It alleges that the Iranian state-owned Bank Melli, through an offshore shell company, owns 40 per cent of the Manhattan property, while the Alavi Foundation controls the remaining 60 per cent.

Under Canada’s 2010 Special Economic Measures Regulations on Iran, Bank Melli is a designated entity with which Canadians cannot do business. The United States and the European Union have also blacklisted the bank, alleging it funds terrorism and Iran’s nuclear missile program.

“For two decades, the Alavi Foundation’s affairs have been directed by various Iranian officials, including Iranian ambassadors to the United Nations, in violation of a series of American laws,” Preet Bharara, the United States attorney for the southern district of New York, said in a statement announcing the November 2009 complaint.

The following month, Farshid Jahedi, former president of the Alavi Foundation, pleaded guilty to obstruction of justice after admitting he tried to destroy and discard documents he knew would be subpoenaed as part of an investigation into the Alavi Foundation’s alleged relationship with Bank Melli.