White House Secretly Dismissed $10 Million Jury Judgment to Make Iran Deal Work

On Wednesday, Reuters reported that part of the deal to secure the release of American prisoners in Iran involved the Administration throwing out a $10 million claim from a Maryland jury against an Iranian-American defendant, even though the defendant himself did not want to be part of the deal.

The report indicates the White House struggled to negotiate with Iran on the matter:

Nader Modanlo was facing five more years in federal prison when he got an extraordinary offer: U.S. President Barack Obama was ready to commute his sentence as part of this month’s historic and then still-secret prisoner swap with Iran. He said no.

To sweeten the deal, the U.S. administration then dropped a claim against the Iran-born aerospace engineer for $10 million that a Maryland jury found he had taken as an illegal payment from Iran, according to interviews with Modanlo, lawyers involved and U.S. officials with knowledge of the matter.

The surrender of the U.S. claim, which has not previously been reported, could add to scrutiny of how the Obama administration clinched a prisoner deal that has drawn criticism from Republican presidential candidates and lawmakers.

A Washington-based spokesman for the Justice Department declined to comment on discussions over the $10 million, which the jury found that Modanlo was paid to help Iran launch its first satellite in 2005. Modanlo says the money was a loan from a Swiss company for a telecoms deal.

Modanlo wanted no part of this arrangement, even with the $10 million claim. He maintains his innocence, describing the case against him as fallout from the 2001 bankruptcy of his aerospace company, and a vindictive lawsuit from his former partner. He was confident he would win on appeal, claiming that evidence exonerating him of violating sanctions against Iran was excluded from his trial.

The prosecution is equally confident he would have lost, and seems quite bitter about losing him to the Iranian prisoner swap, although prosecutors were either unwilling or unable to discuss the matter at length with the media.

“I was mostly disappointed that I have to give up my right to appeal,” he told Reuters. “If they believe in their justice system why would they deprive me of it? Let them prove me wrong.”

Modanlo told the New York Times authorities gave him only two hours to decide if he would take the original offer of release with his felony conviction still on the books. This prompted “a two-day frenzy of phone calls from prison involving his lawyers, relatives, the Justice Department and Iranian consular officials.” The Administration spoke to reporters about Modanlo taking the deal before he actually signed on.

Modanlo eventually took the deal, hours before the final deadline, saying a “tearful call from his sister in Iran” finally convinced him to go along. The New York Times says it is “unclear” whether Modanlo’s reluctance threatened to scuttle the entire prisoner deal with Iran, although Reuters seems much more confident that it would have.

He walked out of federal prison in Richmond, Virginia the next day, released so suddenly that the NYT says prison officials had to give him jeans and a T-shirt to wear.

Modanlo, 55, who was born in Iran but came to the U.S. in 1979, is not getting off scot-free, even with that $10 million judgment voided. “He lost his business and home, which he had to mortgage and remortgage multiple times to help pay legal bills and other expenses, which he estimated were in the millions of dollars,” the New York Times reports. He is barred from profiting from his case, as he could have done by writing a book about it, and says he is deeply disappointed that he will probably never be able to pursue his lifelong ambitions in the aerospace industry again. He ended up serving two years of his five-year sentence, the longest prison term of anyone the Administration swapped with Iran.