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
In the prisoner swap, five Americans held in Iran were released at
the same time as seven Iranians charged or imprisoned in the United
States were granted pardons or had their sentences commuted. The
deal accompanied the Jan. 16 implementation of a landmark agreement
that curbs Iran's nuclear program in exchange for sanctions relief.
Even after receiving the improved offer on Friday, Jan. 15, Modanlo
said he didn't budge at first. He wanted a chance to clear his name
in court, he says.
“I was mostly disappointed that I have to give up my right to
appeal,” Modanlo, 55, told Reuters in one of his first interviews
since being released.
“If they believe in their justice system why would they deprive me
of it? Let them prove me wrong.”
As part of their clemency agreements, all of the Iranians had to
renounce any claims against the U.S. government. All but one had
been accused of violating the economic sanctions the United States
has enforced against Iran for decades.
Modanlo’s reluctance to accept Obama’s offer became an eleventh-hour
complication to an otherwise carefully staged deal with Iran that
had been negotiated in secret for months by U.S. Secretary of State
John Kerry and his Iranian counterpart.
He only agreed to accept the clemency offer on Saturday, Jan. 16 as
the clock ticked toward what U.S. officials said was the final
deadline, according to Modanlo and U.S. officials.
He was freed the next day from a federal prison near Richmond,
Virginia. The release marked an abrupt conclusion to his case after
a sprawling, decade-long investigation into Modanlo's role in
brokering Iran’s access to space technology. U.S. federal agents had
pursued evidence from the suburbs of Washington to Switzerland and
Modanlo was serving the longest sentence of any of the seven
Iranians and had the most extensive, established connections to
He was also the only one known to have initially declined Obama’s
offer, according to interviews with lawyers for the men.
An official at Iran’s interests section in Washington, Iran’s de
facto embassy, testified in Modanlo’s defense at his 2013 trial. The
same Iranian representative, Fariborz Jahansoozan, was instrumental
in brokering the prisoner exchange in recent months, lawyers for
those involved have said.
“This story is done and over with,” Jahansoozan said when reached by
Reuters, declining to discuss the case in detail. “Please let it go
and move forward.”
After two years in prison, Modanlo says he is finding that hard. “I
know this cloud is going to be over my head forever,” he said.
[to top of second column]
AMERICAN DREAM SOURED
Modanlo grew up in northern Iran, the son of a wealthy landowner. As
a child, he remembers watching the Apollo 11 mission in 1969 that
put American astronauts on the moon and being inspired to become a
Decades later, after moving to the United States and becoming a U.S.
citizen, Modanlo had become a space entrepreneur with a company
valued at $500 million.
He helped launch an American satellite from a Russian rocket in
1995. His company, Final Analysis, focused on the emerging field of
low-orbit satellites for data services.
But a series of missteps drove the company into bankruptcy in 2001,
and Modanlo was sued by a former partner, who accused him of selling
missile technology to Iran.
Modanlo says U.S. authorities used the missile claim to win
assistance from Switzerland in obtaining evidence against him. Raids
at Modanlo’s Maryland home and office seized a truck load of
documents and 120 computer hard drives but no supporting evidence
for that claim, he said.
“They knew this was false. They knew I had no missile technology,”
The ensuing investigation uncovered documents prosecutors say showed
Modanlo brokered a deal between Iran and Russia to launch the
satellite in exchange for a $10 million fee. A Maryland jury
convicted him of sanctions violations after a six-week trial. He was
sentenced to eight years in prison.
In an appeal, Modanlo’s lawyers argued that private communications
between the trial judge and prosecutors had excluded evidence that
could have changed the outcome.
Robert King, one of the judges who heard Modanlo’s appeal,
admonished prosecutors for that practice in an October hearing.
U.S. Attorney Rod Rosenstein said the evidence against Modanlo had
been disclosed in court and proved “beyond any reasonable doubt that
Mr. Modanlo secretly helped Iran launch a satellite for $10
Modanlo said he felt certain the appeal would go his way. Then his
lawyer told him that he would have to give up that appeal and be
stuck with the $10 million forfeiture claim if he took the clemency
“I waive my right to bring a claim against you, but your claim
continues for God knows how many years against me?” Modanlo said.
“After back and forth a number of times they agreed to take the $10
million off the table.”
After calls from his attorneys and Iranian representatives failed to
convince Modanlo to take the clemency, it was a pleading and tearful
call from his sister in Iran that finally made him relent, he said.
“If it was for me, I would never have taken the deal,” he said.
(Editing by Kevin Krolicki and Stuart Grudgings)
[© 2016 Thomson Reuters. All rights
Copyright 2016 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.