SDNY Judge Slams Prosecutors' Conduct in Iran Sanctions Case

A Manhattan federal judge on Wednesday rebuked federal prosecutors for withholding exculpatory evidence before the dismissal of the indictment against an Iranian entrepreneur found guilty of violating sanctions.

US District Judge Alison Nathan asserted federal prosecutors at the Manhattan US Attorney's Office repeatedly violated their obligations to reveal evidence in a timely manner, eroding public trust in the criminal justice system. The late evidence disclosures eventually prompted the court to vacate entrepreneur Ali Sadr Hashemi Nejad's guilty verdict issued in March.

The evidence in the middle of the judge's remarks was an exhibit called GX 411, a study by Commerzbank towards the US Treasury regarding a $30 million transaction thought to have included Iranian money. The truth that the Treasury did not take action in reaction towards the report gave it potential value as exculpatory evidence, but federal prosecutors claimed to not have been conscious that the report was in their possession, and seemed to deliberately bury it among unrelated documents sent to the defence.

Nathan ordered that prosecutors on the case read her decision and answer a summary of questions by 16 October on what they knew about GX 411 and when they knew it.

The decision is damaging towards the trustworthiness of the Manhattan US Attorney's Office, that has been known in the past for the high standards of their lawyers and effective prosecution of high-profile cases involving fraud and corruption.

Nathan commended the Office's “admission of error and effort to complete justice in this instance by agreeing to dismiss the indictment”, adding: “Better late than never.”