SDNY Judge Calls for DOJ Probe of Prosecutorial Misconduc

A federal judge called for a Justice Department investigation into alleged prosecutorial misconduct tied to the Southern District of New York’s mishandling of a criminal case linked to the evasion of U.S. sanctions against Iran, which resulted in a jury conviction being tossed out.

The order from U.S. District Judge Alison J. Nathan of the Southern District of New York, followed a blistering September opinion that took to task the Manhattan U.S. Attorney's Office for making “countless” belated disclosures to lawyers representing Ali Sadr Hashemi Nejad before, during and after his trial.

A Manhattan federal judge called on the Justice Department’s Office of Professional Responsibility to investigate “systemic” failures brought to light by the bungled prosecution of an Iranian businessman accused of funneling more than $115 million through the American financial system.

U.S. District Judge Alison Nathan has repeatedly lambasted the U.S. Attorney’s Office for the Southern District of New York for its botching of the case against Iranian businessman Ali Sadr Hashemi Nejad, who was charged with a host of crimes in 2018 connected to his alleged efforts to circumvent U.S. sanctions against Iran and was found guilty last year, only to have the case dismissed after it was revealed prosecutors withheld exculpatory evidence.

“The disclosure failures and misrepresentations in this case represent grave derelictions of prosecutorial responsibility. However, based on the record before it, the Court does not conclude that any of the prosecutors knowingly withheld exculpatory information or intentionally misrepresented facts to the Court. In light of this, and given the systemic nature of the errors and misconduct that occurred in this case, the Court will not engage in further fact-finding,” Nathan said. "Instead, the Court urges a full investigation by DOJ’s Office of Professional Responsibility of all matters related to prosecutorial misconduct in this case. It is the Court’s hope that reforms adopted by the United States Attorney’s Office, coupled with a full investigation by OPR, will ensure that the Government’s errors in this case are not repeated.”

The Justice Department did not immediately comment on the judge’s suggestion the DOJ investigate these actions further. It remains to be seen what effect the rare, high-profile rebuke of the powerful Manhattan prosecutor’s office, widely considered the second most powerful DOJ office outside of Main Justice, may have.

Nathan added: “The Government’s prosecution of Mr. Sadr for alleged evasion of sanctions against Iran was marred by repeated failures to disclose exculpatory evidence and misuse of search-warrant returns. These errors were so severe that following a jury verdict in its favor, the Government determined that further prosecution of the case would not be in the interests of justice. On the joint request of the parties, the Court vacated the jury verdict and dismissed the charges against Mr. Sadr with prejudice.”

Our New York malicious prosecution lawyers know all too well that discovery abuses by the prosecution, deprive people of the evidence they need to defend themselves and to challenge the government's case. In this case, a conviction was thrown out and once the suppressed evidence came to light the government did not feel it could go forward with a prosecution, which means that in all likelihood, the conviction was obtained through suppressed evidence and a distorted factual picture.  This unfortunately is not an isolated occurrence in New  York criminal courts. 

Nejad, an Iranian businessman who was educated in the U.S., was accused of funneling over $100 million to his family businesses through financial transactions in Venezuela to evade sanctions on Iran. The indictment against him in 2018 alleged he and other Iranians “conspired to evade U.S. sanctions” to benefit himself and the Iranian International Housing Corporation by concealing financial transactions from U.S. banks to provide services to Iran in violation of the International Emergency Economic Powers Act and the Iranian Transactions and Sanctions Regulations.

The Iranian was found guilty on five of six counts (conspiracy to defraud the U.S., conspiracy to violate the International Emergency Economic Powers Act, bank fraud, bank fraud conspiracy, and money laundering) after a jury trial in March 2020. The case was dismissed, and the jury verdict vacated in the summer. Since then, the prosecution’s botching of the case has come into clearer focus.

If you were wrongfully convicted, because the police or prosecutors withheld favorable evidence, or used fabricated evidence, call our New York malicious prosecution lawyers for a free consultation.