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Thu 28 Jan 2016 11:12 AM

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White House dropped $10m claim in Iran prisoner deal

The surrender of the US claim could add to scrutiny of how the Obama administration clinched a prisoner deal that has drawn criticism from Republican presidential candidates and lawmakers

White House dropped $10m claim in Iran prisoner deal
U.S. President Barack Obama delivers a statement on the relations between US and Iran, including the release of the US hostages that were held in Iran, in the cabinet room of the White House. (Getty Images)

Nader Modanlo was facing five more years in federal prison when he got an extraordinary offer: US President Barack Obama was ready to commute his sentence as part of this month’s historic and then still-secret prisoner swap with Iran. He said no.

To sweeten the deal, the US 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 US officials with knowledge of the matter.

The surrender of the US 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 telecoms deal.

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, January 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 US government. All but one had been accused of violating the economic sanctions the United States has enforced against Iran for decades.

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