District Judge:

USDC SDNY
DOCUMENT
ELECTRONICALLY FILED
DOC #: _________________
DATE FILED: May 15, 2017

08 Civ. 10934 (KBF)
and all member and
related cases
OPINION & ORDER

This is a civil forfeiture action brought by the United States of America (the
“Government”) seeking forfeiture of properties and assets owned by Assa Company
Ltd. and Assa Corporation (together, “Assa”),1 the Alavi Foundation (“Alavi”), and
their partnership the 650 Fifth Avenue Company (“650 Fifth Ave. Co.” or the
“Partnership”) (together with Alavi, “Claimants”). The Government seeks forfeiture
on the grounds that Claimants were controlled by or knowingly provided services to
the Islamic Republic of Iran (“Iran”), that Claimants’ properties and assets
constitute or are traceable to proceeds of criminal activity, and/or that Claimants’
properties and assets were involved in money-laundering transactions.
The most significant asset as to which forfeiture is sought is a commercial
building located at 650 Fifth Avenue in New York, New York (the “Building”) owned
by the Partnership in which Assa has a 40% interest and Alavi has a 60% interest.
There have been assertions that the Building alone is valued at over a billion

On September 16, 2013, the Court granted summary judgment with regard to claims against Assa
(ECF No. 865); Assa did not appeal that decision.
1

dollars. The Government intends to use any forfeiture proceeds obtained to satisfy
judgments held by victims of terrorism (or their estates) perpetrated in whole or in
part by Iran.
This action has been vigorously litigated for a number of years.2 Trial was
previously set to commence on September 9, 2013. On the eve of trial, the Court
indicated that it intended to grant summary judgment to plaintiffs and adjourned
the trial. The Court issued its Opinion & Order on September 16, 2013. (ECF No.
865.) That decision was based primarily on two determinations: First, the Court
determined that Assa was (and is) a front for the Government of Iran and violated
the International Emergency Economic Powers Act (“IEEPA”), certain Iranian
Transaction Regulations (“ITRs”) issued by the U.S. Treasury banning the provision
or export of services to Iran, and federal money-laundering statutes. Second, the
Court determined that Claimants also violated IEEPA and the ITRs because it was
conceded that Claimants provided services to Assa.
The Second Circuit affirmed this Court’s decision granting forfeiture of Assa’s
interest, but reversed and remanded with regard to certain other issues concerning
Claimants. See In re 650 Fifth Ave. & Related Properties, 830 F.3d 66 (2d Cir.
2016). There is no dispute that Alavi is a charitable foundation established by the
Government of Iran prior to the 1979 Iranian Revolution, the work of which

Also before this Court are a number of private turnover actions brought by judgment creditors (the
“Judgment Creditors”) against the 650 Fifth Ave. Co., Alavi Foundation, Assa Corporation, and Assa
Company Limited (the “private turnover actions”). Previously, the Court had coordinated all aspects
of the private turnover actions and the forfeiture action. At present, the cases remain coordinated
for trial.

2

2

involves, inter alia, Muslim educational and religious activities. 650 Fifth Ave. Co.
is a partnership that Alavi and Assa established contemporaneously with Assa’s
incorporation. Despite its name, 650 Fifth Ave. Co. is not a corporate entity but
rather is a partnership organized under New York law.
Following the Second Circuit’s decision, the issues remaining to be tried
include whether Alavi—which, as has been established, knew at the time of its
incorporation and for a period thereafter that Assa was controlled by Iran—
maintained that knowledge subsequent to 1995.3 In 1995, President Clinton issued
a series of Executive Orders pursuant to the IEEPA formally declaring the
Government of Iran a threat to national security and imposing broad financial
sanctions. See Exec. Order No. 12,957, 60 Fed. Reg. 14615 (Mar. 15, 1995); Exec.
Order No. 12,959, 60 Fed. Reg. 24757 (May 6, 1995). If Alavi had the requisite
“post-1995 knowledge,” the property and assets at issue may be subject to
forfeiture;4 if it did not, this case is at an end. A trial on the remaining liability
issues is scheduled to commence on May 30, 2017.
In advance of that trial, certain pretrial motions must be resolved. The most
significant is a motion by Claimants to suppress a large volume of documentary
evidence obtained following the execution of a search warrant on December 19,

As noted, this Court previously determined that there was no triable issue as to Assa being
controlled by Iran and subject to forfeiture of its 40% interest in the Partnership.
3

Alavi’s knowledge is not the sole issue remaining. See In re 650 Fifth Ave. & Related Properties,
830 F.3d 66, 96-97 (2d Cir. 2016). Claimants have also asserted certain defenses, including the
statute of limitations.
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3

2008. Commencing on March 17, 2017, and continuing over the course of four days,
the Court held a suppression hearing. Claimants have expended substantial
resources on this motion; during the suppression hearing, Alavi and the 650 Fifth
Ave. Co. were represented in the courtroom by more than eight, and at times as
many as twelve, lawyers from two major law firms. The Court heard from eight
witnesses; received over ninety documents into evidence; and also received
stipulations from the parties. The evidence concerned, inter alia, the status of the
investigation prior to December 2008, events leading up to the execution of the
warrant, the search and seizures on the day of execution, and the continued review
of seized materials thereafter. While the Court reviews the facts relating to these
events in some detail below, a summary is helpful at the outset.5
On December 19, 2008, agents from the Federal Bureau of Investigation
(“FBI”) obtained a warrant to search offices and a storage space located at 500 Fifth
Avenue, New York, New York used by Alavi and the 650 Fifth Ave. Co. The
warrant was executed the same day. As anticipated in advance, the premises
searched had many documents responsive to the warrant, and ultimately several
hundred boxes of records were seized. In addition, and as provided for in the
warrant, a number of computers were seized. The seized materials were
subsequently reviewed and it was determined that a substantial volume were either

Many of the documents as to which Claimants seek an order of suppression were in fact produced
by Claimants as civil discovery not only in the Government’s civil forfeiture action, but also in the
private turnover actions. At the time the private turnover actions and the civil forfeiture action were
set for trial in the summer of 2013, the same documents were marked by both the Government and
the Judgment Creditors as trial exhibits. The trials are proceeding in a materially similar
coordinated manner on May 30, 2017.
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4

not probative of the issues under investigation or could otherwise be returned to
Claimants. Those records were returned on a rolling basis.
The Second Circuit has determined that the warrant issued on December 19,
2008, was constitutionally deficient insofar as it lacked particularity as to the
crimes at issue. See In re 650 Fifth Ave., 830 F.3d at 99-101. Information relating
to those crimes was contained in an affidavit presented to the issuing magistrate
judge (the Honorable Theodore H. Katz), but that affidavit was not specifically
incorporated by reference into the warrant itself. See id. at 101. This Court is now
tasked with determining whether, given this constitutional deficiency, and in light
of the totality of the circumstances, suppression is appropriate.
For the reasons set forth below, the Court concludes that suppression is not
warranted. Indeed, suppression under the circumstances presented here would
serve no significant salutary purpose but would prevent the use of obviously
relevant evidence at trial.
I.

FINDINGS OF FACT
The Court makes the following findings of fact by a preponderance of the

evidence.
A.

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

In 2006, Counter-Terrorism Squad 7 (“CT-7”) in the FBI’s Counterterrorism
Division in New York opened an investigation of Alavi, Assa, and 650 Fifth Ave. Co.
(March 2017 Suppression Hearing Transcript (“Tr.”) at 24:23-25:20 (Ennis), ECF
No. 1526.) In approximately the third quarter of 2006, Special Agent George Ennis
5

was assigned as case agent for the investigation. (Tr. 25:19-22 (Ennis).) He
remained case agent until he was promoted in late 2009. (Id. 27:25-28:21 (Ennis).)
Ennis testified live at the suppression hearing, and the Court found him credible
and earnest.6 The investigation involved possible criminal violations. Two
Assistant U.S. Attorneys (“AUSAs”) from the Criminal Division for the U.S.
Attorney’s Office for the Southern District of New York (“U.S. Attorney’s Office”),
Harry Chernoff and Eric Snyder, were assigned to work on the investigation. (Id.
354:1-6 (Chernoff).) Only in 2008 were AUSAs from the U.S. Attorney’s Office’s
Asset Forfeiture Unit (“Forfeiture Unit”) assigned to perform their review of the
matter. (Id. 354:5-13 (Chernoff).)
The Court found Chernoff to be a highly credible witness. He was thoughtful
and careful with his answers and displayed candor. Chernoff testified that among
the possible crimes that were being investigated at the outset were violations of the
IEEPA and a money-laundering conspiracy. (Id. 354:21-355:2 (Chernoff).) The
money-laundering investigation concerned not only possible IEEPA violations (and
a conspiracy to launder its proceeds) but also a tax conspiracy. (Id. 357:2-15
(Chernoff).) The IRS was also involved in the investigation as a result. (Id. 357:12-

The Court notes that Ennis misrembered the order in which certain events relating to when the
search warrant and affidavit were drafted in relation to when he learned that Alavi’s president,
Fashid Jahedi, had attempted to destroy documents sought by a grand jury subpoena. For instance,
he initially testified that the search warrant resulted from learning about the destruction of
documents by the head of the Alavi Foundation. As it turned out, while that fact certainly
contributed to the urgency with which the search warrant was executed, drafting of the warrant and
supporting affidavit had largely been completed when those events occurred. While the crossexamination was vigorous on these points and demonstrated faulty memory, it does not alter the
Court’s overall view as to Ennis’s credibility.
6

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14 (Chernoff).) Chernoff testified that as part of this investigation into possible
conspiracies, they were investigating acts in furtherance of a conspiracy outside of
the date of the applicable statute. (Id. 360:5-8 (Chernoff).) This was particularly
relevant to the conduct at issue in the violations of the IEEPA, which was only
enacted in 1995; according to Chernoff, the criminal investigation involved events
that predated 1995 in order support the conspiracy allegations. (Id. 359:23-25
(Chernoff).) As discussed below, Chernoff’s testimony in this regard was
corroborated by Ennis and the then-chief of the Forfeiture Unit, Sharon Cohen
Levin.
As case agent, Ennis was responsible for all aspects of the investigation:
administrative, tactical, and investigative. (Id. 25:23-26:1 (Ennis).) He was “in
charge” of the case and had responsibility for the case file. (Id. 25:24-26:3 (Ennis).)
In 2007, Special Agent George Alexander was assigned to act as his co-case agent.
(Id. 26:9-10, 26:24-27:2 (Ennis).) A number of other agents from CT-7 as well as
Counter-Terrorism Squad 9 (“CT-9”) assisted in the investigation. (See id. 27:11-21,
130:15-22 (Ennis).)
The investigation focused on the relationship between Alavi, Assa, and the
Government of Iran. This included the circumstances surrounding a 1989
transaction in which Alavi transferred its 100% interest in the Building, which was
subject to a Bank Melli Iran mortgage, to the newly formed partnership between

7

Assa and Alavi, the “650 Fifth Ave. Company.”7 Assa contributed over $40 million
to 650 Fifth Ave. Co. and, in exchange, received a 35% interest (later modified to
40%) in 650 Fifth Ave. Co. As part of this set of transactions, Bank Melli, which
ultimately owned Assa, cancelled the mortgage it held on the Building.
Early in the 2006 investigation, the FBI obtained information and
documents/records from a confidential source who had served as a board member of
Alavi from 1982 to 1991. (See Tr. 48:8-15, 147:7-22 (Ennis); Claimants’ Exhibit
(“CLX”) D at 1.) The source stated that Alavi was controlled by Iran and that it
received revenue from a building located on Fifth Avenue in New York. (See CLX D
at 2.) In the course of the investigation, agents also interviewed a number of
witnesses. Among these were Gholamreza Rahi, a former Bank Melli Iran official;
Mohammad Dehghani Tafti, who at the time was Assa’s sole officer, and
Mohammad Geramian, who was Alavi’s President from approximately 1992 until
2007. (Tr. 49:20-55:10 (Ennis).) In February 2008, as a result of a search warrant
issued by the New York State Supreme Court, the FBI also obtained documents
from a residence in Queens, New York that was owned by Bank Melli Iran. (Id.
113:21-25, 128:2-9 (Ennis); see GX 9 ¶ 82.)
In the fall of 2008, the then-chief of the Terrorism and National Security Unit
of the U.S. Attorney’s Office discussed the investigation with AUSA Sharon Levin,

Among the theories pursued in the investigation was whether money laundering occurred in
connection with tax violations. This theory was based upon events tracing back to 1989, when the
partnership was formed. (See Tr. 265:10-13 (Ennis).)
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who was then chief of the Forfeiture Unit.8 (Id. 699:25-14, 700:4-5 (Levin).) At this
time, Levin had over fifteen years of experience as an AUSA in the Southern
District of New York. She became Chief of the Forfeiture Unit in 1996. She
testified live at the suppression hearing. The Court found her highly credible and
reliable, and she exhibited a natural and thoughtful demeanor. The Court credits
the entirety of her testimony and feels very comfortable placing great reliance on it.
Levin testified that, as of the time she was assigned to work on the forfeiture
matter at issue here, there was a concern that funds held by Assa in the United
States (which were generated from rental income from the Building) were at risk of
being transferred overseas for the benefit of Bank Melli Iran. (Id. 701:1-25.) She
testified credibly that after being familiarized with the investigation to date, she
believed there was a basis to seize the funds from rental income generated by the
Building at 650 Fifth Avenue as well as the Building itself. (Id. 702:18-25, 703:1-6
(Levin).) Levin knew that the criminal investigation was also continuing. (Id.
705:13-15 (Levin).)
Thereafter, Levin and the Forfeiture Unit assisted in preparing an
application for seizure of these accounts as proceeds of violations of the IEEPA and
property involved in money-laundering transactions; the Forfeiture Unit also began
exploring the possible forfeiture of the Building. (Id. 701:1-703:13 (Levin).) The
seizure warrants were issued shortly thereafter, in late October 2008. (See id.

The Asset Forfeiture Unit was later renamed the Money Laundering and Asset Forfeiture Unit
(they are referred to herein as the “Forfeiture Unit”).
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9

704:17-19 (Levin).) Levin testified that this seizure started a “clock” at the U.S.
Attorney’s Office and that they needed to file the civil forfeiture action within a
relatively short time thereafter. (Id. 709:11-16 (Levin).)
Between 2006 and prior to the date on which the first civil forfeiture action
was filed (December 17, 2008), the investigation included interviews of confidential
sources; interviews with other witnesses; subpoenas and review of bank records;
phone records; physical surveillance; and consensual monitoring by the confidential
source. (Id. 45:6-46:1 (Ennis).) In addition, emails were obtained through the
District Attorney’s office. (Id. 45:19-24 (Ennis).)
According to Ennis, before the civil forfeiture complaint was filed on
December 17, 2008, the FBI concluded that both Assa and Alavi were controlled by
the Government of Iran. (Id. 46:12-18 (Ennis).) The FBI viewed Bank Melli Iran as
owning and controlling Assa, Alavi as aware that Bank Melli Iran owned and
controlled Assa, and Alavi itself as subject to the ultimate supervision and control of
the Government of Iran. (Id. 49:20-55:10 (Ennis).) Ennis and his team had also
developed information prior to December 2008 that supported two purposes of the
650 Fifth Ave. Co. partnership: to eliminate a tax burden, and to hide the fact that
both Alavi and its partner were controlled by the Government of Iran. (Id. 47:3-11
(Ennis).) Ennis also learned through his investigation (and prior to December 2008)
that the Alavi Foundation was a “wholly owned vehicle of the Government of Iran.
It was used to perpetuate its objectives on the United States.” (Id. 47:19-21
(Ennis).) In addition, the control by the Government of Iran related to “all aspects
10

of any major decisions . . . any decision where funding was going to go, any decision
on personnel, members of the board, or anything of import was all either ordered
from Tehran or approved by Tehran.” (Id. 47:25-48:5 (Ennis).) Ennis testified
credibly that prior to December 2008, interviews with witnesses, physical records,
as well as surveillance of members of the Alavi Foundation and officials from the
Government of Iran supported these conclusions. (Id. 48:10-22 (Ennis).) In fact,
Jahedi, Alavi’s president, had been seen meeting with the Iranian Ambassador to
the United Nations. (Id. 49:1-3 (Ennis).) Email traffic between members of the
Alavi Board and the Iranian mission or Iranian Government further supported
these conclusions. (Id. 49:4-8 (Ennis).) During interviews (the last of which
occurred in the fall of 2008) with Muhammad Dehgavi Tafti, who was the sole
employee and president of Assa, the FBI heard that Assa was controlled by the
Government of Iran. (Id. 51:6-8 (Ennis).) Tafti informed the FBI that Assa was
controlled by Bank Melli Iran and he knew that Bank Melli Iran was controlled by
the Government of Iran. (Id. 52:7-11 (Ennis).)
Among the investigations the FBI had conducted after the investigation
commenced in 2006 but prior to December 2008 was one of Muhammad Geramian.
(Id. 52:12-18 (Ennis).)9 Geramian had been a president of the Alavi Foundation for
a substantial period of time. (Id. 52:19-25 (Ennis).) Ennis recalled that he may
have been president until sometime in 2007 or 2008. (Id. 52:21-25 (Ennis).) During

Geramian provided conflicting information over the course of his interviews. The Court credits
Ennis’s testimony that the FBI believed Geramian’s first version of events to be the more accurate.
9

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an initial interview, Geramian told the FBI that Alavi was controlled by the
Government of Iran, and that all business decisions, personnel decisions, and
financial transactions, were controlled by the Government of Iran. (Id. 53:7-17
(Ennis).) Another interview that also occurred after the investigation commenced in
2006 but prior to December 2008 was that of Rahi, the former head of Bank Melli
New York. (Id. 54:25-55:1 (Ennis).) Rahi informed the FBI that Bank Melli Iran
controlled Assa and also controlled the “entire partnership” between Alavi and
Assa. (Id. 55:7-10 (Ennis).)
Ennis testified credibly that prior to the time the complaint was filed in
December 2008, the FBI had already taken steps to obtain documents by way of
subpoenas and discovery in the action filed against Assa. (Id. 58:21-23 (Ennis).)
Levin also testified credibly that not all of the information known as a result
of the investigation was included in the complaint filed in December 2008. (Id. 706:
19-22 (Levin).) She testified that they did not want to publicly disclose certain
details about Alavi’s involvement. (Id. 706:23-707:19 (Levin).) At the suppression
hearing, Levin explained that a conscious decision was made to exclude certain
details about Alavi’s involvement in the creation of 650 Fifth Ave. Co. and
relationship with Iran from the Complaint. (Id. 706:19-707:19 (Levin).) Ennis
confirmed that in his credible testimony. Ennis testified that the FBI and U.S.
Attorney’s Office wanted to continue their investigation using their confidential
source and that they did not want to cut short any investigative opportunities that
that might provide. (Id. 61:4-8 (Ennis).) According to Ennis, whom the Court
12

credited, if the information revealed by the confidential source was revealed in the
affidavit supporting the search warrant or the complaint, the physical safety of the
source and his family could be endangered. (Id. 80:15-25, 82:18-21 (Ennis).)
Ennis further testified that, in all events, the final decision-making authority
as to when to file a complaint against Alavi was with the U.S. Attorney’s Office. On
behalf of that office, Levin testified credibly that a decision was made in an effort to
proceed cautiously for a number of reasons: For example, there was a desire to
coordinate with various Judgment Creditors who also might seek to assert an
interest in Alavi’s property; there was a desire to coordinate with the U.S.
Treasury’s Office of Foreign Asset Control (“OFAC”); the Forfeiture Unit was trying
to work with AUSAs in the terrorism unit who were still engaging in a criminal
investigation into Alavi; and there were sensitivities about bringing a forfeiture
action against a New York charity. (Id. 706:19-709-9; 712:13-713:22.)10

Claimants allege that further information about Alavi was not included in the Complaint because
the Government lacked sufficient evidence at the time to forfeit Alavi’s interest in the Building. (See
Alavi Foundation and 650 Fifth Avenue Company’s Post-Hearing Memorandum of Law in Support of
Their Motion to Suppress (“Mem. in Supp.”) at 5-6, ECF. No. 1574.) The Court finds that this theory
is not supported by the evidence in the record and presented at the suppression hearing. The author
of the email cited by Claimants that said there were “significant evidentiary and legal issues,”
Chernoff, testified live at the suppression hearing, and the Court found him credible. (See CLX N.)
He testified that in this email, the legal and evidentiary hurdles referred to seizures of assets in 25
different districts where property was located. (Tr. 365:22-366:4 (Chernoff).) He denied that there
was insufficient evidence to bring a forfeiture action against Alavi as of December 17, 2008. (Id.
366:8-17 (Chernoff).) It is true that co-case agent George Alexander testified that it was the “view” of
the “U.S. Attorney’s Office” that they did not have enough evidence to proceed against Alavi at that
time. (Id. 566: 6-15 (Alexander).) However, the Court does not rely on this testimony as competent
evidence as to what the “view” of the U.S. Attorney’s Office was at that time. Alexander was an
agent working with the FBI—he was not a lawyer, and certainly not an AUSA. The Court credits
the testimony of both Chernoff and Levin, along with the extensive evidence as discussed below as to
what evidence in fact existed as of December 17, 2008, to support its finding that there was sufficient
evidence as of that time.
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As Levin explained, forfeiture of Alavi’s interest in the Building was
separated into a second litigation and later “phase.” (Id. 707:20-708:4; 712:13713:22; 740:14-741:8 (Levin).) Levin testified that nevertheless, in her opinion,
there was sufficient evidence at the time of the filing of the complaint to also file a
forfeiture action with respect to Alavi. (Id. 709:4-10; 735:4-736:1; 760:17-22
(Levin).)
1.

Complaint Against Assa

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

On December 24, 2008, one week after the Government filed its in rem forfeiture action, the
Greenbaum judgment creditor group filed the first of the private turnover actions. (See Case No. 09cv-553, ECF No. 1; see also Kirschenbaum v. 650 Fifth Ave. & Related Properties, 830 F.3d 107, 122
(2d Cir. 2016), cert. denied sub nom. Alavi Found. v. Kirschenbaum, 136 S. Ct. 1332 (Mar. 20, 2017).)
The Greenbaum action named both Alavi and 650 Fifth Ave. Co., as well as Assa, as defendants. As
to Alavi, it alleged, inter alia, that “[u]pon information and belief, Iran exercises day-to-day control
over the operations of the [Alavi] Foundation by and through its president, Jahedi Farshid . . . .”
(Case No. 09-cv-553, ECF No. 1 Ex. A ¶ 11.) The Greenbaum petition—as with the subsequently
filed private turnover actions—seeks execution and turnover of Claimants’ properties and assets
pursuant to the Foreign Sovereign Immunities Act (“FSIA”), 28 U.S.C. § 1605(a)(3) (2016), and § 201
of the Terrorism Risk Insurance Act of 2002 (“TRIA”), Pub. L. No. 107-297, 116 Stat. 2322 (2002).
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The in rem civil forfeiture action asserted that the Claimants’ assets and
properties were “subject to seizure and forfeiture pursuant to 18 U.S.C.
§ 981(a)(1)(C), as property constituting or derived from proceeds traceable to
violations of the International Emergency Economic Powers Act (“IEEPA”), codified
at 50 U.S.C. § 1701 et seq. [and were also subject to seizure and forfeiture] pursuant
to 18 U.S.C. § 981(a)(1)(A), as property involved in or traceable to money laundering
and attempted money laundering transactions, in violation of 18 U.S.C. §§ 1956 and
1957, and as property traceable to such property.” (ECF No. 1 at ¶ 2.)
The Complaint outlined the alleged IEEPA violations as being based on the
1995 statutory provisions of the Iranian Transaction Regulations (“ITRs”), which
“generally prohibit (1) the exportation, sale or supply, directly or indirectly, by a
United States person or from the United States, of any goods, technology or services
to Iran or the Government of Iran, and (2) the engagement by United States
persons in any transaction or dealing, in or related to goods, technology or services,
for exportation to Iran or the Government of Iran, without having first obtained a
valid license from the United States Department of Treasury, Office of Foreign
Asset Control (‘OFAC’).” (Id. ¶ 7.) According to the Complaint, Assa Corp. had been
providing “numerous services to Bank Melli in contravention of the ITRs, including
transferring rental income generated from the Fifth Avenue Company to Bank
Melli, following Bank Melli’s instructions with regards to Assa Corp.’s affairs,
reporting back to Bank Melli on Assa Corp.’s financial situation and business
dealings, and managing the affairs of Assa Corp. for the benefit of Bank Melli.” (Id.
15

¶ 17.) The Complaint alleged that the organization of Assa, and the transfer of a
40% interest in the premises located at 650 Fifth Avenue, traced back to when the
Building was first constructed by way of a loan from Bank Melli Iran to what was
then the Pahlavi Foundation (and later became the Alavi Foundation). (Id. ¶¶ 1824.) The history of that loan and its repayment by way of an ownership interest in
a partnership organized for the explicit purpose of managing the Building are at the
heart of the allegations.
Prior to filing of the Complaint, OFAC had been looking into designating
Assa as a front for Bank Melli Iran. OFAC ultimately coordinated that designation
(which was made simultaneously) with the filing of the Complaint on December 17,
2008. (See Tr. 705:24-706:5 (Levin).) Thus, the Court finds that had the
Government chosen to proceed with a forfeiture action against Alavi in December
2008, it had ample factual support to do so.
2.

Protective Order

Alavi and 650 Fifth Ave. Co. were named in a Post-Complaint Protective
Order (the “Protective Order”) pursuant to 18 U.S.C. § 983(j)(1), entered by the
Court on December 17, 2008, the same day that the Government filed the civil
forfeiture Complaint against Assa and 650 Fifth Ave. Co. (ECF No. 2.) The
Protective Order provided, inter alia:
2.
All persons and entities having actual knowledge of this Protective
Order shall not, directly or indirectly, destroy any documents relating in any
manner or part to the allegations in the Complaint, including but not limited
to the books and records of the Fifth Avenue Company, the Pahlavi
Foundation, the Mostazafan Foundation, the Alavi Foundation, Assa
Company Ltd., and/or Bank Melli.
16

Maintaining the Property
3.
The Management Company and the Fifth Avenue Company shall
maintain all books and records in their possession, custody and/or control,
that relate in any manner or part to the Fifth Avenue Company, the
Mostazafan Foundation, the Alavi Foundation, Assa Corporation, Assa
Company Ltd., Bank Melli and/or the allegations in the Complaint.
...
6.
The Fifth Avenue Company and the Management Company shall make
available for inspection to the United States, or its designee, the books and
records of the Fifth Avenue Company.
(Id. ¶¶ 2, 3, 6.)
The Court finds that the Protective Order required that the very same
records seized and determined relevant to this action be preserved.
3.

Events Leading up to the Search

On December 17, 2008—the same day the civil forfeiture Complaint was
filed—agents from the FBI and New York Police Department (“NYPD”) conducted a
series of interviews with individuals employed by Assa, 650 Fifth Avenue, and the
Alavi Foundation. Among the interviewing agents were Special Agent Jonathan C.
Scott and Detective Michael Esposito. (GX 3.) These interviews were conducted at
500 Fifth Avenue, where each of these entities shared offices and the same premises
that were searched on December 19, 2008.
Among those interviewed was President of the Alavi Foundation, Farshid
Jahedi, along with several others. (GX 3; see also Tr. 57:23-58:3 (Ennis).) In a
memorandum of the interview with Jahedi, the agent noted that when they
requested an interview, Jahedi called his lawyer. Thereafter, he consented to
17

proceed with the interview. The memorandum noted that “[i]nitially, Jahedi
advised that he did not know what Assa Corp. (Assa) was. After further
questioning regarding its association with the Alavi Foundation of New York
(AFNY), Jahedi stated that Assa held 40% of 650 Fifth Avenue (650). AFNY
possessed 60% of the 650 real estate partnership.” (GX 3 at FBI164121.) The
memorandum further noted that “[a]ll of AFNY’s incoming funds are received from
650. Incoming funds received from 650 are distributed 60% into AFNY and 40%
into Assa. . . .” (Id. at FBI164122.) Jahedi explained that at some point in 2007 he
withheld payments from Assa; then, he took funds owed to Assa and “reinvested”
Assa’s funds back into the 650 Fifth Avenue building. (Id.) He considered this a
“loan” from Assa. (Id.) The memorandum noted that “Jahedi’s experience in
dealing with finances and budgets originated from his various employments in Iran.
He was the Deputy President of Tehran University, formerly known as National
University . . . . In Iran, Jahedi was also employed at the Remote Sensing Center
(RSC), a United Nations backed program involving technology pertaining to
satellite pictures of land. The RSC is no longer in existence.” (Id. at FBI164123.)
During the interviews, agents saw a large volume of documents in the offices
and, further, learned that there was a storage unit in the basement that contained
two hundred or more boxes of records dating back thirty years. Based on the
evidence developed at the suppression hearing, the Court finds that it was
reasonable for the FBI agents to view both the current and historical materials as to

18

the nature of the relationship between Alavi, Assa, the Partnership, and Iran as
probative regarding the crimes under investigation.
As the FBI was leaving 500 Fifth Avenue the afternoon of December 17, an
agent served Jahedi with a grand jury subpoena directed to Alavi and relating to
the FBI’s ongoing and active criminal investigation into violations of IEEPA and
two anti-money-laundering statutes. (See GX 3 at REV-FBI001953-1955.) The
subpoena commanded that on December 30, 2008, Alavi produce “any and all
documents relating or referring to” Assa Corporation, Assa Ltd., Bank Melli Iran,
and 650 Fifth Ave. Co. from January 1, 1989 to the present. (Id.) The scope of the
request included but was not limited to the following categories of documents:
a. Contracts and/or agreements relating to financial transactions of
any type and kind, including sale, purchase, rental, management,
lease or transfer of ownership;
b. Financial statements;
c. Deposit slips and deposit items to which the slips relate (front and
back);
d. Cancelled checks;
e. Payment receipts;
f. Records of transfer of funds by wire, collection, or internal transfer
(incoming and outgoing);
g. Correspondence, to include e-mails, faxes, etc.
(GX 6 at 3.) The Court finds that this subpoena materially covers the relevant
documents seized two days later, on December 19, 2008.
The FBI placed a surveillance team on Jahedi after he had been served with
the grand jury subpoena. (Tr. 64:17-20 (Ennis); GX 4.) The surveillance was
instituted outside of the premises at 500 Fifth Avenue. (GX 4.)

19

While certain agents were surveilling Jahedi, Ennis was communicating with
the U.S. Attorney’s Office to prepare a search warrant of the premises. (See Tr.
369:9-13 (Chernoff).) Preparation of the search warrant and Ennis’s accompanying
affidavit began in the early afternoon of December 18, 2008. (Id.) The evidence at
the suppression hearing amply supports probable cause for a search warrant of the
premises as of that time. The FBI’s investigation had revealed a strong basis to
support probable cause for Alavi and 650 Fifth Ave. Co.’s participation in one or
more crimes.
Later that afternoon, FBI agents followed Jahedi as he traveled by car to his
home in Westchester. At one point, they observed Jahedi pulling into the Ardsley
train station, exiting his car, and depositing torn documents into a public trash can.
(GX 4.) Reconstruction of these documents indicated that they were among those
required to be produced in response to the Alavi Subpoena; those documents
separately happened to be covered by the Protective Order. (See GXs 4, 5; Tr.
515:21-24 (Alexander).)
Before Ennis learned of the destruction of documents, the search warrant
was essentially complete. (Tr.372:4-10, 378:5-12 (Chernoff).) The AUSA working on
the warrant and accompanying affidavit was Harry Chernoff. (Id.) In connection
with his duties and responsibilities as an AUSA, Chernoff had already worked on

20

numerous warrants and supporting affidavits (none of which, to his knowledge,
have resulted in suppression).13
Events moved quickly after the surveillance team saw Jahedi attempting to
destroy documents. Ennis arrived at his office in Manhattan early on the morning
of December 19, 2008. The search warrant and his affidavit were ready to be
submitted to the Court. But the events of the prior evening added urgency to the
matter and it was decided that the search would occur that day, and that Ennis
would not be able to accompany team. Ennis was needed at the office to work with
the AUSA to prepare a criminal complaint seeking Jahedi’s arrest. Ennis executed
his affidavit supporting the search warrant, it was presented to Judge Katz for
signature early in the day, and the team was immediately ready to execute it
thereafter.
Ennis also signed the criminal complaint against Jahedi (alleging obstruction
of justice based upon his attempted destruction of documents sought by the grand
jury subpoena) on December 19, and it was also presented to the Court and signed
by Magistrate Judge Katz that same day. (GX 6.) The complaint detailed the
events that had occurred the prior evening relating to the destruction of documents,
and sought a warrant for Jahedi’s arrest. (Id. at 4.) The need for a search warrant
to issue before further documents could be destroyed, together with the need to
draft a criminal complaint for Jahedi’s arrest, required quick work by the

In connection with his training as an AUSA (and in addition to his basic legal training), Chernoff
received training in how to draft search warrants and supporting materials. (Tr. 380:16-381:9
(Chernoff).)
13

21

Government’s attorneys on multiple fronts. The Court finds that the need for
expeditiousness was the primary reason the search warrant was likely not
identified as deficient prior to presentation to Magistrate Judge Katz.14
B.

The Warrant and Supporting Affidavit

Ennis testified regarding the typical practices followed by FBI agents in the
New York Office, and followed here, with regard to obtaining a search warrant. The
Court credits this testimony. (Tr. 33:9-34:11 (Ennis).) In particular, the Court finds
that the conduct here did not deviate in any material way from reasonable, typical
practice.
Once a case agent and his team believe there is sufficient evidence to support
probable cause for a search—that is, probable cause to believe a crime has been or is
about to be committed—he would contact an AUSA assigned to the matter to
discuss next steps. Ennis did that here. It is the practice in the New York Office for
the AUSA to draft the actual warrant and the supporting affidavit, and that
occurred here. Typically, and as occurred here, once a warrant and supporting
affidavit are drafted for him, Ennis would review it and ensure accuracy. The
warrant and affidavit are then typically, and as occurred here, approved by
supervising counsel within the U.S. Attorney’s Office. After the approval of the
supervising attorney is obtained, the assigned AUSA and the agent—as occurred

The Court is not suggesting that the “exigent circumstances” exception to the constitutional
warrant requirement applies here. See, e.g., Kentucky v. King, 563 U.S. 452 (2011); Brigham City v.
Stuart, 547 U.S. 398 (2006). Rather, as a factual matter, the totality of circumstances under which
the Government attorneys prepared the warrant application is relevant to good faith, and the
circumstances here created a need for expeditiousness.
14

22

here—take the warrant and affidavit to a judge for review and approval. (See
generally Tr. 33:3-36:25 (Ennis).)
The warrant and supporting affidavit of Ennis (“Ennis Aff.”) were reviewed
by a supervisor at the U.S Attorney’s Office and presented to Magistrate Judge
Katz on the morning of December 19, 2008. Magistrate Judge Katz reviewed and
signed the warrant. Attached to the Ennis Affidavit as Exhibit B was the Verified
Complaint, filed on December 17, 2008. That complaint consists of more than
nineteen pages of factual allegations. (See GX 7.)
At the outset of his affidavit, Ennis set forth his qualifications: as of
December 2008, he had been a Special Agent for seventeen years and for the past
two years had been assigned to a “group that focuses on terrorism financing.”
(Ennis Aff. ¶ 1.)15 His duties involved investigating material support of terrorism,
money laundering, and violations of IEEPA. (Id.) As of December 19, 2008, Ennis
had participated in executing approximately thirty search warrants. (Id.)
Paragraph 3 of his affidavit clearly identifies the crimes under investigation.
(Id. ¶ 3.) Ennis stated that the seizure of items set forth in “Exhibit A,” attached to
his affidavit, were believed to “constitute evidence, fruits and/or instrumentalities
of, among other crimes, violations of the International Emergency Economic Powers
Act Title 50, United States Code, Sections 1701 through 1706, and Title 31, Code of
Federal Regulations, Section 595 et. Seq., the money laundering statutes, Title 18,

The Ennis Affidavit and its exhibits were admitted as GX 7; the affidavit and its exhibits can also
be found at ECF No. 568-1.
15

23

§§ 1956 and 1957, and the mail fraud, wire fraud and related conspiracy statutes,
Title 18, United States Code, sections 1341, 1343, and 1349.” (Id.)
Ennis then summarized certain allegations set forth at some length in the
Complaint, which had been filed two days previously. He stated that the
“transactions underlying Bank Melli’s acquisition of its interest in the Building” in
1989 was “not an arms-length transaction with Alavi, but rather a structure both to
evade Alavi’s tax liability and to conceal Bank Melli’s interest in the Building.” (Id.
¶ 5.) Based on this and other facts set forth in the Complaint, Ennis asserted that
there was “probable cause to believe that Alavi committed the same crimes” as
alleged in the Complaint, and that “Alavi and its directors, employees, and other
agents, committed, conspired to commit, and aided and abetted the same violations
by Alavi and Bank Melli, among others.” (Id.) Ennis recited that Alavi maintains
its offices at the Building, and the Building also housed files with respect to 650
Fifth Ave. Co. (Id. ¶ 6.)
Ennis recited that subsequent to the filing of the Complaint on December 17,
2008, he and other law enforcement agents had conducted a series of interviews
with Alavi directors, personnel, and agents. (Id.) Among the interviews conducted
as relevant to the investigation was one with the portfolio manager for the real
estate company that manages the Building on behalf of the Partnership. (Id.) The
portfolio manager indicated that a storage unit located at 500 Fifth Avenue
contained historical files dating back approximately thirty years. (Id.) As of 2008,
that meant that records might exist for the period when the allegedly non-arms24

length relationship between Alavi, Bank Melli Iran, and Assa began: 1978. This
was a fact important to the investigation.
Ennis further explained that law enforcement had interviewed the president
of Alavi, and that he had also stated that he possessed records of Alavi dating back
thirty years. (Id. ¶ 7.) During the interview (which occurred at Alavi’s offices at
500 Fifth Avenue), agents observed numerous file cabinets and other furniture that
apparently contained files and records. (Id.) Based on his experience, Ennis stated
that he believed the premises contained “extensive records and documents . . . that
are of the kind listed in Exhibit A.” (Id. ¶ 9.) Ennis further stated that “[t]hese
records are likely to reveal important aspects and details of the crimes committed
by Alavi and Assa Corp., among others, as well as the location of the substantial
proceeds from these crimes.” (Id.)
The final section of Ennis’s affidavit discussed the importance of obtaining
computers and electronic media. (See id. ¶¶ 11-12.) According to Ennis,
“businesses involved in commercial rentals, investments, mortgages and real estate
transactions routinely use computers and computer-related equipment.” (Id. ¶ 11.)
“Computers are typically used to communicate with other parties through e-mail,
and to generate documents and recordings concerning leases, rent receipts, and
other aspects of transactions with tenants.” (Id.) Attached as Exhibit C to his

25

affidavit (and referred to in ¶ 12) were the “specific methods to be employed relating
to the search of any computer-related equipment.”16 (See id. ¶ 12, Ex. C.)
In sum, the affidavit describes the basis for the warrant as arising from
information gathered during the course of an investigation into Alavi, Assa, and
Bank Melli Iran. (Id. ¶ 4.) Bank Melli Iran was then and continues to be the
Central Bank of Iran; it is an entity owned and controlled by the Iranian
Government. According to Ennis, the investigation concerned a 1989 transaction
involving the Building, which was constructed with a loan made in the 1970s by
Bank Melli Iran to a predecessor of Alavi. (Id.) Facts developed as part of the
investigation indicated that in 1989, in order to avoid certain tax liabilities, Alavi
repaid the loan by giving Bank Melli Iran a 40% interest in the Building through an
off-shore entity (Assa) set up by Bank Melli Iran to receive and own that asset. (Id.)
The affidavit did not include all of the information known to the FBI as of
December 2008. Ennis testified credibly that they did not want to include certain
information because it could chill certain sources, and possibly endanger their
welfare. (See, e.g., Tr. 80:15-25; 81:17-18; 82:12-13; 82:25-83:4 (Ennis).)

Exhibit C consists of four single-spaced pages describing a search protocol for electronic media as
well as the reasons therefore. (See Ennis Aff. Ex. C.) The protocol describes the impracticability of
an on-site search given the volume. (See id. ¶ 1(c).) In particular, data-storage capabilities at that
time allowed the equivalent of as much as 7.5 million pages to reside on a computer’s hard drive.
(Id.) But in addition, off-site methods were needed to enable the search for concealed data. (Id.
¶ 1(d).) The evidence at the hearing was consistent with the agents following the protocol set forth
in Exhibit C.
16

26

1.

Items to Be Seized

Exhibit A to the Ennis Affidavit sets forth the “Items to be Seized at the
Premises.” It states:
1. Any and all documents, including contracts, memoranda of
understanding, partnership agreements, incorporation documents, deeds,
mortgages, loan documentation, rentals, leases, records of payments, emails, letters, memoranda or other documents or records concerning or
relating to the ownership of, rental of, mortgaging of, or in vesting in the
following entities:
a.
b.
c.
d.
e.

Assa Corporation
Assa Company Limited
650 Fifth Avenue Company
650 Fifth Avenue, New York, New York
Bank Melli Iran

2. Any and all documents concerning or relating to financial books and
records, bank accounts, disbursements, money transfers or employment
records of Assa Corporation; Assa Company Limited; 650 Fifth Avenue
Company; Bank Melli Iran; the Alavi Foundation; or any of the officers or
employees of these entities.
3. Any and all computers; central processing units; external and internal
drives; external and internal storage equipment or media; computerized
data storage devices; hard disks or floppy disks; CD-ROMs, hard disks,
floppy disks; and related or connected computer or data storage
equipment.
(Ennis Aff. Ex. A (footnote omitted).)
2.

Role of the Records Sought

Ennis testified that prior to December 19, 2008, the FBI’s investigation
indicated that Assa did not have an office, but that its records were maintained at
500 Fifth Avenue, along with Alavi’s and the 650 Fifth Ave. Co. partnership’s
records. (Tr. 76:23-77:17 (Ennis), see also id. 234:11-17 (Ennis).) Hanieh
Safakamal, Alavi’s former bookkeeper, also testified at the hearing; she was a
27

witness called by Claimants. (Id. 284:19-332:17 (Safakamal).) She similarly
testified that both Alavi and the 650 Fifth Avenue Partnership’s documents were
located at the offices at 500 Fifth Avenue. (Id. 287:25-288:2, 289:1-3, 290:19-23
(Safakamal).)
It is clear from the description of activities at issue in the Complaint and the
Ennis Affidavit that the relationship of Assa, Alavi, and their Partnership, the 650
Fifth Ave. Co., was at the heart of the FBI’s investigation.17 Whether Alavi knew
that it was dealing with an entity owned and/or controlled, directly or indirectly, by
Iran was central to the alleged IEEPA and ITR violations. In 1995, IEEPA and the
related ITRs made dealing with Iran in goods or services, directly or indirectly,
unlawful. See 31 C.F.R. §§ 560.203, 560.204. Of course, this raises the question of
whether any particular entity is Iran or an entity owned and/or controlled, directly
or indirectly, by Iran, or is acting on behalf of Iran. See 31 C.F.R. § 560.304. It is
plain that in the absence of an admission as to this element, this fact must be
proven. Thus, to prove an IEEPA and ITR violation, the Government had the
burden of establishing that Assa was owned and/or controlled by Iran, and that
Alavi and the 650 Fifth Ave. Co. had (since 1995) been providing goods and/or
services, or otherwise transacting with Iran, directly or indirectly. Evidence
supportive of Iran’s involvement in the establishment of Assa is therefore a critical
predicate fact. Proof of this would necessarily be based on an understanding of

As stated elsewhere, this was also known to those involved in the investigation, as corroborated by
Ennis’s testimony, among that of others.
17

28

what Alavi knew about Assa prior to 1995—when IEEPA and the ITRs went into
effect.18 In other words, central to the alleged crimes giving rise to probable cause
in the Ennis Affidavit for the search was an assertion that prior to 1995 and then
continuing past 1995, Alavi knew that it was engaging in transactions with an
entity owned and/or controlled by Iran. Historical records tracing the relationships
between the entities were thus directly probative of these alleged violations.
At the evidentiary suppression hearing, Alavi and 650 Fifth Ave. Co. spent
significant time on questioning witnesses as to how records predating 1995 could
possibly be relevant. Repeatedly, counsel sought acknowledgement from witnesses
that the IEEPA statutory scheme at issue was only effective as of 1995. In their
various submissions in support of its motion, Claimants point out that old records
were gathered, and argue that this is supportive of an objectively unreasonable
search. This argument is without merit and fails to appreciate the Government’s
theory in its Complaint, filed in 2008 and incorporated by reference into the Ennis
Affidavit submitted in connection with the warrant.
Ennis testified credibly at trial that prior to December 19, 2008, the FBI’s
investigation lead them to conclude that the entire timeframe—going back to the
1970s—would be probative of whether a crime had occurred. (See, e.g., Tr. 78:10-24
(Ennis).) Ennis testified that historical documents “would show the history of the
control by the Government of Iran of the foundation prior to the partnership, how
the government directed the foundation,” and the instructions by the government as

18

The ITRs were not effective until 1997, but were retroactive to 1995. See 31 C.F.R. § 560.204.

29

to how the partnership was to be run. (Id. 88:18-25-89:2 (Ennis).) This was
reasonable.
The financial books and records sought by paragraph 2 would show money
transfers highly relevant to a money-laundering investigation. (Id. 89:24-90:4
(Ennis).) Employee records were necessary to trace the identity of witnesses as well
as whether Iran was in fact making personnel decisions, as they had been told. (Id.
90:9-19 (Ennis).)
In terms of computers and electronic media, Ennis testified credibly that in
his experience, such media were merely different containers for the same type of
information sought elsewhere on Attachment A. (Id. 91:7-12 (Ennis).)
In addition, the Ennis Affidavit describes money laundering and financial
transactions generally prohibited under IEEPA and the ITRs as among the
transactions giving rise to probable cause. The Ennis Affidavit and incorporated
Complaint describe rents to commercial tenants in the Building as providing
millions of dollars in income allegedly transferred to Iran. Use of funds obtained by
way of operations of the Partnership was thus potentially supportive of these
assertions.
Levin similarly testified credibly that the formation of the 650 Fifth Avenue
partnership was at the core of the case, along with the various relationships
between Assa, Alavi, and Bank Melli Iran; as Bank Melli Iran had held the original
mortgage on the building going back to the 1970s, and satisfaction of that mortgage

30

was a key event in the creation of the Partnership as well as the Assa entities,
tracing that history was critical. (Id. 809:8-810:5 (Levin).)
In short, the Government’s theory of their investigation of Alavi and 650
Fifth Ave. Co. fully supports the categories of documents sought. While those
categories are certainly broad—seeking as they do “any and all documents”—there
are instances when such breadth may be appropriate, and this was one of them.
At the suppression hearing, Ennis testified credibly as to the specific
investigative purpose for each category of records sought. With regard to deeds,
mortgages, loan documents, rentals, etc., Ennis testified that they would be
relevant to the relationship between Assa, Alavi, and their Partnership. The
partnership agreement would show the parameters of the relationship, and the
mortgages and loan documentation would allow the FBI to better understand the
receipt and flow of money; similarly rental receipts could show distributions
between the partners. (Id. 87:11-20 (Ennis).) Emails and letters would also tend to
show communications between these entities; records of payments could be expected
to, again, show the flow of payments. (Id. 88:1-6 (Ennis).)
C.

Execution of the Search Warrant19

Ennis assembled the team that was to conduct the search. (Tr. 95:6-10
(Ennis).) He called the supervisor of CT-7 (and his supervisor), Ari Papadacos, and

During the period prior to December 2008, the FBI assigned to the Southern District of New York
received training on proper search procedures both at Quantico, as part of their initial training, and
periodically there or elsewhere thereafter. (Tr. 29:3-25, 31:19-21, 32:5-6.) Included in this training
were updates on case law and appropriate practices relating to search procedures. (Id. 29:23-25,
32:20-24, 33:3-5.) Part of that training includes the level of specificity needed in a search warrant.
(Id. 35:5-8.)
19

31

made a number of additional telephone calls. (Id. 95:12-20 (Ennis).) The team that
executed the search is reflected on the sign-in sheet for the search team. (GX 8.)
That sheet reflects the following participants in the search who had personal
knowledge of the Alavi investigation: Ari Papadacos, Jonathan Scott (an agent on
Ennis’s squad, and one of the participants in the interview of Jahedi on December
17, 2008, (see GX 3)), Michelle Clark (who later married and now carries the last
name “Nicolet”) (a Special Agent assigned to CT-7), Summer Ives (an intelligence
analyst for CT-7), Pamela Brown (an intelligence analyst assigned to CT-9), Steve
Gonzalez, Dan McWilliams (who as assigned to CT-9 and working the case full
time), and George Alexander (the co-case agent). (GX 8, Tr. 98:14-25; 99:1-25;
100:1-16 (Ennis).) Ennis testified credibly that almost all of the individuals
involved in executing the search, as reflected in the sign-in sheet (GX 8), were either
assigned to CT-7 or CT-9 and had familiarity with the investigation. (Tr. 100:17-21;
245:3-4 (Ennis).) Special Agent Clark (Nicolet) who, as described below, was the
team leader for the search, also testified credibly that most members of the search
team were assigned to either CT-7 or CT-9. (Id. 414:20-23 (Nicolet).)
Ennis testified credibly that he specifically recalled speaking with Papadacos
and Alexander, and possibly others, about the search before it commenced. (Id.
101:12-15 (Ennis).) Based upon the information he had, he expected that the search
team would gather a large volume of documents. This was based on the nature of
the investigation, not a plan to “take everything.” He and others knew about the
interviews that had occurred on December 17, 2008, and that there was a
32

significant volume of material believed to be responsive in the offices and described
as within the associated storage facility.
Prior to execution of any search warrant in the New York Office, an
“operation plan” or “ops plan” is prepared. That occurred here. (Id. 39:14-21
(Ennis).) The ops plan discusses the details of how the search will be executed. (Id.)
Generally, the case agent prepares the ops plan, and Ennis did so here. (See id.
39:22-23 (Ennis).) An “ops briefing” of the team that will participate in executing
the search occurs thereafter. (Id. 40:22-41:5 (Ennis).)20 An ops briefing includes
review of the search warrant as well as an explanation of the evidence that the
team will be looking for at the location. (Id. 41:6-14 (Ennis).)
The team responsible for executing the search warrant at 500 Fifth Avenue
participated in an ops briefing at approximately 10:30 a.m. on December 19, 2008.
(Id. 415:18-25 (Nicolet).) The briefing included the members of the search team,
almost all of whom, as stated above, were from one of two counter-terrorism squads,
CT-7 and CT-9. (Id. 414:20-23 (Ennis).) At the briefing, the warrant was read and
the agents assigned to execute the search were familiarized with what they would
be searching for. (Id. 244:14-22 (Ennis), 415:6-21 (Nicolet).)
The search team leader for the search was Special Agent Michelle Clark
(Nicolet), a lawyer and member of CT-7. (Id. 408:5-10; 411:14-20 (Nicolet).) Clark
(Nicolet) had been assigned to CT-7 in 2008 and remained there until 2010. (Id.

Ennis did not participate in the actual ops briefing, but he testified credibly that he received a
report about it from others on the search team.
20

33

406:16-20 (Nicolet).) She was chosen because she was assigned to CT-7 and had
knowledge about the case. (Id. 414:1-4 (Nicolet).)21
As of December 2008, Clark (Nicolet) understood that the investigation into
Alavi and the 650 Fifth Ave. Co. concerned money laundering and potential IEEPA
violations. (Id. 410:7-14, 451:11-16 (Nicolet).) Clark (Nicolet) had assisted in
various elements of the investigation prior to the search and testified that she also
had an increased knowledge of the substance of the case given that she was from
the same squad as co-case agent Alexander and had participated in interviews of
witnesses in connection with the case. (Id. 410:22-411:4, 413:24-414:4 (Nicolet).) In
addition, she had personally participated in interviews relating to the case shortly
prior to when the search warrant was executed. (Id. 411:1-4 (Nicolet).)
The Court notes that it found Clark (Nicolet) highly credible based on her
testimony at the live suppression hearing.22 Clark (Nicolet) answered the questions
asked of her carefully and thoroughly. Clark (Nicolet) testified that prior to the
search on December 19, 2008, she had previously worked on ten to fifteen search

Clark (Nicolet) testified that the personnel assigned to CT-7 had offices in a bullpen setup and that
it was common to gain familiarity with the cases to which others in the squad were assigned. She
was quite familiar with the cases of the other special agents in CT-7 based on daily interactions. (Id.
409:18-23 (Nicolet).) The members of CT-7 also had meetings as a group from time to time; at these
meetings the cases the members of the squad were working on would be discussed. (Id. 410:1-3
(Nicolet).)
21

Clark (Nicolet) is a trained lawyer. She graduated from the University of Virginia School of Law
in 2002 and practiced for two years in the litigation department of the law firm Willkie Farr &
Gallagher LLP. (Tr. 408:9-20. (Nicolet)) She has found her legal training helpful in her work as a
special agent for the FBI. (Id. 408:23-25 (Nicolet).)
22

34

warrant executions. (Id. 411:5-8 (Nicolet).) The Court found Clark (Nicolet) was
highly knowledgeable with regard to the relevant issues.23
Prior to the search, Clark (Nicolet) reviewed the search warrant and Exhibit
A thereto to familiarize herself with the types of items that were permissible for
seizure. (Id. 415:6-13 (Nicolet).) These were also made available to the other
members of the search team for their review prior to the search. (Id. 415:15-25
(Nicolet).) Clark (Nicolet) understood that the team expected to gather a high
volume of documents. (Id. 417:1-18 (Nicolet).)24 As part of her responsibilities as
team leader she gathered supplies and paperwork for the search. She brought
copies of the search warrant and Attachment A with her so that she could consult
them as needed during the search. (Id. 418:17-419:3 (Nicolet).)
Clark (Nicolet) testified that the search warrant did not appear unusual to
her—or different from other search warrants she had been involved in executing.
(Id. 416:13-16 (Nicolet).)
Execution of the search itself began at approximately 12:17 p.m. on December
19, 2008. Among others, the search team included four members of the evidence
response team (“ERT”). (Id. 425:2-13 (Nicolet).) ERT members receive extra
training in searching techniques. (Id. 425:16-19 (Nicolet).) The search team also

Clark (Nicolet) testified that she received training from the FBI policies and procedures for
executing search warrants. (Tr. 445:19-22 (Nicolet).) She understood that in executing a search
warrant the FBI could not engage in a general exploratory search and take whatever they wanted
(Id. 446:19-22, 448:20-22 (Nicolet).) She applied this knowledge here.
23

Clark (Nicolet) noted that because the agents thought there were going to be a fairly high volume
of documents, she prepared labels in advance of the search, which were necessary and would enable
the search to be as efficient as possible. (Tr. 418:1-16 (Nicolet).)
24

35

include members of the computer analysis response team (“CART”). (Id. 426:3-21
(Nicolet).)
After an initial walkthrough of the premises, entry photographs were taken
to document the condition of the premises pre-search. Clark (Nicolet) assigned
individual members of the search team to particular areas and they began
searching the premises. (Id. 420:11-22 (Nicolet).) During the search, Clark
(Nicolet) answered questions about, inter alia, whether certain items fell within the
parameters of Exhibit A to the warrant. (Id. 421:21-4:22-1 (Nicolet).) As described
above, a number of individuals who were participating in the search had familiarity
with the investigation. During the search, Clark (Nicolet) was moving back and
forth between the suite of offices and the storage space, answering any questions
the searching agents might have. (Id. 421:14-20 (Nicolet).) Among the questions
she was asked was whether a particular item fell within Attachment A or not. She
was able to answer certain questions to determine based on the face of the
Attachment; others required her to call on information she had gleaned based on
her knowledge of the investigation. (Id. 421:25-422:15 (Nicolet).) In certain
instances, she also consulted Ari Papadacos (the supervisor of the case agents Ennis
and Alexander) or one of the case agents. (Id. 422:11-15 (Nicolet).) Not every item
as to which a question arose was ultimately seized. (Id. 422:16-21 (Nicolet).)
Clark (Nicolet) testified credibly that neither she nor anyone else instructed
the search team to box up all records of whatever nature and take them. (Id. 423:7-

36

14 (Nicolet).) She believed that the team made reasonable efforts to seize
documents that fell within the scope of the warrant. (Id. 505:18-24 (Nicolet).)25
Clark (Nicolet) testified that when it came time to search Jahedi’s office, she
emphasized to the search team the need to be particularly vigilant about only
taking documents that fell within the scope of the warrant. (Id. 424:11-425:3
(Nicolet).) She testified that she wanted to make sure that neither she nor other
agents got swept up by the idea that everything has evidentiary value—and there
was attention on maintaining vigilance as to the proper scope of the search. (Id.
424:20-425:1 (Nicolet).) The Court credits this testimony.
As they would finish searching one area, they would reallocate personnel to
another area. (Id. 421:18-20 (Nicolet).) Before and after photographs taken of the
main office suite area demonstrates that while many documents were taken, others
were left behind. (GXs 50-57.) For instance, a comparison of GXs 50 and 50A
demonstrates that certain items were left behind in the desk area of the entry; GXs
51 and 51A of an office space similarly shows the area before and after the search.
GX 51A clearly shows a number of items remaining on the bookcase following the
search. Similarly, GXs 52 and 52A show that papers and other items were not
seized. The remaining photographs (to GX 57) similarly show materials not seized.
(See generally Tr. 432:1-438:25 (Nicolet).)

Case Agent Alexander joined the search while it was in progress. (Tr. 517:19-21 (Alexander).) He
personally participated in the search of Safakamal’s office. He testified credibly that his search of
her office conformed to his general practice of reviewing individual files and separating materials
responsive to the search warrant from those that were non-responsive. (Id. 519: 24-25, 520:1-6.) As
he reviewed documents in the office, certain items were seized and certain items were left behind.
(Id. 520:13-16.)
25

37

During the search of the basement, the search team “spot-check[ed]” certain
boxes that bore labels to ensure that the types of items inside the box were
consistent with the label on the outside of the box and fell within the parameters of
Exhibit A to the warrant. (Id. 429:11-19 (Nicolet).) Clark (Nicolet) explained that
the basement was a fairly small space with a lot of items; the space was not suitable
for on-site review. (Id. 429:1-22; 486:4-11 (Nicolet).) The Court finds that it would
in fact have been impractical to review the documents within the storage space.26
The storage space measured only fifteen feet by fifteen feet with many items and no
work space. (Tr. 429:3-10 (Nicolet).) Clark (Nicolet) testified credibly that the team
did not seize every item that was in the basement storage area. (Id. 429:20-22
(Nicolet).) This is corroborated by the before and after photographs of the area.
(CLX AL.)
Similarly, Clark (Nicolet) testified credibly that it was impractical to search
the computers on site. (Tr. 427:1-25 (Nicolet).) The Court finds that, as a matter of
fact, this was correct. This was because the volume of material expected to be
maintained on the computer was prohibitively large for an on-site search, because
different computers run different software and require specific tools, and because of
the possibility that computers could be “booby trap[ped]” to destroy evidence if not
handled properly. (Id. 427:10-25 (Nicolet).)

The practicalities were impacted by the fact that the search occurred on the day of a snow storm.
(Tr. 106:24, 107:2 (Ennis).)
26

38

Ultimately, over 200 boxes of materials as well as multiple computers were
taken from the premises. (See id. 104:19-21 (Ennis); 475:4-7 (Nicolet).)27
When the evidence was brought back to the New York Office, it was secured
in a controlled environment. Ennis, Alexander, and McWilliams sorted through the
documents. (Id. 110:24-111:15 (Ennis).) As non-responsive documents were
identified, they were boxed up and returned to Alavi’s offices on a rolling basis. (Id.
112:9-16, 238:11-18, 239:6-9 (Ennis).)
A. Special Agent (Ret.) Braziel
Claimants called former Special Agent Charlotte Braziel to testify live at the
suppression hearing. Braziel had been assigned to the FBI’s Tampa Office for the
majority of her career. She was never assigned to the New York Office. Claimants
sought to qualify Braziel as “an expert in FBI procedures and protocols for
obtaining and search warrants . . . [and] as an expert also in training for obtaining
search warrants, FBI procedure for obtaining search warrants.” (Tr. 631:3-5; 634:59 (Braziel).) The Government opposed Braziel’s qualification as a general expert in
this regard—and specifically with regard to whether her knowledge and experience
were relevant to the FBI’s practices in the New York Office. The Court allowed
Braziel to testify but reserved the question of whether it would qualify her as an

The evidence at the suppression hearing indicated that certain documents protected by the
attorney-client privilege were inadvertently seized. The Court credits the testimony of the witnesses
that there were no affirmative attempt to seize such materials but, as it turned out, certain such
items were within the other materials taken. The Court credits the testimony of case agent
Alexander that when, during his subsequent review of seized documents, he identified a document
potentially subject to the privilege, he would isolate it for the taint team. The Court specifically
finds that while this process was by no means perfect, it was conducted in good faith and according
to practices within the district at the time. (See, e.g., Tr. 525:14-527:15 (Alexander).)
27

39

expert. (Id. 634:20-25 (Braziel).) Having now heard from Braziel on both direct and
cross examination, and having reviewed the documents the parties used with her
during that examination, the Court concludes that while she certainly has
extensive experience as a former Special Agent, including regarding the execution of
search warrants, she lacks the particular expertise regarding the practices of the
FBI in connection with its New York Office. She also lacks the necessary level of
expertise in connection with the type and size of investigations handled by the New
York Office. The Court therefore finds that she is not qualified to testify as an
expert in this matter (though no doubt she may be qualified as an expert in other
matters more directly related to her experience). As Braziel is not a percipient
witness—she lacks any firsthand knowledge of the facts in this matter at all—her
testimony is therefore irrelevant to this proceeding.
The Court’s view of Braziel was based upon a number of things. First,
Braziel testified clearly and forthrightly that her knowledge primarily concerns the
FBI’s practices and procedures at the Tampa, Florida division, where she worked
during the entirety of her career. (See Tr. 625:9-15 (Braziel).) The size and
particular procedures utilized in cases handled by the Tampa division often differed
from those in the New York field office. (See, e.g., id. 658:1-659:13; 660:4-15; 664:214 (Braziel).)28 Moreover, while Braziel purported to opine on the overbreadth of
the search warrant in this case, and the variation of the search procedures used

In all events, Braziel acknowledged that she was involved in searches that were “pretty inclusive”
and broadly sought all records of a company. (See Tr. 678:25-679:4 (Braziel).) She likewise
acknowledged that reviewing the documents from a search could take years, as it had in certain
searches that she had been involved with. (Id. 681:11-14 (Braziel).)
28

40

here from those that she believed were more appropriate, the Government’s crossexamination demonstrated that she had personally been involved in executing
warrants in a manner not materially different from that here, and with a similar
breadth of records seized. (See, e.g., GXs 60, 64, 67, 68.)
In this regard, Braziel testified that she always recalled the statutory
violations being investigated as included in the search warrants she executed, and
that if one was not in the warrant, she would ask for it to be put in. (Tr. 676:5-9
(Braziel).) However, the evidence demonstrated that in the largest search in which
she had been involved, of “Wellcare,” that was not the case. (GX 60; see also Tr.
677: 17-19 (Braziel).) Similarly, she participated in a search of “Bane Medical
Services” in which the warrant did not contain the statutes at issue in the warrant
itself; she conceded that in such an instance she was comfortable because the
affidavit had the necessary detail. (GX 64.) The statute at issue was also absent
from the warrant of “Clearwater,” another entity as to which Braziel participated in
the search. (Tr. 686:10-22 (Braziel).) In none of the Wellcare, Bane or Clearwater
warrants is the affidavit incorporated by reference. (GXs 60, 64, 67.)
In addition, while Braziel testified that she found the items to be seized in
the Alavi warrant to be excessively broad, she conceded that the Wellcare warrant
essentially sought all records within a particular timeframe. (Tr. 678:22-679:12
(Braziel).) In addition, Braziel testified that ultimately over 700 items were taken
during that search and reviewed over the course of the next two years. (Id. 680:1924 (Braziel).) The subsequent review in fact entailed the work of 800 people in over
41

160 sessions. (Id. 681:11-14 (Braziel).) Braziel further testified that from time to
time detail was included only in the affidavit supporting the warrant and not the
warrant itself. (Id. 683:15-22, 684:12-14 (Braziel).) Braziel also conceded that it
was appropriate to obtain information used to assist agents in the search from
speaking with agents involved in the investigation. (Id. 688:2-7 (Braziel).)
In sum, the Court does not find that Braziel is an expert in the FBI search
practices applicable to the New York Office. But, in any event, the Court finds that
the Government’s cross-examination revealed that in certain instances the search
warrant and search practices she had utilized were not materially different from
those she was criticizing here.
D. Amended Complaint Adding Claimants’ Interests
In August or September of 2009, the U.S. Attorney’s Office began preparing
to amend the Complaint to add Claimants’ interest in the Building. (Tr. 727:2-5
(Levin).) Ultimately, a Verified Amended Complaint (the “Amended Complaint”),
seeking forfeiture of Alavi’s and the 650 Fifth Ave. Co.’s property interests in the
Building and certain other properties was filed on November 12, 2009. (GX 9.)
In the time between when the Complaint and the Amended Complaint were
filed, the FBI and U.S. Attorney’s Office continued to develop its investigation
against Alavi. Ongoing investigation is common and, indeed, to be expected. For
instance, Levin testified that when the Complaint was filed, there were a large
number of documents that the investigative team possessed from searches of the
residence of the President of Bank Melli, and from the confidential source, but that
42

these had not yet analyzed. (Tr. 728:4-16 (Levin).) In addition, around the summer
of 2009, the team acquired funding that it previously lacked to utilize the services of
a Farsi translator to translate a number of documents—some of these documents
had been provided by the confidential source and many others had been acquired
from the search of the Bank Melli Iran residence. (Id. 728:24-729:8 (Levin).)29
As previously noted, Levin testified that there was sufficient evidence at the
time of the filing of the Complaint in 2008 to file a forfeiture action with respect to
Alavi’s interests in the Building. (Id. 709:4-10; 735:4-736:1; 760:17-22 (Levin).)30
She explained that from the outset, and based on evidence possessed prior to filing
of the Complaint, the premise of the case was that Alavi and Assa had knowingly
entered into the Partnership to conceal Bank Melli’s interest and were violating
IEEPA by providing services to Iran. (Id. 735:4-736:1 (Levin).)
Levin acknowledged that the Amended Complaint contained some allegations
that referenced documents seized during the December 19, 2008 search of Alavi’s
office. (Id. 795:9-796:1 (Levin); see GX 9 ¶¶ 69-74.) She confirmed, however, that

Some of these documents that were translated were specifically referenced in the Amended
Complaint. (Tr. 731:6-20 (Levin).)
29

Counsel for Claimants questioned Levin regarding an email (GX 23; CX L) that she sent in
November 2008 to the head of the Asset Forfeiture, Money Laundering Unit for the Department of
Justice, stating: “With respect to the forfeiture, we believe that through the investigation we will
obtain sufficient probable cause to file on the entire building (we are at about 40 percent now).” (Tr.
752:18-755:14 (Levin).) Claimants have argued that this email supports that the Forfeiture Unit did
not have sufficient evidence to file a forfeiture action with respect to Alavi before the search and
seizure of Alavi’s office at 500 Fifth Avenue. Levin explained that while the email may have been
inartfully dratted, the Forfeiture Unit had sufficient evidence against Alavi at that time, (id. 764:110 (Levin)), but that the evidence had not yet been fully reviewed and marshalled together as
presented in the Amended Complaint (id.; see also id. 736:2-737:6 (Levin).) Levin further noted that
the investigation progressed between when she sent that email in November 2008 and when the
Amended Complaint was filed in December 2008. (Id. 759:10-18 (Levin).)
30

43

much of the information discussed in such allegations (for example, a meeting
between Jahedi and the Iranian Ambassador to the United Nations) was also
contained in documents (such as journals from Alireza Ibrahimi) that the
investigative team possessed prior to the search of Alavi’s offices. (Tr. 816:24817:11 (Levin).) Indeed, a substantial number of the allegations in the Amended
Complaint referenced documents that the Government possessed when it seized
Assa’s accounts and filed the Complaint against Assa. (See, e.g., GX 9 ¶¶ 28 (from a
search of the Bank Melli president’s residence prior to December 2008); 32 (received
from a confidential source before December 2008); 33 (also received from the
confidential source prior to December 2008); 34 (same); 35 (same); 36 (same); 37
(same); 38 (same); 39 (same); 40 (from a search of the Bank Melli Iran’s president’s
residence prior to December 2008); 43-46 (based on documents also received before
December 2008); 50 (from the confidential source before December 2008); 52 (same);
54 (same); 56 (same); 57 (same); 58 (same); 60 (same); 63 (same); 64 (learned from
Rahi during an interview before December 2008); 77 (from surveillance before
December 2008); 81 (learned from Geramian before December 2008); 82 (from a
search of the Bank Melli Iran’s president’s residence before December 2008); 83-88
(same); 89-90 (learned from an interview of Geramian that occurred before
December 2008); 96 (from a search of the Bank Melli Iran’s president’s residence
before December 2008); see generally Tr. 113:9-130:11 (Ennis).) 31 This testimony

Claimants point to an email from Chernoff (the lead criminal AUSA) to Raskin, then Chief of the
Terrorism Division of the U.S. Attorney’s Office, as support for their argument that there were
“significant evidentiary and legal” hurdles to bringing a claim then. (CLX N.) According to
Claimants, it follows that the materials obtained as a result of the search were therefore necessary
31

44

by Ennis was consistent with that generally recalled by Levin. (Tr. 728:24-729:18
(Levin).)
E.

Preservation and Production of the Documents at Issue

Prior to the seizure, Claimants already had a legal obligation to preserve the
records at issue. Immediately following the filing of the Complaint on December 17,
2008, the Government sought and received a protective order (“Protective Order”),
requiring preservation of the very records here at issue.
On January 6, 2009, counsel for Alavi and the 650 Fifth Ave. Co., Daniel S.
Ruzumna (who has remained as counsel to those entities to the present), wrote to
counsel for the Government in the civil forfeiture litigation. In that letter, he
stated: “I write to address certain production requirements set forth in the
December 17, 2008 Post-Complaint Protective Order (the ‘Protective Order’).” (Jan.
6, 2009, Letter from Daniel S. Ruzumna, Esq., to AUSA Sharon Levin (“Ruzumna
Jan. 2009 Letter”), Fornos Decl. Ex. 3.)
Ruzumna further stated, “[w]e understand the Fifth Avenue Company’s
obligations under the Protective Order and will produce any responsive documents
and information, to the extent not already produced, as soon as we are able to do
so.” (Id.) The production to which he referred was the seizure that occurred in
connection with the criminal investigation. (Id.) In essence, counsel acknowledged

to the filing of the complaint against Alavi. The Court finds that this argument is factually
incorrect. Levin, Ennis, and Chernoff all testified credibly that there were no legal or evidentiary
impediments to bringing a forfeiture claim against Alavi in December 2008. (Tr. 134: 20-25 (Ennis);
id. 735:4-736:1 (Levin); id. 365:22-366:4 (Chernoff).) The fact that there was further investigation
that could be done and would be done is far from equivalent to needing the information obtained
pursuant to the search in order to be able to file a claim.

45

that the documents subject to the civil document production requirements in the
forfeiture complaint that predated the December 19, 2008 search were a subset of
those documents seized for the criminal investigation. In substance, he explicitly
relied upon the seizure to fulfill his civil production obligations.
As the forfeiture and private turnover actions progressed, the Court
coordinated the litigations for pretrial purposes. Following that coordination, on
June 24, 2011, the Government and certain groups of the Judgment Creditors
served a joint discovery request on Alavi and the 650 Fifth Ave. Co. (First Set of
Consol. Doc. Requests to Claimants The Alavi Foundation and 650 Fifth Ave. Co.,
GX 10.) The discovery request represented that the document requests were being
made “on behalf of [the Government] and the private plaintiffs in this consolidated
action.” (Id.)
On May 31 and June 28, 2012, Alavi produced a set of documents back to the
Government and the Judgment Creditors in response to those requests—the Bates
stamps on the documents produced simultaneously to the Government and
Judgment Creditors on June 28 indicate that they include a subset of those seized
in the December 2008 FBI search.32 (See Letter of Krista D. Adler, Esq., to counsel,
June 28, 2012, Fornos Decl. Ex. 22.) Alavi has not moved (nor could it) to suppress

As stipulated by the parties, Government Exhibits 40-48 submitted in connection with the
suppression hearing, “are true and correct copies of letters of email correspondence attached to
documents produced by Claimants in response to the Government’s document requests in this
matter.” (GX 70 ¶ 1.) These exhibits show that the following bates numbered documents were
produced: ALV_00000001-00016962 (GX 40); ALV_00016963-0003896 (GX 41); SDNY-00000010733502 (GX 42); ALV_0038197-00045567 or SDNY-0011315-0404820 (GX 43); ALV_0004566100046959 (GX 44); ALV_00046960-00062552 (GX 45); ALV_00045568-00045660 (GX 46);
ALV_00062553-00062584 (GX 47); 5AVECO 00001-02162 (GX 48).
32

46

the documents at issue on this motion, which were provided to the Judgment
Creditors.
More than a year passed between that June 2012 re-production of the
documents and Claimants’ initial assertion that the materials seized by the
Government should be suppressed.
As of the filing of the Government’s in rem forfeiture action on December 17,
2008 (if not sooner), Alavi also had common law obligations to preserve all of its
relevant business records for production. See Kronisch v. United States, 150 F.3d
112, 126 (2d Cir. 1998) (“[The] obligation to preserve evidence arises when the party
has notice that the evidence is relevant to litigation—most commonly when suit has
already been filed, providing the party responsible for the destruction with express
notice, but also on occasion in other circumstances, as for example when a party
should have known that the evidence may be relevant to future litigation.”);
Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 216 (S.D.N.Y. 2003).
The Protective Order of December 17, 2008, also required Alavi to permit the
Government to inspect the entirety books and records of 650 Fifth Ave. Co. in
connection with the forfeiture litigation. (See ECF No. 2 ¶¶ 4, 6.) Counsel for Alavi
and 650 Fifth Ave. Co. acknowledged this obligation and complied by negotiating
with the Government the return and re-production of the non-privileged documents
seized in the criminal search.
As part of the suppression hearing in this matter, the parties stipulated that
the documents referenced in GXs 40 to 48 were produced by Claimants in response
47

to the Government’s document requests in this matter. (GX 70.) These exhibits
specifically identify the documents produced by Claimants: Ex. 40 (May 31, 2012)
refers to a production consisting of approximately 16,000 pages of documents. The
cover letter states that it includes “documents located on the Foundation’s electronic
media, including on servers, computers, laptops, and discs.” (GX 40.) Ex. 41 (June
21, 2012) refers to a production of an additional almost 20,000 pages. The cover
letter states that it includes documents received from third parties, including in
response to FOIA requests, as well as non-privileged documents contained in “our
firm’s files, such as documents relating to past litigations involving the Foundation
and/or 650 Fifth Avenue.” (GX 41.) GX 42 (June 28, 2012) refers to a production of
approximately 70,000-plus pages. The cover letter states that “[t]his production
includes our production from those documents provided to us by the Government in
April 2012. We understand that many, but not all, of these documents were among
those seized from the Alavi Foundation’s offices on December 19, 2008 . . . .” (GX
42.) GX 43 (August 3, 2012) refers to a production consisting of approximately
8,000 additional pages. The cover letter accompanying this production indicates
that they are non-privileged documents that were located in their litigation files.
(GX 43.) GX 44 (May 27, 2013) refers to a production consisting of almost a
thousand pages; GX 45 (May 31, 2013) refers to a production consisting of another
approximately 18,000 pages; GX 46 (August 21, 2013) refers to a production of a
little over a thousand pages, including documents in Farsi. GX 47 (March 28, 2017)
refers to a production consisting of approximately fifty pages. The cover letter
48

states that “[t]hese documents were identified through a recent re-review of
materials in preparation for trial, including materials returned by the FBI as
potentially privileged . . . because we have been unable to confirm whether these
documents were previously produced in this action, we are producing them now.”
(GX 47.) GX 48 (January 16, 2009) refers to a production consisting of
approximately 2,000 pages. That letter further states, “most of the documents
responsive to the Protective Order’s demands are maintained by 650 Fifth Avenue’s
building manager, Jones Lang LaSalle (‘JLL’), and we understand that JLL is
providing these materials to the United States.” (GX 48.) The letter continues,
“[o]ther potentially responsive documents were seized during the FBI’s December
19, 2008 search of the Alavi Foundation’s offices. Nevertheless, we are enclosing a
disk containing certain responsive materials obtained by the Fifth Avenue Company
from JLL . . . .” (Id.)
II.

LEGAL STANDARDS RELATING TO SUPPRESSION
The Fourth Amendment protects the “right of the people to be secure in their

persons, houses, papers, and effects, against unreasonable searches and seizures.”
U.S. Const. amend. IV; Kentucky v. King, 563 U.S. 452, 459 (2011). “It cannot be
doubted that the Fourth Amendment’s commands grew in large measure out of the
colonists’ experience with the writs of assistance and their memories of the general
warrants formerly in use in England.” United States v. Chadwick, 433 U.S. 1, 7-8
(1977).

49

The search here at issue was conducted pursuant to a judicially authorized
warrant. “The judicial warrant has a significant role to play in that it provides the
detached scrutiny of a neutral magistrate, which is a more reliable safeguard
against improper searches than the hurried judgment of a law enforcement officer
‘engaged in the often competitive enterprise of ferreting out crime.’” Chadwick, 433
U.S. at 9 (quoting Johnson v. United States, 333 U.S. 10, 14 (1948).) Reasonable
reliance on a judicially authorized warrant—even if that warrant is later held
invalid—nevertheless constitutes good faith and suppression is not appropriate.
See Davis v. United States, 564 U.S. 229, 240 (“[W]e have ‘never applied’ the
exclusionary rule to suppress evidence obtained as a result of nonculpable, innocent
police conduct.” (quoting Herring v. United States, 555 U.S. 135, 144 (2009)).
“Our fundamental inquiry in considering Fourth Amendment issues is
whether or not a search or seizure is reasonable under all the circumstances.”
Chadwick, 433 U.S. at 9.
A. The Exclusionary Rule
The exclusionary rule, providing for suppression of evidence obtained as a
result of a constitutionally infirm search, is a judicial creation. Davis, 564 U.S. at
236. The rule provides for the exclusion of evidence “[w]hen the police exhibit
deliberate, reckless, or grossly negligent disregard of Fourth Amendment rights.”
Davis, 564 U.S. at 240; see also United States v. Stokes, 733 F.3d 438, 443 (2d Cir.
2013). “‘To trigger the exclusionary rule, police conduct must be sufficiently
deliberate that exclusion can meaningfully deter it, and sufficiently culpable that
50

such deterrence is worth the price paid by the justice system.’” United States v.
Ganias, 755 F.3d 125, 136 (2d Cir. 2014) (quoting Herring, 555 U.S. at 144.).
The exclusionary rule was applied by the Second Circuit in Stokes when the
facts and circumstances revealed a “deliberate decision to violate constitutional
requirements.” Stokes, 733 F.3d at 443-44. There, an AUSA, Frank Chase, was
twice asked by the ranking detective on the scene, and twice declined, to obtain a
search warrant. Chase made a deliberate tactical choice not to obtain a warrant
based on his desire to question the suspect outside of the presence of counsel; once a
warrant issued, New York law would have prevented this. Id. at 444.33
Similarly and more recently, in Ganias, the Second Circuit applied the
exclusionary rule when the Government had no basis for reviewing computer files
obtained two and a half years earlier in connection with a prior, overbroad warrant,
and apparently waited to see if the information in the files would one day prove
useful. 755 F.3d at 137-38. The Court specifically found that “the benefits of
deterrence in this case are great. With the Government’s use of forensic mirror
images becoming increasingly common, deterring its unconstitutional handling of
non-responsive data has grown in importance. The substantial deterrence value in
this case is clear when compared to Davis.” Id. at 140.

It appears that other facts were persuasive to the Court’s analysis, including that a ruse was used
to determine whether the suspect was in the room to be searched, that he was later acquitted of the
more serious charges that led to the search in the first instance (leaving only a felon in possession
charge, which depended entirely on the fruits of the warrantless search), and the fact that the
Government attempted to rely on a factual affidavit from the manager of the motel premises
searched obtained and submitted only after the evidentiary hearing on suppression had been
concluded. Stokes, 733 F.3d at 441-43.
33

51

Exclusion is not, however, a personal constitutional right, “nor is it designed
to ‘redress the injury’ occasioned by an unconstitutional search.” Davis, 564 U.S. at
248 (quoting Stone v. Powell, 428 U.S. 465, 486 (1976)). As the Supreme Court
noted in 2011, “The rule’s sole purpose, we have repeatedly held, is to deter future
Fourth Amendment violations.” Id. (citing Herring, 555 U.S. at 141; United States
v. Leon, 468 U.S. 897 (1984); Elkins v. United States, 364 U.S. 206, 217 (1960)). It
is “a ‘windfall’ remedy to deter future Fourth Amendment violations.” Davis, 564
U.S. at 248. The rule’s operation is thus limited to “situations in which this purpose
is ‘most efficaciously served.” Id. at 236 (quoting United States v. Calandra, 414
U.S. 338, 348 (1974)). “Where suppression fails to yield ‘appreciable deterrence,’
exclusion is ‘clearly unwarranted.’” Id. (quoting United States v. Janis, 428 U.S.
433, 454 (1976)) (alternation omitted).
For exclusion to be appropriate, the deterrence benefits of suppression must
outweigh the rule’s heavy costs. Davis, 564 U.S. at 240 (“Police practices trigger the
harsh sanction of exclusion only when they are deliberate enough to yield
‘meaningful’ deterrence, and culpable enough to be ‘worth the price paid by the
justice system.’” (quoting Herring, 555 U.S. at 144); see also Hudson v. Michigan,
547 U.S. 586, 591 (2006) (“The exclusionary rule generates ‘substantial social
costs.’”) (quoting Leon, 468 U.S. at 907)). The Supreme Court has “rejected
‘indiscriminate application’ of the rule” and has “held it to be applicable only ‘where
its remedial objectives are thought most efficaciously served.’” Hudson, 547 U.S. at
591 (quoting Leon, 468 U.S. at 909, and Calandra, 414 U.S. at 348).
52

An example of deliberate action sought to be deterred by suppression
occurred in Stokes. There, the Second Circuit deliberate action not to seek a search
warrant taken as a result of a conscious tactical choice. Under such circumstances,
exclusion was appropriate to deter similar conduct in the future. Id. at 444 (“We
have no doubt that the exclusion of evidence is presumptively appropriate in such a
clear case of illegal police action.”)
B. The Good-Faith Exception34
The judicially created “good-faith exception” to the exclusionary rule
recognizes the social costs of exclusion when law enforcement has acted in an
objectively reasonable manner under the totality of the circumstances. See Davis,
564 U.S. at 248. This exception, first enunciated in Leon, provides that evidence
seized by officers reasonably relying on a facially valid warrant issued by a
“detached and neutral magistrate should not be suppressed.” United States v.
Roberts, 852 F.2d 671, 675 (2d Cir. 1988). The “pivotal question is whether ‘a

Claimants cite the district court’s decision in United States v. Zemylansky, 945 F.Supp.2d 438
(S.D.N.Y. 2013), in support of their position that the good-faith exception is inapplicable here. Such
reliance is misplaced. That decision focused on the failure to attach the affidavit supporting
probable cause to the warrant itself. Here, the Second Circuit has already found constitutional
infirmity on just such a basis. In Zemylansky, the district court found the good-faith exception was
inapplicable in large part based on the fact that the officer who oversaw the execution of the search
had not read the affidavit. Id. at 466. There were no facts suggesting that he had any particular
familiarity with the investigation and therefore appears to have been left with an extremely broad
warrant and no information to assist him in understanding the nature of the investigation. In
contrast, here there is clear evidence that Clark (Nicolet) had significant information about the
nature and scope of the investigation based upon her work in CT-7. She knew that the investigation
concerned potential IEEPA violations and money laundering. Clark (Nicolet) was also a qualified
lawyer. In addition, a significant number of agents who assisted in the search were also assigned to
squads CT-7 and CT-9, both of which had been exposed to detailed information regarding the
investigation. Thus, far from the situation in Zemylansky, the agents on site here knew what they
were looking for and, importantly, why.
34

53

reasonably well-trained officer would have known that the search was illegal
despite the magistrate’s authorization.’” Id. (quoting Leon, 468 U.S. 922 n.23).
In Davis, the Supreme Court recognized that “[e]xpansive dicta” in several
decisions implied that the exclusionary rule was a “self-executing mandate” implicit
in the Fourth Amendment itself. 564 U.S. at 237. Certain cases seemed to “‘treat[]
identification of a Fourth Amendment violation as synonymous with application of
the exclusionary rule.’” Id. (quoting Arizona v. Evans, 514 U.S. 1, 13 (1995). The
Supreme Court reviewed the history and purposes of the exclusionary rule and its
subsequent evolution. Id. It described Leon as a recalibration of “the cost-benefit
analysis in exclusion cases to focus the inquiry on the ‘flagrancy of the police
misconduct’ at issue.” Davis, 564 U.S. at 238 (quoting Leon, 468 U.S. at 909). As
the Court stated in Davis, when the police exhibit deliberate, reckless, or grossly
negligent disregard for Fourth Amendment rights, the benefits of exclusion tend to
outweigh the costs. Id. at 238; see also Herring, 555 U.S. at 141. In contrast, when
law enforcement acts with an objectively reasonable good-faith belief that their
conduct is lawful, or when their conduct involves only simple, isolated negligence,
the deterrent value of suppression is diminished and exclusion can’t “pay its way.”
Davis, 564 U.S. at 238; Leon, 468 U.S. at 909, 919, 908 n.6.
Thus, “objectively reasonable reliance” on a later-invalidated warrant falls
within the good-faith exception. Davis, 564 U.S. at 239; Leon, 468 U.S. at 922.
“The error in such a case rests with the issuing magistrate, not the police officer,
and ‘punish[ing] the errors of judges” is not the office of the exclusionary rule.
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Davis, 564 U.S. at 239 (quoting Massachusetts v. Sheppard, 468 U.S. 981, 990
(1984)). In Davis, the Supreme Court noted a number of varied circumstances that
had been held to support application of the good-faith exception, including general
instances of “isolated, non-recurring police negligence.” Id. at 239 (internal
quotation marks omitted). Such isolated, non-recurring negligence lacked the
culpability required to “justify the harsh sanction of exclusion.” Id. “Police
practices trigger the harsh sanction of exclusion only when they are deliberate
enough to yield meaningful deterrence, and culpable enough to be worth the price
paid by the justice system.” Id. (citing Herring, 555 U.S. at 144) (internal quotation
marks omitted).35
Reasonable, good-faith reliance on a judicially authorized warrant has been
upheld even when large-scale removal of materials from a premises has occurred.
United States v. Tamura, 694 F.2d 591, 597 (2d Cir. 1982). In Tamura, the agents
seized all records for the relevant time period and took large quantities of
documents that were not described in the search warrant. Id. at 595. The
Government argued that the seizure was reasonable as the records were
intermingled. The defendant asserted that the FBI agents should have remained
on the premises until they had extracted only the relevant materials. The Second
Circuit found that while the search could have been conducted differently,
suppression was not warranted. “Generally, the exclusionary rule does not require

35Judge

Gleeson, now retired and counsel on this case, recognized the principle of good faith reliance
in United States v. Simmons, No. 02-cr-314, 2003 WL 145261 (E.D.N.Y. Jan. 9, 2003). As he stated
there, officers were justified in relying on a judicially authorized warrant—irrespective of whether
the judge had been correct in authorizing it in the first instance. Id. at *10.

55

the suppression of evidence within the scope of a warrant simply because other
items outside of the scope of the warrant were unlawfully taken as well.” Id. at 596
(citing United States v. Daniels, 549 F.2d 665, 668 (9th Cir. 1977).) The Court
further found that because the Government’s wholesale seizure was motivated by
practicality rather than by a desire to engage in indiscriminate fishing, the officers
had not “so abused the warrant’s authority that it was transformed into a general
one, requiring all fruits to be suppressed.” Id.
Similarly, in United States v. Hargus, 128 F.3d 1358, 1362-63 (10th Cir.
1997), the court held that the seizure of items outside the scope of the warrant, such
as office supplies, an answering machine, unopened mail, birthday cards, a tape
measure, and life insurance policies, did not so grossly exceed the warrant as to
require suppression. There, the court found that the officers’ conduct was
motivated by the impracticality of on-site sorting and the time constraints of
executing a daytime search warrant. Id. The Second Circuit cited the Tenth
Circuit’s Hargus decision approvingly in affirming a district court’s denial of
suppression in United States v. Liu, 239 F.3d 138, 141-42 (2d Cir. 2000). There, an
IRS agent executing a search warrant spent thirty minutes spot-checking files in a
file cabinet and determined that the level of responsiveness was substantial enough
to warrant taking the entire contents of the cabinet without further on-site review.
Id. at 141. The Second Circuit found that “[t]hese actions bear none of the
hallmarks of a general search: They suggest a fairly systematic inventory, not
‘indiscriminate rummaging’ and a search for items enumerated in the warrant[.]”
56

Id. The court cited Hargus and stated that “even assuming arguendo that the INS
agents exceeded the bounds of the warrant when they seized individual agency files
without first searching them, we hold that appellants have not shown that the
agents’ search resembled a general search.” Id. at 142; see also Andresen. v.
Maryland, 427 U.S. 463, 482 n.11 (1976) (“In searches for papers, it is certain that
some innocuous documents will be examined, at least cursorily, in order to
determine whether they are, in fact, among the papers authorized to be seized.
Similar dangers, of course, are present in executing a warrant for the ‘seizure’ of
telephone conversations.”).
C. The Inevitable-Discovery Doctrine
“Under the ‘inevitable discovery’ doctrine, evidence obtained during the
course of an unreasonable search and seizure should not be excluded if the
government can prove that the evidence would have been obtained inevitably
without the constitutional violation.” In re 650 Fifth Avenue, 830 F.3d at 102
(citing United States v. Heath, 455 F.3d 52, 55 (2d Cir. 2006)) (emphasis added); see
also Stokes, 733 F.3d at 444 (The inevitable-discovery doctrine provides that the
“fruits of an illegal search and seizure are nevertheless admissible at trial ‘if the
government can prove that the evidence would have been obtained inevitably
without the constitutional violation.’” (quoting Heath, 455 F.3d at 55)). This
doctrine may be applicable in situations in which a search has been deemed
unreasonable for one of a number of potential reasons. See, e.g., Heath, 455 F.3d at
55. Put another way, that a court refers to this doctrine at all implies a
57

constitutionally deficient search. Id. (“In essence, the inevitable discovery
doctrine’s application turns on a central question: Would the disputed evidence
inevitably have been found through legal means ‘but for’ the constitutional
violation? If the answer is ‘yes’, the evidence seized will not be excluded.”)
To determine whether evidence would inevitably have been discovered, the
district court must examine the state of affairs “‘as they existed at the instant
before the unlawful search” and determine what would have happened had the
unlawful search never occurred.’” In re 650 Fifth Ave., 830 F.3d at 102 (quoting
United States v. Eng, 971 F.2d 854, 861 (2d Cir. 1992) (“Eng I”)) (emphasis in
original). In this regard, the court must first evaluate “‘the progress of the
investigation at the time of the Government misconduct’ to determine whether ‘an
active and ongoing investigation . . . was in progress at the time of [the] unlawful
search.’” In re 650 Fifth Ave., 830 F.3d at 103 (quoting Eng I, 971 F.2d at 861-62,
and citing Eng II, 997 F.2d at 989-90). Next, for each particular piece of evidence,
the court must “‘specifically analyze and explain how, if at all, discovery of that
piece of evidence would have been more likely than not inevitable absent the
[unlawful] search.’” Id. at 103 (quoting Eng I, 971 F.2d at 862, and citing Eng II,
997 F. 2d at 989-90) (alteration in original).
“[P]roof of inevitable discovery ‘involves no speculative elements but focuses
on demonstrated historical facts capable of ready verification or impeachment and
does not require a departure from the usual burden of proof at suppression
hearings.’” Eng I, 971 F.2d at 859 (quoting Nix v. Williams, 467 U.S. 431, 444 n.5
58

(1984)) (emphasis in original); accord, Eng II, 997 F.2d at 990; see also Stokes, 733
F.3d at 444 (“The focus on demonstrated historical facts keeps speculation to a
minimum . . . .”)
The Government bears the burden of proving inevitable discovery by a
preponderance of the evidence. In re 650 Fifth Ave., 830 F.3d at 102; Stokes, 733
F.3d at 444. The Government must “’prove that each event leading to the discovery
of the evidence would have occurred with a sufficiently high degree of confidence for
the district judge to conclude, by a preponderance of the evidence, that the evidence
would inevitably have been discovered.” In re 650 Fifth Ave., 830 F.3d at 102
(citing United States v. Vilar, 729 F.3d 62, 84 (2d Cir. 2013)). In Heath, and as
reaffirmed in 650 Fifth Ave., the Second Circuit defined the Government’s
obligation in this regard as one of “certitude” that the evidence would have been
discovered. Heath, 455 F.3d at 58 n.6; In re 650 Fifth Ave., 830 F.3d at 102. When
a contingency may not have been resolved in the government’s favor, a court should
not find discovery would have been “inevitable.” Stokes, 733 F.3d at 444; see also
Roberts, 852 F.2d at 676. To support the inevitability of discovery, a court must
find not only that a contingency “could” have happened, but that it “would” have
happened. Stokes, 733 F.3d at 445. In Stokes, the court was persuaded that
discovery was not inevitable when several contingencies depended on the actions of
third parties who would have had several potential courses of conduct (for instance,
the motel staff may or may not have found the bag of guns at issue; if the staff
found the bag, they may or may not have reported it to the police; the defendant’s
59

girlfriend may or may not have carried the bag out of the motel; Stokes may or may
not have checked out when expected). Id. at 447. The Court concluded “that the
sheer number of contingencies that may not have been resolved in the government’s
favor ‘undermines the conclusion that the officers would have inevitably discovered
the [evidence].” Id. at 448 (quoting United States v. Cabassa, 62 F.3d 470, 474 (2d
Cir. 1995)).
The service of a subpoena seeking the same evidence as that at issue does not
require a finding of inevitable discovery. Roberts, 852 F.2d at 676. In Roberts, the
Second Circuit stated that “[t]he mere fact that the government serves a subpoena,
however, does not mean that it will obtain the documents that it requests. A
subpoena can be invalid for any number of reasons, as when it is unduly
burdensome . . . .” Id. “Moreover, we can deplore but not ignore the possibility that
the recipient of a subpoena may falsely claim to have lost or destroyed the
documents called for, or may even deliberately conceal or destroy them after service
of the subpoena.” Id. In Eng I, the Second Circuit clarified that Roberts did not
stand for the proposition that the subpoena power could never be relied upon by the
government to meet the inevitable discovery burden of proof. 971 F.2d at 860. “The
subpoena power conferred upon the government . . . serves important purposes as
an investigative tool and as a method of obtaining evidence.” Id. It continued, a
“per se prohibition” that subpoenas could never be relied upon “would conflict with
the Supreme Court’s requirement that the exclusionary rule, and the inevitable
discovery exception, should not be employed so as to place the government in a
60

worse position that it would have been in had no unlawful search occurred.” Id.
(citing Nix, 467 U.S. at 443-44). The Court analyzed its statements regarding
reliance on a subpoena in Roberts as based on the fact that the subpoena had been
outstanding for several months and did not appear to have prospects of producing
results. Id. at 860. “The circumstances revealed in Roberts which made it unlikely
that the subpoena would produce evidence, must be contrasted with a situation
where the government can demonstrate substantial and convincing basis for
believing that the requisite information would have been obtained by subpoena.
Where the government is able to make such a demonstration, there is no reason
why the government may not rely upon the subpoena power as one way it might
meet the burden of proving inevitable discovery by a preponderance of the
evidence.” Id.
The Second Circuit’s rulings in Eng I and Eng II are particularly instructive
regarding the principles governing inevitable discovery generally. In Eng I, the
Second Circuit stated the possibility that the government’s investigation of the
matter in issue “was not sufficiently active or developed prior to the search of Eng’s
safe to support the government’s broad claims of inevitable discovery.” 971 F.2d at
861. It noted that “[o]nly a few months passed from the beginning of [the
investigation] until the search of Eng’s safe. Many important sources of evidence
were not sought out until after the search of Eng’s safe . . . . The search of the safe
provided a great deal of specific financial information about Eng, and only
thereafter was the indictment amended . . . .” Id. The Second Circuit remanded the
61

case for more particularized findings by the district court as to the items of
challenged evidence. Id. at 862.
Following remand and the development of a more substantial evidentiary
record by the district court, in Eng II the Second Circuit found that the disputed
evidence would have inevitably been discovered during an ongoing tax-evasion
investigation. 997 F. 2d at 993. The Second Circuit pointed to the district court’s
factual finding that, at the time of the unlawful search, the government was
involved in an ongoing investigation of Eng’s narcotics violations, which
“necessarily and customarily included an investigation of his finances in relation to
the proceeds of the narcotics trade. Such an inquiry would typically, and did in fact,
lead to an investigation of Eng’s tax returns.” Id. at 990. The Court noted that at
an evidentiary suppression hearing, the district court received evidence regarding
the status of the investigation and that it noted the “time span between the
initiation of the investigation and the illegal search and the degree of investigative
activity during that period (i.e. there were no subpoenas lying dormant for months
prior to the search as in United States v. Roberts).” Id. at 991 (internal citations
omitted). Thus, the district court properly concluded that “the investigation was
sufficiently active and advanced stage to compel the finding that alternate means of
obtaining evidence were in existence and, at least, to some degree imminent, if yet
unrealized and that the evidence produced by the investigation was simply the
normal output of that investigation.” Id. at 991 (internal quotation marks omitted).

62

In affirming the district court’s decision, the Second Circuit stated that the
facts as found by that court indicate that there was an active and ongoing
investigation that would have necessarily involved the records at issue. Id. at 991.
“Accordingly, the government was motivated to obtain additional evidence of Eng’s
narcotics activities and to see forfeiture of the proceeds derived from the
distribution of heroin.” Id. The Second Circuit found that because “the tax evasion
investigation sufficiently was developed prior to the search of Eng’s safe to support
the government’s inevitable discovery claim, we proceed to our second inquiry—
whether the discovery of each piece of challenged evidence would have been more
likely than not inevitable absent the search of Eng’s safe.” Id. at 992 (internal
quotation marks omitted).
The Second Circuit similarly upheld a finding of inevitable discovery on the
basis that a subpoena would have resulted in disclosure of the challenged evidence
in United States v. Vilar, 729 F.3d 62, 84 (2d Cir. 2013). There, the Court referred
to the district court’s factual findings that (1) the subpoena was not issued based on
information developed as a result of the search, (2) there was an active, ongoing
investigation that would have led to a substantial search of the offices in any event,
(3) the defendants’ attorney would have raised the alternative of a grand jury
subpoena, (4) the government would have issued the subpoena, and (5) the
defendants would have produced the requested documents in response to the
subpoena. Id. The Second Circuit found particularly persuasive the fact that
production of the records at issue in response to a subpoena was precisely what in
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fact happened—albeit after the challenged search had already occurred. Id. The
Court noted, “[t]his case presents the unusual scenario where the actual events
played out exactly as they would have ‘but for’ the overbreadth of the warrant,
because the government actually obtained the evidence through alternative means
that did not depend on the invalidity of the warrant.” Id.
a. Particularized Findings for Challenged Evidence
Part of the Government’s burden in demonstrating inevitable discovery is not
only that the general circumstances are supportive of such a finding, but that the
specific items of challenged evidence would have been inevitably discovered. See
Eng II, 997 F.2d at 992-98 (reviewing particularized findings for categories of
information such as Eng’s personal bank accounts; records of those accounts; closing
documents; payments for various types of bills discussed as a group; information
regarding various properties; evidence disclosing the fact of a business; and general
records relating to that business).
In Eng II, the Second Circuit affirmed the district court’s factual findings
that the specific items of challenged evidence would have inevitably been
discovered. It relied on the fact that information developed prior to the search (that
Eng had bank accounts at certain financial institutions) logically connected to
information obtained during the search (documents with the relevant account
numbers). The status of the investigation led to a conclusion that, one way or the
other, the Government would inevitably have obtained such information even in the
absence of the search. Id. at 991-92. In this regard, the fact that the subpoena
64

power was available supported the Government’s position. Id. The Court reviewed
the district court’s findings with regard to other challenged evidence and similarly
found that information already developed during the investigation would have
inevitably led to the discovery of such evidence.
D. The Second Circuit’s Instructions to This Court
In its opinion dated July 20, 2016, the Second Circuit found that the warrant
underlying the December 18, 2008 search was constitutionally defective. In re 650
Fifth Ave., 830 F.3d at 99-100. It further found that this Court’s factual findings of
only a few paragraphs supporting inevitable discovery were insufficient. Id. at 103.
In particular, it determined that this Court had not made sufficient findings as to
the state of the investigation as they existed the instant before the unlawful search,
and had also failed to make the necessary particularized findings as to what would
have happened had the unlawful search never occurred. Id. (citing Eng I, 971 F.2d
at 861). The Court noted that the Court’s considerations in this regard should be
informed by (1) the initial civil forfeiture action, filed on December 17, 2008, which
sought forfeiture of only Assa’s assets; (2) the district court’s Protective Order,
issued in connection with that action and that required 650 Fifth Ave. Co. to make
available for inspection to the Government all of its books and records, and also
prohibited any person with knowledge of the Protective Order from destroying
documents relating to the complaint’s allegations; (3) the grand jury subpoena
served on Alavi, and seeking all documents relating or referring to Assa, Bank Melli
Iran or 650 Fifth Ave. Co. for the period from 1989 to the date of production; and (4)
65

Jahedi’s observed destruction of documents responsive to that subpoena the
following day. Id. at 103-04.
The Second Circuit also instructed the district court to consider whether (or
not) the Government’s investigation was sufficiently advanced prior to December
19, 2008, to make both Claimants’ addition to the forfeiture action without the
unlawfully seized evidence, inevitable.
Finally, the Second Circuit noted that the Government had argued, “with
some force,” that “whether or not the inevitable discovery exception applies, no
suppression of evidence is warranted in this case because the executing agents
relied in good faith on the December 19, 2008 search warrant.” Id. at 106 (citing
Leon, 468 U.S. at 897.) As the district court had not considered this argument in its
prior decision, it was instructed to do so on remand (if the Government sought to
pursue that argument). Id.
III.

ANALYSIS
The Second Circuit has already determined that the warrant at issue in this

matter was constitutionally defective. In re 650 Fifth Ave., 830 F.3d at 99-100. The
question for this Court is whether by virtue of the good-faith exception to the
exclusionary rule, inevitable discovery, the benefits (if any) to be obtained or lost as
a result of suppression, or any other Fourth Amendment principles set forth in
binding case law, the evidence obtained as a result of the December 19, 2008 search
should be suppressed. Based on the now-extensive factual record developed at the
multi-day evidentiary hearing on this motion, the answer is certainly “no.”
66

A. The Good Faith Exception
Based on the facts developed at the evidentiary hearing, this Court is
confident, and has found as a factual matter, that the agents involved in the search
of the premises at 500 Fifth Avenue, New York, N.Y., on December 19, 2008, acted
in an objectively reasonable manner under the totality of the circumstances. As
part of this, they acted in good-faith reliance on a judicially authorized warrant.
A number of facts the Court has found as set forth above are supportive of
this conclusion.
First, of course, the warrant was drafted by the U.S. Attorney’s Office
according to established procedures. Nevertheless, the warrant was deficient.
While the warrant lacked particularity as to the statutes, and the affidavit which
had such information was not specifically incorporated by reference, nothing about
the factual circumstances pursuant to which the warrant was drafted is suggestive
of any intentional misconduct or deliberate action to violate the law in that regard.
Rather, the circumstances indicate that failure to include particularity as to the
crimes was plainly an oversight. For instance, the warrant that had previously
been used to search the premises of the residence of the president of Bank Melli
Iran did contain the requisite specificity.
Second, while the assigned AUSA had begun to work on the warrant by midday on December 18, 2008, and had materially completed his work on the warrant
and the supporting affidavit before he or Ennis learned of Jahedi’s attempted
destruction of documents, the Court finds that this event nonetheless played some
67

role in why the deficiencies in the warrant were not caught. In this regard, the
Court notes that following the attempted destruction of documents, there was new
urgency to the execution of the warrant early on December 19, 2008, and attention
was further distracted by efforts expended by the AUSAs and Ennis to draft and
present to the district court a criminal complaint against Jahedi, seeking his arrest.
Based on this evidence, the Court finds that it is more likely than not that as a
result of these events, the AUSA who had previously demonstrated the legal
expertise to present a constitutionally satisfactory warrant did not properly review
and edit the warrant. Certainly these other events made the matter more urgent
and required additional effort on an entirely unanticipated document (the criminal
complaint). In sum, these circumstances support that this was oversight and not
deliberate action.
Third, the preparation for and execution of the search itself demonstrate that
the agents acted in an objectively reasonable manner. The warrant, drafted by the
AUSAs working on the investigation, was presented to Magistrate Judge Katz.
Magistrate Judge Katz approved the warrant, and the agents relied upon his
approval. The Ennis affidavit was attached to the warrant approved by Magistrate
Judge Katz. As discussed above, that affidavit described in detail the basis for
probable cause as to Alavi. But in addition, an exhibit to his affidavit was the thenfiled in rem forfeiture Complaint as to Assa’s interest in the 650 Fifth Avenue
Partnership and the Building. Had those supporting materials been specifically
incorporated by reference, the lack of particularity as to crimes under investigation
68

would no longer exist. In any event, the Judge duly signed the warrant. Based,
then, upon a judicially authorized warrant, the agents proceeded to execute the
search.
Fourth, the above facts make clear that the procedures used to execute the
warrant were entirely typical and objectively reasonable. Ennis testified that the
typical procedures to gather a team to conduct the search and prepare for the search
were utilized here—albeit in an expedited manner. By the time that he was
gathering the search team together, he was aware that Jahedi had attempted to
destroy documents and there was increased urgency. Nonetheless, typical protocols
were followed. The fact that typical protocols were followed in powerful evidence
supporting good faith and the objective reasonableness of the search. There is no
credible evidence that this search was treated in any manner that was out of the
ordinary or akin to an exploratory search.
Initially, Ennis, who could not himself be present at the search, consulted
with his supervisor, Papadacos. Papadacos had knowledge of the investigation.
Ennis then made a series of telephone calls to gather together agents who could
conduct the search. The assigned lead was Special Agent Clark (Nicolet). Clark
(Nicolet) also had personal familiarity with the investigation. She had, in fact,
participated in interviews of witnesses for the investigation shortly before the
warrant was executed. A substantial number of the other agents were on either
CT-7 or CT-9 and also had pre-existing familiarity with the investigation. One of
the agents, Special Agent Scott, had drafted the FBI’s 302 relating to the December
69

17, 2008 interview of Jahedi. The Court’s conclusion that the agents conducted the
search in an objectively reasonable manner is also based on the fact that many
members of the search team had prior familiarity with the investigation. As
described above, a substantial number of the search team therefore already—and
separately and apart from the warrant—understood the nature and scope of the
investigation. The agents’ familiarity with the investigation was confirmed by the
testimony of Ennis and Clark (Nicolet) and by documentary evidence.
In addition, Clark (Nicolet) who was the assigned lead for the search, had no
reason to proceed in anything other than a professional and appropriate manner.
She was an impressive and highly credible witness who has been given increasing
and important responsibilities over the years. No evidence in the record supports
any reason she would have had to cut corners. Clark (Nicolet) testified that had
been trained as an FBI agent in search procedures; this was similar to the training
that Ennis testified credibly that all agents received. Clark (Nicolet) was also a
trained lawyer from a prestigious law school and had practiced as a litigator at a
national firm. In short, she had the experience and training to perform a search in
a reasonable manner. The evidence does not support any material deviation from
typical procedures.
But in addition, Clark (Nicolet) testified credibly that she had personal
familiarity with the investigation itself. She had, in fact, participated in interviews
just prior to the execution of the search warrant. She was familiar with the crimes
that were being investigated and the type of evidence supportive of those charges.
70

Clark (Nicolet) also testified that she understood—before the team even began the
search—that they expected the search to result in a substantial seizure of
documents. The evidentiary records reflects that this expectation was based upon
the nature of the records relevant to the money laundering and IEEPA crimes
under investigation. In addition, interviews at the premises to be searched on
December 17 had revealed an office full of hard-copy documents and a storage room
with documents going back thirty years that were likely probative of the alleged
crimes. Thus, the fact that a large number of records were seized is not probative of
an unreasonable seizure; it is, here, indicative of a significant investigation.
Clark (Nicolet) prepared appropriately for the search, gathering supplies and
the team that would conduct the search. The team reviewed the warrant and made
sure that they all understood what they would be searching for. Far from being
prepared to conduct an exploratory, general search, the team was prepared to
specifically execute the warrant.
The procedures that were utilized during the search itself further confirm the
objective reasonableness of the agents’ behavior. To start, the agents duly signed in
and noted their presence on the sign-in sheet. In addition, a record was kept of
which agents were involved in searching which room, and an inventory of boxes for
each room was maintained. “Before” photographs were taken of each area in the
premises that subject to search. Members of ERT and the CART teams were
present to insure that all additional procedures relevant to gathering evidence
generally and computers specifically were followed.
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As the search proceeded, far from abandoning the agents to conduct a random
gathering of all and sundry documents, Clark (Nicolet) ensured that she canvassed
the premises, answering questions as needed regarding the scope of the search. The
fact that she was asked questions regarding responsiveness corroborates that
selections were being made. Clark (Nicolet) testified credibly that she herself
ensured that the contents of boxes matched their external labels.
The photographs taken after the search confirm that documents were left
behind. Contrary to Claimants’ assert, not “everything” was taken. Rather, the
Court finds that the Government, assisted by Clark (Nicolet), made selections of
documents.36
Clark (Nicolet) testified credibly that under the circumstances, and given the
volume of documents at issue and the need for special expertise with regard to the
computers, the documents and computers were boxed up for further review at the
FBI’s offices. This was neither unusual nor in and of itself objectively unreasonable.
There is no doubt that the volume of documents expected to be gathered was large;
and the documents in fact gathered met those expectations. Unless the FBI was
going to prevent the Alavi Foundation from conducting any business the following
week, they needed to conduct their review elsewhere. This review process also
understandably took some time given the volume. But that fact was also not shown

Claimants’ argument that the search was in fact an exploratory search is based largely on the
number of boxes eventually returned. The fact that boxes – even many – were returned does not
mean that they were not appropriately gathered by agents conducting the search in good faith and in
an objectively reasonable manner. The agents were relying on a judicially authorized warrant – that
they ended up selecting documents based on that warrant that were not later necessary to the
investigation does not indicate an unreasonable search.
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to be unusual. In short, the evidentiary record supported the review process as
consistent with normal practice. In short, the agents were not acting in some sort of
deliberate, reckless, or grossly negligent manner.
Claimants point to the breadth of the categories of records set forth in
Attachment A as supporting some sort of incurable unreasonableness. Based on the
facts as found by the Court here, this argument is misguided. It is certainly true
that the categories of records sought were broad. But Ennis and Levin both
testified credibly as to the purpose of both particular types of documents, and the
specific need for historical documents. (The Court has specifically discussed that
relevance above). Contrary to Claimants’ assertion, on the particular facts here, to
prove the crimes under investigation relating to money laundering or IEEPA
violations of the type required information concerning historical relationships.
Among the issues in the criminal investigation and now in the civil forfeiture case is
whether the Alavi Foundation, at some point in its history, took affirmative steps to
try and hide its relationship with Iran, whether Iran directed activities including
charitable funding decisions, personnel decisions, and general operations. Proving
that relationship could require access to personnel documents (to show, as Ennis
testified he had heard from a confidential source, that Iran in fact controlled such
decisions); Ennis testified that information developed during the course of the
investigation indicated that Iran also participated in funding decisions by the
charitable foundation—rendering those documents potentially direct evidence of the
matters under investigation. In addition, the money laundering and provision of
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service issues required detailed proof as to the nature of the rent receipts and
money flows. This included tenant-related documents as well as extensive bank
records. In short, and as more fully described above, there is no doubt that the
documents that were probative of the crimes under investigation were potentially
and in fact large in volume. Accordingly, given the particular circumstances here,
the mere recitation of “200 boxes were taken” does not demonstrate an
unreasonable search. The facts demonstrate that, to the contrary, the search
categories were reasonable.
The facts and circumstances of this search demonstrate that it was conducted
in good faith, in reliance upon a duly authorized warrant, and in an objectively
reasonable manner.
B. Application of the Exclusionary Rule Serves No Significant Salutary
Purpose Here
Even if this Court concluded that the search had not been conducted in an
objectively reasonable manner, it would nonetheless also conclude that this is not
an instance in which the exclusionary rule should apply. See Davis, 564 U.S. at
240. The facts do not support the type of deliberate and culpable conduct that
suggests exclusion would be appropriate. Here, as described now at length above,
the U.S. Attorney’s Office and FBI used routine procedures in connection with a
very large investigation. The facts and circumstances demonstrate that normal
procedures were used to obtain a judicially authorized warrant—though there was a
deficiency on its face. That deficiency seems, by all accounts, to have been an
oversight. There was no advantage to be gained from not including the particular
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statutes under investigation on the face of the warrant. That was especially so in
light of the fact that a civil forfeiture action had only two days before been filed
against Assa and its interests in the 650 Fifth Ave. Co., making the theories public.
Thus, there was and could not have been anything strategic about failing to disclose
the statutes at issue.
The search itself was also conducted in an objectively reasonable manner (as
discussed above). Any deficiencies were the result of oversight. There is simply no
evidence of conscious, reckless, or grossly negligent decision making.
Claimants’ main issue has always been focused on the volume taken and then
returned as non-responsive. Both of these facts are true—but the facts discussed
above explain how the categories were relevant, how the search proceeded, and that
in fact selections were made. In addition, the return of documents demonstrates
that the Government was not seeking to declare documents probative of the
investigation just for the sake of it. Indeed, the return of documents on a rolling
basis cuts against a finding that the Government engaged in deliberate or grossly
negligent conduct.
As set out at some length above, there is now a substantial body of case law
that instructs courts to consider whether exclusion is warranted even in the face of
a constitutionally infirm warrant and objectively unreasonable conduct. See, e.g.,
Davis, 564 U.S. at 241; Leon, 468 U.S. at 922. Here it plainly is not. The search
here was in the context of an investigation relating to a relatively unusual set of
circumstances. Given these circumstances, exclusion here would serve no
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significant deterrent purpose. This Court is hard pressed to find any significant
remedial purpose that would be served by exclusion here; against this, the cost of
exclusion would be high. This is especially so since the same documents at issue on
this motion have been provided to Judgment Creditors through the normal
discovery process in the Kirschenbaum and related actions. Thus, exclusion here
would deprive the jury of documents relevant to its decision, but not remove the
very same documents from other civil actions pending before the Court.
C. The Specific Evidence at Issue Would Have Been Inevitably Discovered
The facts as the Court has found them above also support inevitable
disclosure of specific items of evidence. The legal standard governing inevitable
discovery requires first, that this Court analyze what the status of the investigation
was prior to the unlawful search.
Here, the facts demonstrate that the investigation was very active, with a
number of interviews occurring prior to the search, extensive use of a cooperating
human source who provided detailed information as well as documents, and the
execution of a search warrant at the residence of the president of Bank Melli Iran.
These facts are confirmed by the 302’s introduced into evidence at the evidentiary
hearing on this motion, by a copy of the search warrant for the Bank Melli Iran
residence, and the credible testimony of Ennis and Levin.
The facts developed in detail at the evidentiary hearing allow this Court to
easily conclude that prior to the search, a majority of the facts that were later
included in the complaint against Alavi’s interest (the November 2009 “Amended
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Complaint”), had already been developed. Tactical and strategic decisions were
made (and the Court credits the testimony in this regard) not to include them in the
complaint against Assa’s interest due to (1) concerns about the safety of a
cooperating witness, (2) concerns about chilling a human source, (3) concerns about
suing a New York charity, and (4) concerns about proceeding in coordination with
counsel for the victims of terrorism holding judgments against Iran, and their
families or estates. The investigation was at an advanced stage before the search
occurred.
Based on this status, it was inevitable that the Forfeiture Unit of the U.S.
Attorney’s Office would seek to forfeit Alavi’s interest. As Levin credibly testified, it
was highly unusual in the first instance to proceed as they had—against only a 40%
interest at first. That was done for the reasons already stated as well as policies of
the U.S. Attorney’s Office regarding following actions against funds with forfeiture
actions. But in addition, the Court has found that the facts necessary to support
the claim against Alavi were already present.
Joining Alavi’s interest in the litigation would have allowed the U.S.
Attorney’s Office to have used civil discovery devices. This Court has a factually
based, high level of confidence that this would have occurred.
But in addition, other processes were already in motion. As in Vilar, a
subpoena for the same documents as those at issue had already been served. That
was the grand jury subpoena served on Jahedi in December 17, 2008. This
subpoena was being actively monitored and pursued, as was evident from the
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surveillance team placed on Jahedi following service of the subpoena, and the quick,
reactive action when he attempted to destroy relevant and responsive documents
that same day. These acts make it clear that this subpoena was in fact being
vigorously pursued.
In addition, this Court can also say with near certainty that the documents in
existence at the time of Jahedi’s arrest on December 19, 2008, would have remained
in existence. This determination is based on the fact that the FBI was closely
monitoring behavior that might lead to destruction, and arrested Jahedi for it. He
immediately obtained counsel. The responsible counsel retained would not have
condoned or, this Court believes, allowed further destruction. At this point, every
move regarding documents was being monitored by multiple individuals.
But further, there was a Protective Order issued in the Assa forfeiture case
that also required compliance with preservation obligations.
The Court’s confidence that the documents would inevitably have been
disclosed is also confirmed, as in Vilar, by the fact that that is precisely what
happened. GX 40-48 reflect Claimants’ productions in this case. Notably, GX 42
reflects the production of the very documents at issue. Here, as in Vilar, the
inevitable disclosure occurred.
Moreover, there has been extensive sharing of documents and coordination
between the Government in this case and the cases brought by the Judgment
Creditors (in the Kirschenbaum and related actions). That coordination has
included deposition coordination and trial coordination. The documents at issue
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were disclosed without issue by Claimants here to the Judgment Creditors. There
is simply no significant possibility that such documents would not have made their
way to the Government.
Claimants allege that the Government has, in all events, failed to show with
specificity the items that would have been inevitably disclosed. That is incorrect.
In fact, such specificity is done relatively easily in this case as they are included in
the series of productions contained particularly at GX 42, and more generally at
GXs 40-48. The Government need not provide an index of documents that fall
within the specific Bates-range indicated in order to have met its obligation. It is
enough that the documents can be readily identified, as they can be here.
In sum, the evidentiary record in this case allows the Court to conclude with
a very high degree of confidence that the challenged evidence would inevitably have
been disclosed in the absence of the search.

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IV.

CONCLUSION
For the reasons set forth above, and based on the factual findings made by

this Court following an evidentiary hearing, Claimants’ motion for suppression is
DENIED.
SO ORDERED.
Dated:

New York, New York
May 15, 2017

______________________________________
KATHERINE B. FORREST
United States District Judge

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