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Reuters: U.S. Dropped $10 Million Court Claim to Facilitate Hostage Release by Iran

The United States dropped a $10 million claim against an Iran-born engineer convicted of sanctions-related offenses in order to facilitate the release of five Americans held by the Islamic Republic, Reuters reported on Wednesday.

Nader Modanlo is one of the seven Iranians who were pardoned or had their sentences commuted in exchange for the freedom of five U.S. citizens held by Iran. Modanlo, who had extensive and established connections to the Iranian regime, initially refused his freedom, saying he preferred to file an appeal in court. His refusal led the U.S. to surrender a $10 million claim against him in an effort to make the clemency agreement even more compelling.

A Maryland jury found that Modanlo had taken a $10 million payment from Iran for his help in launching the country’s first satellite in 2005. Modanlo claimed that the money was a loan from a Swiss company.

The Wall Street Journal reported earlier this week that, just as Iran freed American prisoners Jason Rezaian, Amir Hekmati, Saeed Abedini and two others, the U.S. wired a payment of $1.7 billion to Iran. While the White House emphasized that the money was meant to settle an Iranian claim against the U.S., its timing heightened concerns that it was a ransom payment.

The American fund used to pay the $1.7 billion to Iran was the same one used by the U.S. to pay its own citizens and companies who were seeking damages against the Islamic Republic. “[The] US paid twice—to Iran and US citizens. Iran has never paid at all,” wrote Lee Smith, a senior fellow at the Hudson Institute.

The Journal‘s report came shortly after an Iranian general claimed that the payment was ransom.

At the same time that the deal to free the five American hostages held by Iran was being finalized, three American contractors were abducted in Iraq. U.S. intelligence officials believe that the men were taken by Iran-backed Shiite militias.

[Photo: Tracy O / Flickr ]