By Dan Christensen, FloridaBulldog.org
As the war with Iran unfolded, Tehran came under attack on another, less noticed front: a barrage of legal papers issued from a federal courthouse in Manhattan.
The filings concern the claims of thousands of American victims of Iranian terrorism to what now appears to be a major sticking point in the announced peace deal: $24 billion in frozen Iranian assets.
Iran has never responded to the terrorism allegations against it, and default judgments were entered between 2011 and 2025. The claimants and their accusations have been vetted by the courts. The largest group — about 13,000 people — consists of 9/11 survivors and the families of the nearly 3,000 men, women and children who died nearly 25 years ago.
Lawyers for numerous victims recently obtained multimillion-dollar judgments and effectuated service by having the court clerk send formal notices of those judgments, in Farsi, to the Islamic Republic of Iran’s Ministry of Foreign Affairs through the American Interests Section of the Swiss Embassy in Tehran.
Why the flurry now? The congressionally mandated U.S. Victims of State Sponsored Terrorism Fund, which compensates victims using fines, civil penalties and forfeited property collected from companies caught doing business with state sponsors of terrorism, set a June 1 application deadline for new claimants to participate in an anticipated distribution on Jan. 1. Many 9/11 plaintiffs asked judges to expedite consideration of their claims to meet that deadline.
Thousands of other non-9/11 victims of Iran hold similar judgments arising from dozens of atrocities over the decades. They and their families include the 54 Americans held hostage for 444 days after the U.S. Embassy in Tehran was seized in 1979; the 241 U.S. military personnel killed in 1983 when Iran-backed Hezbollah terrorists detonated a truck bomb at a Marine compound in Beirut, Lebanon; and the victims of the 1996 Khobar Towers truck bombing at a U.S. Air Force housing complex in Dhahran, Saudi Arabia, where Iran-backed Hezbollah fighters killed 19 U.S. airmen and wounded nearly 500 others.
With the terms of the memorandum of understanding, or MOU, between the United States and Iran still under wraps, public confusion persists. Attorney James Kreindler, whose law firm has played a central role in documenting events leading up to 9/11, advocating for victims in Washington and wrangling judgments in New York, said, “I have no idea what’s under discussion, other than what I read in the paper.”
The most authoritative reports out of Iran indicate that the status of the billions now on ice has yet to be settled. But the assets’ importance to Iran was made clear by the military adviser to Supreme Leader Ayatollah Mojtaba Khamenei in a June 5 interview with CNN:
“If he (President Donald Trump) wants to reach an agreement with Iran, this $24 billion is a test of trust that Iran wants to have with Trump – this is a test that America must pass and the path will be opened,” Mohsen Rezaei said. “This is our own money, not America’s money.”
[Those funds do not appear to include the value of 127,271 bitcoin, worth $8.375 billion as of 6 p.m. Tuesday, allegedly stolen from a China-Iran crypto mining operation and now in the hands of U.S. authorities. The bitcoin, now being claimed by thousands of Iranian terrorism victims, was the byproduct of a wire fraud and money laundering conspiracy that led to the October indictment of Chen Zhi, the founder and chairman of Cambodia-based Prince Holding Group.]
IRAN OWES AMERICAN TERROR VICTIMS BILLIONS
Saudi Arabia has long been the primary focus of the massive 9/11 civil suit in New York, which seeks to assign blame and collect damages for the deaths and injuries inflicted when al Qaeda hijacked four passenger jets and turned them into missiles on Sept. 11, 2001. The kingdom’s culpability remains in dispute as it appeals a federal judge’s ruling last August denying its motion to dismiss the case. But in 2011, the court found that Iran, to include its Islamic Revolutionary Guard Corps, was responsible for providing “material support” to al Qaeda based on statements by three Iranian government defectors vetted by the CIA.
In the wake of that decision, many victims obtained large judgments against Iran a decade ago, and some did so more recently. “There are more than 25,000 victims of state-sponsored terrorism, of which 98 percent hold judgments against Iran,” said Angela Mistrulli, founder of American Victims of State-Sponsored Terrorism United. “More than $125 billion is owed in legal debt to American victims.”
Mistrulli, of Eau Claire, Wis., was 17 when her father, Joseph, died at work on the 107th floor of New York City’s World Trade Center North Tower. She said he was a master carpenter renovating windows at the Windows on the World restaurant.
Mistrulli said American victims to whom Iran owes money are upset by the Trump administration’s handling of the war negotiations — and by their exclusion from the discussions despite their overtures to the White House.
“The families are distraught. I can’t tell you how many messages I received in the last 48 hours from families victimized in several different terrorist attacks,” she said Monday. “We have been waiting decades for justice and we see Washington extending concessions and relief and negotiations to the very regime that was responsible for these murders. The missing piece that we see is the courage to stand up with the American victims. We see them standing with the regime that murdered our loved ones.”
“A real concern is that if we do release assets to Iran, what type of deterrence is that to terrorism? We saw what happened when assets were returned in 2015-16. There was a massive uptick in funding for Hamas and Hezbollah, and all we saw was continued terrorism, along with continued injury and murder of Americans. We truly feel the only way to stop that is to hold Iran accountable for the last 47 years of destruction it has caused.”
[In January 2016, the U.S. settled Iran’s 1981 arbitration claim at The Hague regarding an aborted pre-1979 arms deal. The Obama administration transferred a total of $1.7 billion to Iran, which consisted of $400 million in original principal and $1.3 billion in accrued interest.]
WILL VICTIMS BE VICTIMIZED AGAIN?
Should President Trump fail to take account of Iranian-terrorism victims holding legal judgments, the hurt will run deep.
“My clients would be victimized again, as would every other victim of Iranian terrorism,” said New York attorney Jerry Goldman, whose firm, Anderson Kill, represents thousands of 9/11 victims, including the family of John O’Neill, the FBI counterterrorism expert who repeatedly warned the U.S. government about the threat posed by al Qaeda and Osama bin Laden.
O’Neill, frustrated by bureaucratic roadblocks, quit the FBI in August 2001 to take a job as security director for the World Trade Center. He died in the collapse of the South Tower.
The United States and Iran are set to formally sign in Geneva on Friday the nonbinding MOU that would halt hostilities that began on Feb. 28 when the U.S. and Israel launched a massive military campaign codenamed “Operation Epic Fury” with airstrikes across Iran. Fighting would cease for at least 60 days, allowing time for negotiations to resolve significant outstanding issues, most notably regarding the fate of Iran’s nuclear program.
Angela Mistrulli said her group and other victims’ groups are coordinating a “fly-in” to Washington on July 20-21, the midpoint of the 60-day negotiating period. “We’re looking at pulling permits and having hundreds of family members there with the goal of getting our point across in Washington: They cannot abandon the victims.”
“We would like to see the administration publicly lay out a plan for the American victims who hold these judgments. But if we cannot get that from the administration, we would like to see Congress reintroduce a version of HR 3457, which would prohibit these funds from going to Iran.”
[HR 3457, the Justice for Victims of Terrorist Act, was a bill introduced in 2015 that would have prohibited the president from providing sanctions relief to Iran until Iran compensated its American victims. It passed the House but died in the Senate.]
“Every single House Republican spoke on the floor on Oct. 1, 2015 … and said no money should ever go to Iran before victims are taken care of. Yet every single one of those House Republicans are completely silent on this right now,” Mistrulli said.
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