Full opinion text
MEMORANDUM OPINION AND ORDER RICHARD J. HOLWELL, District Judge: In this in rem forfeiture action, the United States seeks to forfeit real properties, partnership interests, and accounts owned by or under the control of claimants 650 Fifth Avenue Company, the Alavi Foundation (the “Foundation”), Assa Corp., and Assa Ltd. (together, with Assa Corp., the “Assa Claimants”). The government alleges that these properties are the proceeds of illegal services that the claimants allegedly provided to the Islamic Republic of Iran in violation of the International Emergency Economic Powers Act (“IEEPA”); traceable to such proceeds; or involved in the laundering of such proceeds. The claimants have moved to dismiss the complaint for failure to state a claim for which relief can be granted. For the reasons set forth below, the motion is denied. BACKGROUND The story of this case begins in 1973 when Shah Reza Mohammad Pahlavi, then the Shah of Iran, established a non-profit charitable foundation under the laws of the State of New York. (Compl. ¶ 24.) The Shah named the foundation the Pahlavi Foundation and caused the Iranian government to loan the foundation $42 million. (Id.) The loan was made by Bank Markazi (the Central Bank of Iran) to Bank Melli Iran, a slate-owned financial institution, and in turn to the Pahlavi Foundation. (Id.) The funds were used to purchase real estate at 650 Fifth Avenue in Manhattan and to construct a commercial office building on the property (“the Building”). (Id.) In 1979, a revolution toppled the Shah, who fled Iran, and Ayatollah Ruhollah Khomeini returned from exile to take control of the Iranian government. (Id. ¶ 25.) On April 1, 1979, Khomeini proclaimed the establishment of the Islamic Republic of Iran. (Id.) During this political upheaval, the directors of the Pahlavi Foundation resigned and were replaced. (Id. ¶27.) And on February 25, 1980, the foundation filed an amended Certificate of Incorporation which changed the name of the Pahlavi Foundation to “The Mostazafan Foundation of New York.” (Id.). The name of that foundation, which later became the Alavi Foundation (and therefore is also referred to below as the “Foundation”), referred to the Bonyad Mostazafan, an entity formed by the newly established Revolutionary Council of the Islamic Republic of Iran to manage property expropriated by the revolutionary government. (Id. ¶ 26.) A. The Formation of the Partnership In the years following the revolution, the Foundation ran into a problem caused by its outstanding loan from Bank Melli. The federal tax code classified rent from the Building as debt-financed income unrelated to the Foundation’s charitable services on which the Foundation was required to pay taxes. (Id. ¶ 31.) In 1987, Tahmasb Mazaheri, then the Deputy Prime Minister of Iran and the head of the Bonyad Mostazafan, wrote a letter on Bonyad Mostazafan letterhead to Mir-Hossein Mousavi, then the Prime Minister of Iran, regarding “a major problem of the Mostazafan Foundation of New York, namely the debt they owe to the New York branch of Bank Melli Iran.” (Id. ¶ 32.) Mazaheri asked Mousavi to approve a plan to transfer ownership of the Building to a new legal entity owned by the Mostazafan Foundation and a to be formed European company who would pay the debt balance to Bank Melli in exchange for its ownership share. (Id.) Mazaheri reported that he had discussed the plan with the director of the Central Bank of Iran and the general director of Bank Melli. (Id.) Mazaheri wrote another letter to Mousavi later in 1987 again requesting approval for the plan and estimating that the plan would result in tax savings of $3.5 million. (Id. ¶ 33.) In a letter dated December 1, 1987 on letterhead entitled “Islamic Republic, Office of the Prime Minister,” Mousavi authorized the plan proposed by Mazaheri, who forwarded the letter to the director of the Central Bank of Iran. (Id. ¶ 34.) However, for some reason not apparent from the complaint, the plan was not executed in 1987. On March 22, 1988, Habib Zobeidi OmJarideh, a member of the Board of Directors of the Foundation, wrote a letter on the Foundation’s letterhead to Mohammad Badr Taleh, the President of the Foundation, in a renewed attempt to solve the tax problem. (Id. ¶ 36.) The letter noted that the plan advanced by Mazaheri “was presented for two reasons: l.[t]o avoid paying an unnecessary and large amount of taxes to the U.S. government” and “2. [t]o express our concerns about possible interference by the New York public prosecutor in the Foundation’s business.” (Id.) Zobeidi advised against the plan because the IRS would consider it tax evasion since “no real change has been made except the loan has been changed in name to capital, with the only result being the payment of no tax.” (Id.) And on March 14, 1989, Badr wrote to Mazaheri requesting approval to enter into a long-term lease of the Building as an alternative. (Id. ¶ 37.) However, the Bonyad Mostazafan rejected this proposal and instead approved the plan originally advanced by Mazaheri. On July 31, 1989, the Foundation entered into a written partnership agreement (the “Partnership Agreement”) with Assa Corp., a corporation newly organized under the laws of the State of New York, that established a partnership called 650 Fifth Avenue Company (the “Partnership”). (Id. ¶ 41.) Pursuant to the Partnership Agreement, the Foundation agreed to contribute the Building and Assa Corp. agreed to contribute $44.8 million to the Partnership, to be used to retire the debt on the Building owed to Bank Melli. (Id. ¶ 42.) The Foundation initially took a 65% interest in the Partnership; Assa Corp. took the remaining 35% interest. The Foundation now owns a 60% interest in the Partnership and Assa Corp. owns the remaining 40% interest. (Id. ¶ 20.) In correspondence with the New York Attorney General, the Foundation, through counsel, represented that the officers of the Partnership were Mohammad Hossein Behdadfar, Moshen Kakavand, and Peter Livingston, and that the directors were Behdadfar and Kakavand. (Id. ¶¶ 43-44.) The Foundation also represented that the sole shareholder of Assa was Assa Co. Ltd., an entity organized under the laws of Jersey, Channel Islands, United Kingdom; that Assa Ltd.’s sole beneficial owners were Behdadfar and Kakavand; and that “there were no pre-existing arrangements or understandings between any director, officer or principal of Assa Corp. and the [Mostazafan] Foundation.” (Id. ¶ 44.) Badr, the President of the Mostazafan Foundation, made similar representations in a verified petition filed in New York State Supreme Court for leave to transfer the Building to the Partnership. (Id. ¶ 46.) And the Foundation, through counsel, represented to the Assistant Attorney General that “the formation of the Partnership represents an arms-length transaction between the Foundation and Assa Corp.” (Id. ¶ 45.) B. Assa Corp. and Bank Melli The government alleges that these representations were false because contemporaneous correspondence and minutes of meetings of Bonyad Mostazafan officials show that Assa Corp. was actually controlled by Bank Melli. The government alleges that Behdadfar and Kakavand, officers and directors of the Partnership and the beneficial owners of Assa Co. Ltd., were, respectively, a Bank Melli board member and a manager of the London branch of Bank Melli. (Id. ¶ 40.) The government quotes from meeting minutes and letters signed by Bonyad Mostazafan officials that describe the Partnership as the result of “the mutual agreement between the New York Foundation and Bank Melli Iran”; a “partnership agreement between the Mostazfan Foundation of New York and Bank Melli Iran”; and “agreements between the Ministry of Finance, Bank Melli Iran, and the Bonyad Mostazafan.” (Id. ¶¶ 38-39.) These documents also state that “Assa Co., which belongs to Bank Melli, is the partner of the Mostazafan Foundation” and that the Bonyad Mostazafan “decided to form a company called Assa Channel Islands which would be financed by the bank and under direction of Mr. Behdadfar and Mr. Kakavand.” (Id. ¶¶ 39-40.) The government alleges that Assa Co. Ltd., and thus Assa Corp., continue to be owned by two individual shareholders, Davood Shakeri and Fatemeh Aghamiri, who are Iranian citizens and representatives of Bank Melli. (Id. ¶ 47.) The sole employee of Assa Corp. in the United States from 1996 through late 2008 was Mohammad Hassan Dehghani Tafti, an Iranian citizen who allegedly obtained visas to enter and work in the United States under false pretenses. (Id. ¶¶ 112— 116.) The complaint quotes from e-mails sent by Tafti and received by Tafti from officials in the Overseas Network Supervisory Department (ONSD) of Bank Melli regarding Assa Corp. business. These emails reflect that Tafti requested information regarding Assa Corp.’s expenses, a possible sale of the Building, loan documentation, and financial statements from Bank Melli officials. (Id. ¶ 117.) The emails also reflect that Tafti requested that Bank Melli officials change the residence of the Assa Co. Ltd. shareholders, Shaken and Aghamiri, to a country other than Iran. (Id.) The complaint also quotes telexes in which officials at the office of Bank Melli in New York and the ONSD discussed the possibility of transferring ownership of Assa Corp. from Assa Co. Ltd. to Bank Melli. (Id. ¶¶ 118-119.) These telexes state that “Assa Corporation’s legal issues are now being handled by” the New York Office of Bank Melli and that “Bank Melli Iran, which belongs to the Islamic Republic of Iran and is naturally not subject to current U.S. laws, is the owner of Assa Corporation through two other companies.” (Id. ¶ 119.) The same telexes note “the risk of seizure of the elements connected to the Islamic Republic of Iran’s assets in the United States .... in case of the revelation of the ownership by Assa Corporation.” (Id.) C. The Foundation and the Iranian Mission to the United Nations Just as the complaint alleges that the Iranian government controls Assa Corp. through Bank Melli, the complaint also alleges that the Iranian government has continued to control Assa Corp.’s partner, the Foundation. The complaint quotes from a letter dated May 7, 1991 from the members of Foundation’s Board of Directors to the Ayatollah Khomeini declaring their intention to comply with the Ayatollah’s request for their resignations. (Id. ¶ 50.) On May 16, 1991, the Foundation held a board meeting in Zurich, Switzerland at which representatives of the Bonyad Mostazafan were also in attendance. (Id. ¶ 52.) According to the minutes from that meeting, the head of the Bonyad Mostazafan informed the board members that all but one of the members were to resign “as directed by the Supreme Leader,” ie., the Ayatollah Khomeini. (Id.) The same minutes show that the board received a report “regarding the status of the building, its office floors, and retailers” and that the “Directors very much appreciated the way in which they have executed their duties, in particular regarding the collection of $5.5 million from one of the tenants.” (Id.) After that meeting, control of the Foundation allegedly shifted from the Bonyad Mostazafan to the Iranian Mission to the United Nations. The complaint quotes from 1991 correspondence indicating that Kamal Kharrazi, then Iranian Ambassador to the United Nations, called Badr, the president of the Foundation, to inform him that Kharrazi was “directly responsible for the Foundation” and that the “Board of Directors will be just a formality.” (Id. ¶ 54.) Other quoted correspondence indicates that the Ambassador was “trying to make the point that hereafter he is to be considered the Foundation’s employees[’] point of contact and the Foundation will operate under the Iranian Mission office,” and that the Ambassador and his brother had “told almost everyone that they will be directly responsible for the Mostazafan Foundation of New York and will not only-control its activities, but supervise it as well.” (Id. ¶¶ 54, 58.) The complaint also quotes from letters sent by Badr to the Ayatollah, Kharrazi and others in 1991 in which Badr warned that Kharrazi was “resorting to a channel unacceptable by the laws and regulations governing non-profit organizations in America” and that “Kharrazi’s involvement poses a great danger to the Foundation.” (Id. ¶¶ 55-57.) In particular, Badr warned that he “and other members of the Foundation’s Board of Trustees have frequently signed affidavits addressed to American authorities ... stating that the Foundation is independent and devoid of any connection to the Government of Iran and the Iranian Government’s qualified authorities.” (Id. ¶ 59.) Nevertheless, Badr agreed to abide by the instructions of the Ayatollah and resigned his post on July 7, 1991. (Id. ¶ 60.) He was replaced later that summer as President of the Foundation by Mohammad Geramian. (Id. ¶ 61.) In 1992, the Foundation changed its name to the Alavi Foundation. (Id. ¶ 27.) According to the complaint, however, the Foundation continued to be controlled by the Iranian Mission. The complaint alleges that Kharrazi and his successors, Seyed Mohammad Hedí Nejad Hosseinian, Ambassador from 1999 to 2002, Javad Zarif, Ambassador from 2002 to 2007, and Mohammad Khazaee, who succeeded Zarif, all attended Foundation board meetings and directed Foundation affairs. (Id. ¶¶ 63, 66-77.) The complaint alleges that these meetings took place both at a property in Queens owned by the Foundation as well as at the official residence of the Ambassador in New York. The complaint also alleges that, at least as late as 2007, these meetings involved discussions about Foundation affairs, including the Building and the Partnership. (Id. ¶¶ 67-68.) For example, the complaint quotes from notes of a meeting between Khazaee, a former cultural attaché at the Iranian Mission, a Foundation board member, and Farshi Jahedi, who replaced Geramian as President of the Foundation, that was held at the Ambassador’s residence in October 2007. The notes, which are titled “Board Meeting,” reflect that Khazaee gave directions regarding Foundation affairs, asked that “contact with him” be “increased,” and directed that “I have to be kept informed and I have to be able to state my opinion in order for you to make a decision” as well as that “we have to be kept informed regarding the general on goings and allocations because we will be held responsible.” (Id. ¶ 74.) With regard to “[t]he composition of the Board of Trustees,” Khazaee said that “[wjhatever I decide should be approved and it should not be otherwise.” (Id.) In addition, the notes reflect that Khazaee asked “[w]hat are you doing to safeguard the interests of the regime....?” (Id.) The notes also indicate that Khazaee asked others to “[s]et aside a budget for the building and bring it up to par.” (Id.) The complaint also alleges that Zarif, the Ambassador from 2002 to 2007, directed the Foundation to settle a lawsuit against it, Assa Corp., and Assa Ltd. arising out of an alleged agreement to sell Assa Corp.’s interest in the Partnership to an entity called the Hanif Partnership. (Id. ¶ 78-81.) The Hanif Partnership’s complaint alleged that the Foundation refused to accept any new partner because “a new partner might some day inform the Attorney General of the State of New York that Alavi was mismanaging or even wasting its assets and could seek involuntary judicial dissolution of the Alavi Foundation.” (Id. ¶ 80.) D. The Foundation, Bank Melli and the Iranian Government Such allegations posed a risk because the Partnership allegedly had not been paying distributions to Assa Corp. The complaint quotes from minutes of an August 25, 1992 meeting in Tehran between Bank Melli officials and Garamian, the President of the Foundation and Director of the Partnership, to discuss two issues: (1) distributions that the Partnership owed to Assa Corp.; and (2) real estate taxes owed by the Partnership that Assa Corp. claimed the Foundation was responsible for paying pursuant to the Partnership Agreement. These minutes again describe a “partnership between the Foundation and the Bank” rather than between the Foundation and Assa Corp. (Id. ¶ 83.) The managing director of Bank Melli forwarded those minutes to the head of the Bonyad Mostazafan in a letter stating that “the Alavi Foundation of New York is in partnership with this Bank in the ownership of the building at 650 5th Ave., New York” and describing Bank Melli as “one of the pillars of the Islamic Republic of Iran.” (Id. ¶¶ 85-86.) The letter indicated that Garamian had met with Bank Melli officials in attempt to resolve the issues regarding the distributions and taxes and requested the Bonyad Mostazafan’s “firm instructions” to “resolve the partnership’s mutual problems quickly.” (Id. ¶ 87.) In other correspondence regarding the dispute between Assa Corp. and the Foundation regarding real estate taxes, Bank Melli officials asked “should the two sides of the partnership — which are the organs of the Islamic Republic of Iran — claim that due to the other sides’s unfamiliarity with local laws, try to take advantage of the other side and ... impose a financial burden on the other party?” (Id. ¶ 88.) E. The Foundation’s Alleged Concealment The complaint alleges that the Foundation concealed these alleged connections with the Iranian government to shield itself from lawsuits brought by judgment creditors of the Islamic Republic of Iran. In 1992, Norman Gabay filed a lawsuit against the Bonyad Mostazafan and the Foundation for damages from the alleged expropriation by the Iranian government of businesses he owned. See Gabay v. Mostazafan Found, of Iran, 968 F.Supp. 895 (S.D.N.Y.1997). The complaint quotes from correspondence in which Garamian asked the Bonyad Mostazafan for guidance regarding the lawsuit, which in his view required “the denial of any relationship as well as financial and administrative relations between the government of Iran and Mostazafan____” (Id. ¶ 106.) Geramian submitted an affidavit in which he affirmed that “[t]he New York Foundation conducts no business with the Government of Iran or the Mostazafan Foundation of Iran” and “has never been the agent or instrumentality of the Government of Iran or the Mostazafan Foundation of Iran.” (Id. ¶ 103.) Geramian repeated that denial at his deposition, and, at another deposition, a board member whom the complaint alleges had resigned along with Badr in 1991 at the behest of the Ayatollah denied that he ever received instructions from “any person or entity in Iran.” (Id. ¶¶ 104-105.) The court dismissed the action for lack of subject matter jurisdiction because “the facts developed by Gabay d[id] not show that the [Mostazafan] Foundation exercised control over the day-to-day activities of the New York Foundation.” Gabay, 968 F.Supp. at 899. The complaint alleges that the Foundation submitted the same affidavits and deposition testimony in an attachment action to execute a judgment entered against Iran in a wrongful death suit by the father of a woman killed by a terrorist attack in Gaza. (Id. ¶ 108.) That suit was also dismissed because the “Plaintiff [could not] establish that the Foundation was an agent, alter ego, or instrumentality of the Iranian Government” where the Foundation “submitted proof by affidavit that the Directors are elected by the Foundation itself,” that “the Foundation files its own tax returns____that it is funded through the rental income that it receives from the interest it has in its building located in New York City,” that “the Foundation has its own bank accounts,” and that “it hires its own employees and that none of these employees are agents, officers, or employees of the Iranian Government as well.” See Flatow v. Islamic Republic of Iran, 67 F.Supp.2d 535, 542-43 (D.Md.1999). F. The Partnership and the Building The complaint alleges that the Foundation is the managing partner of the Partnership and that Geramian, the President of the Foundation from 1992 through 2007, also served as Director of the Partnership. The government alleges that, in its capacity as managing partner, “[t]he Alavi Foundation has played a critical role in managing the Building, acting as the Building’s managing partner and overseeing all of the Building’s finances.” (Id. ¶ 98.) Indeed, the Partnership Agreement provides that “the Foundation shall have the obligation of administering the day-to-day business and affairs of the Partnership.... ” (Id. ¶ 96.) The Partnership Agreement further provides that the “Foundation shall have the authority to make the following decisions and take the following actions without obtaining the prior written consent of any other Partner: (i) the execution of any lease of space in the Building having a rentable area of less than twenty-five thousand (25,000) square fee[t] of rentable floor area and a term of less than five (5) years.... (ii) contracting with vendors of supplies and services required in the ordinary course of business of the Partnership and payment of all sums due therefor, provided that such contract does not provide for the payment, per annum, of an amount in excess of [$100,000].... (iii) payment of all taxes that are due; and (iv) prosecuting, defending and/or resolving by settlement all disputes provided that such litigation and/or settlement would not require payment by the Partnership of consideration reasonably valued at more than [$100,000].... (Id.) The complaint alleges that, pursuant to this authority, the Foundation managed the Building on behalf of the Partnership until December 1997, and that from that time through the present, two real estate management companies have managed the Building, ostensibly through agreements with the Partnership that were signed by the Geramian, the President of the Foundation and Director of the Partnership. (Id. ¶ 97.) As managing partner, the Foundation allegedly directed ownership distributions of rent earned from the Building to itself and to Assa Corp. (Id. ¶ 100.) The Foundation also directed the Partnership to pay the Foundation tens of thousands of dollars in management fees, some of which was used to pay for the salaries of the Foundation’s officers. (Id.) And the Foundation’s federal tax returns show that the Partnership paid the Foundation for expenses. (Id. ¶ 99.) G. Defendant Properties The government seeks to forfeit the Building as well as the Foundation’s and Assa Corp.’s interests in the Partnership. The government also seeks to forfeit (1) accounts held in the name of the Partnership (the “Partnership Accounts”); (2) accounts held in the name of the Foundation (the “Foundation Accounts”); (3) accounts held in the name of Assa Corp. (the “Assa Accounts”); and (4) seven other real properties owned by the Foundation (the “Other Real Properties”). 1. Partnership Accounts The government seeks to forfeit two accounts owned by the Partnership used to pay distributions to the Foundation and to Assa Corp. as well as for maintenance and other expenses on the Building. (Id. ¶¶ 130, 133.) The government alleges that “[t]he only source of funds in the Partnership Accounts is income from the Building.” (Id.) 2. Foundation Accounts The government seeks to forfeit three accounts held in the name of the Foundation. The government alleges that “the vast majority of the Alavi Foundation’s income has consisted of proceeds of the Building” and alleges that the Foundation earned $38.9 million from the Building from 1999 through 2007 as compared with only $3.8 million from other sources such as one of the Other Real Properties, “dividends and capital gains on investments, [and] interest on savings and temporary cash investments.” (Id. ¶¶ 125-126.) 3.Assa Accounts The government seeks to forfeit three accounts held in the name of Assa Corp. whose only signatory was Tafti, Assa Corp.’s only employee. (Id. ¶ 120.) The government alleges that the Partnership deposited funds into these Assa Accounts and that Tafti drew on funds in the accounts to pay income taxes and to transfer funds to Assa Co. Ltd. (Id. ¶¶ 121-123.) 4.Other Real Properties The government also seeks to forfeit Other Real Properties owned by the Foundation: (1) a property located in Houston, Texas acquired in 1998; (2) a property located in Queens, New York, part of which was acquired in 1991 and the remainder of which was acquired in 1997; (3) a property located in Carmichael, California acquired in 1989; (4) a property located in Catharpin, Virginia acquired in 1990; (5) another property in Catharpin, Virginia acquired at the same time; (6) a property in Rockville, Maryland acquired in 1981; and (7) another property in Rockville, Maryland acquired in 1984. (Id. ¶¶ 1, 134-141.) The government alleges that the Foundation has spent millions of dollars in improvements on these properties. (Id. ¶¶ 134-143.) H. Procedural History The government filed the original verified complaint [1] in this action on December 17, 2008. That complaint sought to forfeit only assets owned or controlled by Assa Corp. and Assa Co. Ltd. who moved [32] to dismiss the original complaint on July 10, 2009. While that motion was pending, the government filed an amended complaint [51] on November 16, 2009. The Court issued an order [50] that the amended complaint rendered the Assa Claimants’ motion moot but that their notices of claim would be deemed sufficient with respect to. the amended complaint. The Foundation and the Partnership filed notices [54, 56] of claim on December 17, 2009. On March 1, 2010, the Foundation and Assa each moved [75, 78] to dismiss the amended complaint. In the meantime, numerous judgment creditors of Iran filed claims to the defendant properties on the ground that the claimants are agents or instrumentalities of the Iranian government. In a case management order [103] dated March 16, 2010, the Court consolidated and stayed these actions pending disposition of the instant motions to dismiss. LEGAL STANDARD Motions to dismiss in rem forfeiture actions are governed by Federal Rule of Civil Procedure 12(b) and Rule G of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions. When considering a motion to dismiss under Rule 12(b)(6), the Court will “consider the legal sufficiency of the complaint, taking its factual allegations to be true and drawing all reasonable inferences in the plaintiffs favor.” Harris v. Mills, 572 F.3d 66, 71 (2d Cir.2009). “ ‘[0]nly a complaint that states a plausible claim for relief survives a motion to dismiss,’ and ‘determining whether a complaint states a plausible claim for relief will ... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.’ ” Id. (quoting Ashcroft v. Iqbal, -U.S.-, 129 S.Ct. 1937, 1950, 173 L.Ed.2d 868 (2009)). Under Rule G(2)(f), a forfeiture complaint must “state sufficiently detailed facts to support a reasonable belief that the government will be able to meet its burden of proof at trial.” The Second Circuit has noted that “[tjhese standards are more stringent than the general pleading requirements set forth in the Federal Rules of Civil Procedure.... ” United States v. Daccarett, 6 F.3d 37, 47 (2d Cir.1993). See also 12 C. Alan Wright, A. Miller, and R. Marcus, Fed. Prac. & Proc. Civ. § 3242 (2d ed.) (“[The Rule] requires a more particularized complaint than is demanded in civil actions generally.... Apparently this requirement for added specifics is thought appropriate because of the drastic nature of those remedies. Thus, it fortifies the procedural-due-process protections against improper use of these remedies.”). Nevertheless, “the complaint need not allege facts sufficient to show that specific property is tainted, but facts sufficient to support a reasonable belief that the government can demonstrate probable cause for finding the property tainted.” Daccarett, 6 F.3d at 47. The complaint “must state the circumstances from which the claim arises with such particularity that the defendant or claimant will be able, without moving for a more definite statement, to commence an investigation of the facts and to frame a responsive pleading.” See Supp. R. E(2)(a) for Admiralty or Maritime Cl. and Asset Forfeiture Actions. Cf. Supp. R. G(2)(f), Adv. Comm. Note. Under the Supplemental Rules, “[n]o complaint may be dismissed on the ground that the Government did not have adequate evidence at the time the complaint was filed to establish the forfeitability of the property.” 18 U.S.C. § 983(a)(3)(D); see also Supp. R. G(8)(b) (same). And “[o]nce the government establishes that there is probable cause to believe that a nexus exists between the seized property and the predicate illegal activity, the burden shifts to the claimant to show by a preponderance of the evidence (1) that the defendant property was not in fact used unlawfully, or (2) that the predicate illegal activity was committed without the knowledge of the owner-claimant, that is, that the claimant is an innocent owner.” United States v. Funds Held in the Name or for the Benefit of Wetterer, 210 F.3d 96, 104 (2d Cir.2000) (internal citation and quotation marks omitted). DISCUSSION A. Political Question The first issue in this case is whether the case is justiciable. The Assa Claimants contend that, because the government has represented that it intends to use any properties forfeited in this action to compensate private plaintiffs with default judgments against Iran, the action presents a non-justiciable political question. The Supreme Court has instructed courts determining whether a case presents a non-justiciable political question to consider whether the case involves the following: a textually demonstrable constitutional commitment of the issue to a coordinate political department; or a lack of judicially discoverable and manageable standards for resolving it; or the impossibility of deciding without an initial policy determination of a kind clearly for nonjudicial discretion; or the impossibility of a court’s undertaking independent resolution without expressing lack of the respect due coordinate branches of government; or an unusual need for unquestioning adherence to a political decision already made; or the potentiality of embarrassment from multifarious pronouncements by various departments on one question. Baker v. Carr, 369 U.S. 186, 217, 82 S.Ct. 691, 7 L.Ed.2d 663 (1962). “Unless one of these formulations is inextricable from the case at bar, there should be no dismissal for non-justiciability on the ground of a political question’s presence.” Id. None of these factors is present here. The Second Circuit has described the first Baker factor as “the dominant consideration in any political question inquiry.” Lamont v. Woods, 948 F.2d 825, 831 (2d Cir.1991). The Assa Claimants invoke the Victims of Trafficking and Violence Protection Act (“VPA”), P.L. 106-386, 114 Stat. 1541-1543 (2000), as amended by the Terrorism Risk Insurance Act (“TRIA”), P.L. 107-297 (2002); President Carter’s decision to nullify attachments of private litigants against Iran; and “the long history of governmental action compensating our own citizens in this county for wrongs done them by foreign governments abroad.” (Assa Br. at 35-36 (quoting Sardino v. Fed. Reserve Bank of New York, 361 F.2d 106, 112 (2d Cir.1966)).) The Assa Claimants argue that these events demonstrate that “[i]t is the prerogative of Congress and/or the Executive — not the judiciary— to determine whether, as a matter of U.S. policy, to create a compensation fund to settle the claims of U.S. citizens against a foreign government.” (Assa Br. at 35.) Yet none of this demonstrates “a textually demonstrable constitutional commitment” to the political branches. Baker, 369 U.S. at 217, 82 S.Ct. 691 (emphasis added). Moreover, “the existence of judicially discoverable and manageable standards further undermines the claim that such suits relate to matters that are constitutionally committed to another branch.” Kadic v. Karadzic, 70 F.3d 232, 249 (2d Cir.1995). There is hardly “a lack of judicially discoverable and manageable standards” for interpreting the statutes the government seeks to enforce. The parties have extensively litigated the application of terms in the forfeiture statutes that are regularly applied and interpreted by the federal courts. These are “clear and well-settled rules on which the district court can easily rely....” Klinghojfer v. S.N.C. Achille Lauro Ed Altri-Gestione Motonave Achille Lauro in Amministrazione Straordinaria, 937 F.2d 44, 49 (2d Cir. 1991) (finding that “common law of tort” provided “judicially discoverable and manageable standards” in an action against the Palestine Liberation Organization). Indeed, for just that reason, another court in this district has found justiciable civil forfeiture proceedings against property of a foreign state. See United States v. Portrait of Wally, A Painting by Egon Schiele, No. 99 Civ. 9940, 2002 WL 553532, at *11 (S.D.N.Y. Apr. 12, 2002) (“The issues to be resolved in the instant case include whether the Leopold owns a painting under Austrian law and whether the Leopold violated United States law in transporting that painting into the United States and thereby subjected the painting to civil forfeiture.... Determining the standards to resolve such a claim ... is within the court’s competence.”) Nor is this a case where the Court has been asked to make “an initial policy determination of a kind clearly for nonjudicial discretion”, such as whether one government has succeeded another, see 767 Third Ave. Assocs. v. Consulate Gen. of Socialist Fed. Republic of Yugoslavia, 218 F.3d 152, 161 (2d Cir.2000); Can v. United States, 14 F.3d 160, 163 (2d Cir.1994), or whether Congress has properly authorized military action, see Berk v. Laird, 429 F.2d 302, 305 (2d Cir.1970). Indeed, in Portrait of Wally, a civil forfeiture proceeding to recover a painting allegedly stolen by the Nazis that was owned by an Austrian national museum and loaned to the Museum of Modern Art (“MOMA”), this court found that “there [wa]s no impermissible policy determination to be made, nor any intrusion on or lack of respect for a decision already made, or yet to be made, that would engage the remainder of the Baker factors.” 2002 WL 553532, at *11. That was because, even though various Austrian laws and treaties signed by the United States provided for mechanisms to recover stolen art, “the Austrian restitution systems ha[ve] never been found to be the exclusive mechanism for the recovery of Holocaust property, and the United States has never committed such claims to the Austrian government.” Id. at *11 (citation omitted). Cf. Alperin v. Vatican Bank, 410 F.3d 532, 555 (9th Cir.2005) (“The Property Claims focus on the extent to which the Holocaust Survivors were wrongfully deprived of personal property and the value of such property that was transferred to the Vatican Bank. Adjudicating these discrete issues will not require the court to make pronouncements on foreign policy or otherwise trigger the third Baker test.”). It is just so here. The Assa Claimants argue that “a compensation fund created as a result of this lawsuit also does not respect the determination of Congress and the President that private plaintiffs must, if they wish to obtain compensation from the U.S. Government, follow the guidelines of the VPA.” (Assa Br. at 38.) But it is hard to see why this case presents any lack of respect for the executive branch when it is the executive branch that is seeking forfeiture. See Kadic, 70 F.3d at 250 (finding “no concern that interference with important governmental interests warrants rejection of appellants’ claims” where the executive branch disclaimed such concerns). Nor would adjudication of this matter evince any lack of respect for the legislative branch. Congress enacted the VPA and the TRIA against the background of the IEEPA and the forfeiture statutes at issue here. Nothing in those statutes did anything to limit the United States’ civil forfeiture authority. On the contrary, the TRIA provided that “[n]othing in this subsection shall bar, or require delay in, enforcement of any judgment to which this subsection applies under any procedure or against assets otherwise available under this section or under any other provision of law.” 116 Stat. at 2339 (emphasis added); see also H.R. Conf. Rep. 106-939, at 118 (2000) (“Future Presidents should follow the precedent set by [the VPA], and find the best way to help victims of terrorism collect on their judgments and make terrorist states pay for their crimes.”). The Assa Claimants also focus on a statement the government made at an April 4, 2009 hearing and argues that “the Government seeks, by this lawsuit, to create a fund to compensate various private plaintiffs with default judgments against Iran.” (Assa Br. at 35.) That is not quite what the government said. Counsel for the government did say that it was the government’s hope “ultimately to provide victims with the proceeds of this IEEPA violation or the property involved in money laundering” but the government also stated that it “currently ha[d] pending a request with the Department of Justice for guidance on how this could be done.” (Tr. of Hr’g, Apr. 3, 2009, at 6:1-7.) Indeed, the government represented that “we haven’t determined, since a decision that’s going to be made out of main justice in Washington.” (Id. at 5:21-23.) That decision seems likely to involve political considerations about the distribution of government resources, and this country’s policy toward Iran. But that does not mean that the application of routinely applied statutes to decide whether the government can recover in the first place involves a non-justiciable political question. “The doctrine ... is one of ‘political questions,’ not one of ‘political cases.’ ” Baker, 369 U.S. at 217, 82 S.Ct. 691. “Given the checks and balances among the three branches of our government, the judiciary can no more usurp executive and legislative prerogatives than it can decline to decide matters within its jurisdiction simply because such matters may have political ramifications.” Conn. v. Am. Elec. Power Co., 582 F.3d 309, 332 (2d Cir.2009). Indeed, in Portrait of Wally, this court rejected an argument very similar to that advanced by the Assa Claimants here. The defendants argued, inter alia, that the forfeiture was “an improperly brought interpleader action” and that the “court [could not] award [the painting] to Bondi’s heirs even if it [wa]s established that the heirs have a legal right to the painting and should prevail on their claim” because “the court’s only options [we]re to forfeit the painting to the government, or return it to MoMA as improperly seized.” 2002 WL 553532, at *28. The court rejected that contention because “[i]f accepted, this argument would frustrate the whole purpose of this proceeding. As is true in every forfeiture case, the government is acting to seize property that is alleged to be the subject of criminal activity. Any person who has a legal interest in the property may file a claim to defend against forfeiture, and a claimant with a meritorious claim will prevail.” Id. at *29. The same is true here. The Court has stayed claims by judgment creditors of Iran pending disposition of this motion and, if necessary, will address whether and how they can recover any assets forfeited through this proceeding. Nothing about that potential determination makes the government’s forfeiture action non-justiciable. B. Civil Forfeiture Under § 981(a)(1)(C) 1. Statutory Framework The government’s first claim for forfeiture arises under 18 U.S.C. § 981(a)(1)(C). That statute provides in relevant part: (a)(1) The following property is subject to forfeiture to the United States: (C) Any property, real or personal, which constitutes or is derived from proceeds traceable to a violation of ... any offense constituting “specified unlawful activity” (as defined in section 1956(c)(7) of this title), or a conspiracy to commit such offense. 18 U.S.C. § 981(a)(1)(C). Section 1956(c)(7) defines “specified unlawful activity” to include “section 206 (relating to penalties) of the International Emergency Economic Powers Act.” 18 U.S.C. § 1956(c)(7)(D). The International Emergency Economic Powers Act (“IEEPA”) was enacted in 1977. The Act empowers the President to employ a variety of economic sanctions and other measures in response to situations which the President has declared national emergencies. See generally 50 U.S.C. § 1702. Section 206 of the IEEPA is codified at 50 U.S.C. § 1705, which provides that “[i]t shall be unlawful for a person to violate, attempt to violate, conspire to violate, or cause a violation of any license, order, regulation, or prohibition issued under this chapter.” 50 U.S.C. § 1705(a). On October 29, 1987, President Reagan issued Executive Order 12613 in which he found that “that the Government of Iran is actively supporting terrorism as an instrument of state policy.” Exec. Order 12613, 52 Fed Reg. 41940 (Oct. 29, 1987). President Reagan ordered that “no goods or services of Iranian origin may be imported into the United States, including its territories and possessions, after the effective date of this Order” and authorized the “Secretary of the Treasury ... to take such actions, including the promulgation of rules and regulations, as may be necessary to carry out the purposes of this Order.” Id. Pursuant to that order, the Office of Foreign Asset Control (“OFAC”) at the United States Treasury Department issued Iranian Transaction Regulations (“ITRs”) to implement the embargo. See 31 C.F.R. 560, 52 Fed Reg. 44076 (Nov. 17, 1987). On March 15, 1995, President Clinton issued Executive Order 12957 in which he found “that the actions and policies of the Government of Iran constitute an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States” and “declare[d] a national emergency to deal with that threat.” Exec. Order 12957, 60 Fed.Reg. 14615 (Mar. 15, 1995). Pursuant to the IEEPA, President Clinton issued an order prohibiting American persons and corporations from engaging in various transactions involving Iranian petroleum. See id. On May 6, 1995, President Clinton issued Executive Order 12959 which more broadly prohibited transactions involving export to, financing of, and investment in Iran. See Exec. Order 12959, 60 Fed Reg. 24757 (May 6,1995). In September 1995, pursuant to the IEEPA and Executive Orders 12957 and 12959, OFAC issued revised ITRs that prohibited a series of economic transactions related to Iran, including several of the regulations that the government alleges have been violated here. For example, 31 C.F.R. § 560.204 prohibits the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of any goods, technology, or services to Iran or the Government of Iran ... including the exportation, reexportation, sale, or supply of any goods, technology, or services to a person in a third country undertaken with knowledge or reason to know that: (a) Such goods, technology, or services are intended specifically for supply, transshipment, or reexportation, directly or indirectly, to Iran or the Government of Iran.... The ITRs also provide that no American person or corporation “may engage in any transaction or dealing in or related to: (1) Goods or services of Iranian origin or owned or controlled by the Government of Iran; or (2) Goods, technology, or services for exportation, reexportation, sale or supply, directly or indirectly, to Iran or the Government of Iran. 31 C.F.R. § 560.206. Further, “any new investment by a United States person in Iran or in property (including entities) owned or controlled by the Government of Iran is prohibited.” 31 C.F.R. § 560.207. The ITRs define the “Government of Iran” to include “[a]ny entity owned or controlled directly or indirectly” by the “the Government of Iran, as well as any political subdivision, agency, or instrumentality thereof,” 31 C.F.R. § 560.304, which “includes any corporation, partnership, association, or other entity in which the Government of Iran owns a majority or controlling interest, and any entity which is otherwise controlled by that government.” 31 C.F.R. § 560.314. On August 19, 1997, President Clinton issued Executive Order 13059 which prohibited a series of economic transactions related to Iran and the Iranian government that largely tracked the provisions of the ITRs just described. See Exec. Order 13059, 62 Fed.Reg. 44531 (Aug. 19, 1997). 2. “Services” Since the government does not allege any provision of “goods” or “technology” under 31 C.F.R. §§ 560.206 and 560.207, the first question as to whether the government has stated a claim for forfeiture based on the alleged activities of the Alavi Foundation and Assa is whether those activities constitute “services to Iran or the Government of Iran” within the meaning of the ITRs. The ITRs themselves do not define the term “services.” The Second Circuit has stated that “[t]he term ‘services’ is unambiguous and refers to the performance of something useful for a fee.” United States v. Homa Int’l Trading Corp., 387 F.3d 144, 146 (2d Cir.2004) (citing United States v. All Funds on Deposit in United Bank of Switzerland, No. 01-CV-2091, 2003 WL 56999, at *1 (S.D.N.Y. Jan. 7, 2003) (finding that “services” “carries its ordinary legal meaning”) (citing Black’s Law Dictionary 1372 (7th ed.1999) (defining “service” as “the act of doing something useful for a person or company for a fee”))). The complaint alleges that Assa Corp. has repeatedly transferred rental income generated from 650 Fifth Avenue Company to Bank Melli through Assa Co. Ltd., has regularly [been] following Bank Melli’s instructions with regard to Assa Corp.’s business affairs and its management of the investment, has regularly reported back to Bank Melli on its financial situation and business dealings, and has managed the affairs of Assa Corp. for the benefit of Bank Melli.” (Compl. ¶ 22.) The complaint quotes from a communication by Bank Melli found at its New York residence stating that “Bank Melli Iran, which belongs to the Islamic Republic of Iran and is naturally not subject to current U.S. laws, is the owner of Assa Corporation through two other companies.” (Id. ¶ 119.) Indeed, the complaint describes numerous communications from Assa Corp.’s sole employee in the United States to Bank Melli that reflect efforts to sell Assa Corp.’s interest in the Partnership, manage Assa Corp.’s American bank accounts, document Assa Corp.’s expenses, and restructure Assa Corp.’s ownership for tax purposes. (Id. ¶¶ 117— 118.) In short, the complaint alleges with great specificity that Assa Corp. served as an investment manager and straw owner for Bank Melli, which is owned by the Iranian government. The complaint alleges that the Foundation “has been providing numerous services to the Iranian Government ... including managing a commercial building for the Iranian Government, running a charitable organization for the Iranian Government, and transferring funds from 650 Fifth Avenue Company to Bank Melli.” (Compl. ¶22.) The management services in particular appear to have involved, at a minimum, collecting rent, contracting with management companies, entering into leases, and paying taxes and other expenses. The complaint also alleges that the Foundation concealed the Iranian government’s ownership of the Building from judgment creditors, both by in effect serving as a straw owner of the Building and by making false statements in judicial proceedings and to government authorities. (Compl. ¶¶ 101-108.) The Partnership and the Foundation argue that these allegations do not state a claim that the Foundation provided “services” in violation of the ITRs because “[t]he complaint does not allege that the Foundation or any of its officers were paid anything for participating in the Foundation’s and the Fifth Avenue Company’s legal defense” and instead “alleges that these activities were done to protect Claimants’ own interests, not those of Iran or others.” (Foundation Reply, at 12.) Judge Keenan rejected precisely that argument in a recent case, United States v. Banki 733 F.Supp.2d 404 (S.D.N.Y.2010), which involved a hawala, a system in which persons desiring to send funds to Iran deposited the funds in an American network of accounts whose operator instructed Iranian institutions to distribute corresponding funds. In Banki the defendant argued that he did not violate the IEEPA because his “service” was “an act of generosity and friendship.” Id. at 416. Judge Keenan found that “the dictionary definition of a service” was “an act of assistance for another.... It is not the motivation behind the transaction that the IEEPA intends to regulate, but the transaction itself.” Id. Judge Keenan read the Second Circuit’s reference to “a fee” in Homa “not as case law introducing the receipt of fees as an element of the IEE-PA offense, but as general guidance on the law.” Id. at 417. Since Homa “affirmed an IEEPA conviction in a trial in which Judge Griesa did not explicitly instruct the jury about fees”, Judge Keenan held that the Second Circuit “did not intend to restrict the application of the IEEPA such that money transferring services a defendant provides for financial gain other than fees would be permissible despite the Embargo.” Id. The Court agrees that nothing in the ITRs suggests that OFAC or Congress intended to limit the reach of IEEPA to services provided for financial gain. Indeed, if “services” only applied to fee-earning services, OFAC would have had no reason to exempt “donations by United States persons of articles, such as food, clothing, and medicine, intended to be used to relieve human suffering.” 31 C.F.R. § 560.210(b). Moreover, it seems highly unlikely that OFAC executed its rule-making authority in response to President Clinton’s finding “that the actions and policies of the Government of Iran constitute an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States” by making an exception for persons acting out of an affinity for the nation creating the threat. Where the text and purpose of the statute so strongly suggest that it would make no sense to interpret “services” to exclude the alleged activities here, there is no need to apply the rule of lenity, for that is a doctrine “of last resort, to be used only after the traditional means of interpreting authoritative texts have failed to dispel any ambiguities.” Ruiz-Almanzar v. Ridge, 485 F.3d 193, 199 (2d Cir.2007). Cf id. (“We apply the rule of lenity only when none of the other canons of statutory construction is capable of resolving the statute’s meaning....”). The Assa Claimants argue that, under the IEEPA, forfeiture of property on the mere ground that a foreign state owns it can occur only “when the United States is engaged in armed hostilities or has been attacked by a foreign country or foreign nationals.” 50 U.S.C. § 1702(a)(1)(C). The Assa Claimants therefore contend that the alleged services “involve activities that are purely incident to ownership of the Building” and that “[i]f the Executive Branch had sought to make it illegal for the Government of Iran to own property in the United States, it surely would have done so with language more direct than a prohibition on ‘supply of services’ to Iran.” (Assa Reply 1-3.) Perhaps so, but it does not follow from the fact that it is legal for the Iranian government to own property in the United States that it is legal to serve as a commercial real estate manager for property that one knows is secretly owned by the Iranian government. The ITRs contain no explicit exception for services incidental to Iranian government-owned property. The ITRs do, however, contain an exception for “[a]ll transactions ordinarily incident to ... the provision of goods or services in the United States to[ ] the missions of the Government of Iran to international organizations in the United States” or “to the Iranian Interests Section of the Embassy of Pakistan” or employees thereof. 31 C.F.R. § 560.512. Accordingly, it would seem that OFAC knew how to create an exception for “incidental” services but chose to limit that exception to services incident to official Iranian diplomatic business in which none of the claimants purports to be engaged. Against that background, applying the prohibition on supplying “services” to Iran to include management of Iranian government-owned property or investments makes sense. “The obvious purpose of the [Executive Order authorizing the ITRs] is to isolate Iran from trade with the United States.” United States v. Ehsan, 163 F.3d 855, 859 (4th Cir.1998). OF AC may well have concluded that, on the one hand, prohibiting the Iranian government from owning any property in the United States or utilizing services incidental to its participation in international organizations would severely intrude on Iran’s exercise of traditional sovereignty but, on the other, that the United States could at least require Iran to brave the consequences of its policies by owning outright, in its own name and without assistance, any for-profit commercial real estate. And, given that several Presidents had declared Iran a national security threat, it would not be speculation to say that OF AC could have reasonably believed that tenants would be less apt to send a check to “650 Fifth Avenue Company” than to “The Government of Iran.” Yet the complaint alleges that the claimants’ actions enabled the Iranian government to avoid the consequences of any ignominy in the minds of Americans from the actions that caused two Presidents to declare Iran a threat to the national security of their country and to authorize the ITRs. The complaint therefore adequately alleges that the claimants supplied “services” to Iran in violation of the ITRs and the IEE-PA. 3. “Constitutes or is Derived from Proceeds” Section 981(a)(1)(C) does not permit forfeiture of all the assets of one who provides “services to Iran or the Government of Iran.” Rather, the statute provides for forfeiture of “[a]ny property, real or personal, which constitutes or is derived from proceeds traceable to a violation.... ” 18 U.S.C. § 981(a)(1)(C) (emphasis added). The next question, then, and the heart of this ease, is whether the properties the government seeks to forfeit are property “which constitutes or is derived from proceeds” of the Foundation’s and Assa Corp.’s alleged “services to Iran or the Government of Iran.” In general “[pjroceeds are property that a person would not have but for the criminal offense.... ” United States v. Grant, No. S4 05 Cr 1192, 2008 WL 4376365, at *2 n. 1 (S.D.N.Y. Sept. 25, 2008); see also United States v. Nicolo, 597 F.Supp.2d 342, 350 (W.D.N.Y.2009). Cf United States v. Porcelli, 865 F.2d 1352, 1366 (2d Cir.1989) (applying RICO forfeiture statute); United States v. Ofchinick, 883 F.2d 1172, 1183 (3d Cir.1989) (same); United States v. Angiulo, 897 F.2d 1169, 1213 (1st Cir.1990) (same); United States v. Horak, 833 F.2d 1235, 1243 (7th Cir.1987) (same). However, the “but for” test is insufficiently specific because it does not appear in the statute itself and claimants raise objections to forfeiture based on the statutory definition of “proceeds.” Accordingly, while the “but for” test provides general guidance, the Court must decide which one of two definitions of proceeds applies. Section 981 defines “proceeds” in the following bifurcated way: (A) In cases involving illegal goods, illegal services, unlawful activities, and telemarketing and health care fraud schemes, the term “proceeds” means property of any kind obtained directly or indirectly, as the result of the commission of the offense giving rise to forfeiture, and any property traceable thereto, and is not limited to the net gain or profit realized from the offense. (B) In cases involving lawful goods or lawful services that are sold or provided in an illegal manner, the term “proceeds” means the amount of money acquired through the illegal transactions resulting in the forfeiture, less the direct costs incurred in providing the goods or services. 18 U.S.C. § 981(a)(2)(A)-(B). The government contends that the first gross proceeds definition applies because an IEEPA violation is a “specified unlawful activity.” (Gov’t Opp’n at 42 n. 17.) The Assa Claimants counter that the net proceeds definition applies because the gross proceeds section refers to “unlawful activities” rather than “specified unlawful activities.” (See Assa Reply at 7-8.). Two courts in this district have addressed this issue. The court in United States v. All Funds on Deposit in United Bank of Switzerland, 188 F.Supp.2d 407 (S.D.N.Y.2002) determined that the gross proceeds definition applied regardless of whether “forbidden currency transfers to Iran” were “illegal services” or “lawful services that are sold or provided in an illegal manner” because the currency transfers were “specified unlawful activities” as defined in 18 U.S.C. § 1956(c)(7) and therefore were also “unlawful activities” under 18 U.S.C. § 981(a)(2)(A). 188 F.Supp.2d at 409. However, the court in United States v. Kalish, No. 06 Cr. 656, 2009 WL 130215 (S.D.N.Y. Jan. 13, 2009) (Patterson, J.) rejected that reasoning on the ground that if, by the term “unlawful activities” in the proceeds definition Section 981, “Congress had meant ‘specified unlawful activity,’ a defined term in the money laundering statute, it would have used that precise term — as it did in section 981(a)(1)(C)— instead of the looser term ‘unlawful activities’ used in section 981(a)(2)(A).” Id. at *7. Cf United States v. Nacchio, 573 F.3d 1062, 1088-1089 (10th Cir.2009) (finding Kalish more persuasive than All Funds). The Court agrees that the term “unlawful activities” does not include every “specified unlawful activity.” In addition to the fact that Congress decided to use two separate terms in the same statute, Section 981 provides another textual clue. Section 981(a)(2)(A) refers to “cases involving illegal goods, illegal services, unlawful activities, and telemarketing and health care fraud schemes.” However, 18 U.S.C. § 1956(c)(7) defines “specified unlawful activity” to include “any act or activity constituting an offense involving a Federal health care offense.” 18 U.S.C. § 1956(c)(7)(F). Since it seems highly unlikely that at least some “health care fraud schemes” would not also be “Federal health care offense[s]”, interpreting “unlawful activities” to include every “specified unlawful activity” would render the phrase “health care fraud schemes” superfluous. The Court must interpret the statute to avoid that result. See Garciar-Villeda v. Mukasey, 531 F.3d 141, 147 (2d Cir.2008) (“There is a presumption against construing a statute as containing superfluous or meaningless words or giving it a construction that would render it ineffective.”). Since the alleged IEEPA violations here are not “unlawful activities,” the Court must decide whether they are “illegal services” or “lawful services that are sold or provided in an illegal manner.” Transferring funds, managing business affairs and real estate investments, and running a charitable organization are normally legal activities; they are only alleged to be illegal here because they were performed for the Iranian government. The Court therefore finds that those services are “lawful services that are sold or provided in an illegal manner.” 18 U.S.C. § 981(a)(2)(B). Accordingly, for those services, “the term ‘proceeds’ me