U.S. District Judge Alison Nathan

A federal judge has ordered the Manhattan U.S. Attorney's Office to respond to allegations that prosecutors withheld exculpatory evidence from an Iranian businessman who was convicted of funneling more than $115 million through the American financial system in violation of U.S. economic sanctions.

In a four-page order, U.S. District Judge Alison J. Nathan of the Southern District of New York said Tuesday the case raised "serious concerns about the conduct of the government" toward defendant Ali Sadr Hashemi Nejad, an Iranian national who has been under criminal indictment for more than two years in an alleged money-laundering scheme he ran out of Venezuela.

A federal jury convicted Sadr on five counts in March, following a two-week trial that was complicated at the time by the burgeoning coronavirus pandemic. However, court filings, and Nathan's ruling, have revealed that the prosecution had been marred by alleged Brady violation accusations of wrongdoing by prosecutors.

U.S. Attorney Geoffrey Berman in a letter last week to the court acknowledged the spate of "discovery-related issues" before, during and after the trial, and moved to drop the charges via an order of nolle prosequi. Given the resources that it would take to address the problems, Berman said, the government had "determined that it would not be in the interests of justice to further prosecute this case."

But Sadr's Steptoe & Johnson attorneys have argued that the nolle pros motion was not the proper mechanism for finally putting the case to bed. Rather, they asked Nathan to completely set aside the verdict and dismiss the case with prejudice, a move Steptoe partner Reid Weingarten said would best protect his client from any further prosecution.

"We want a traditional ruling that declares this conviction null and void … and protects our client from any contingencies that may arise," Weingarten said Wednesday in an interview. "We want to protect our client to the best extent we can."

Sadr has maintained his innocence, and Weingarten described his client as an "adamant foe" of the Iranian government who was simply trying to keep his money out of the wrong hands.

In her ruling Tuesday, Nathan ordered prosecutors to respond to Sadr's motion, and outlined alleged efforts by prosecutors to conceal the late disclosure of evidence and mislead the court about it.

She also demanded "specific answers" to concerns that had been raised by the defense, as well as a full accounting of any material that may have been withheld. Nathan also ordered prosecutors to identify any government attorneys and supervisors responsible for supposedly not turning over evidence.

Disclosure violations can be considered a serious infringement of the rights of a criminal defendant and prosecutors can face misconduct allegations and possible sanctions for failing to meet their obligations under Brady.

A spokesman for the Manhattan U.S. Attorney's Office declined to comment on Nathan's ruling.

Sadr, meanwhile, remains free on bond following his conviction on March 16. Weingarten said that the trial at one point had to be moved to a different courtroom out of fear that the courtroom where it had previously been tried had become contaminated with the novel coronavirus.

A prosecutor and multiple members of the jury pool had also fallen ill, giving the defense the option between a mistrial or proceeding toward a verdict. The defense team, Weingarten said, had been "absolutely dismayed" when the jury returned a verdict of guilty on five counts.

Upon conviction, the government moved to detain Sadr immediately, but Nathan quickly rejected the request.

Bahram Karimi, a co-defendant charged alongside Sadr, has not yet been tried.

The case is captioned United States v. Ali Sadr Hashemi Nejad.

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