US appeals court sides with terror victims in fight over blocked Iranian assets

A US federal appeals court has ruled that victims of Iran-backed terrorism can seize nearly $10 million in blocked Iranian funds to collect on court-awarded damages, in what attorneys for both appellants described as ‘game changing’ and a major victory for victims.

The ruling by the US Court of Appeals for the District of Columbia Circuit overturned a lower court decision that had blocked two groups of plaintiffs from claiming the funds. The Owens plaintiffs are owed almost $1 billion arising from Al Qaeda’s 1998 bombings of US embassies in Kenya and Tanzania, while the Levin plaintiffs are owed approximately $15 million from the 1984 kidnapping and torture of Jeremy Levin by Hezbollah.

Both groups sought court orders to seize the Iranian money to help pay off what they are owed under their judgments against Iran—a legal process known as ‘attachment in aid of execution’.

The funds at issue surfaced after Taif Mining Services, identified as a front company for Iran’s Revolutionary Guard Corps, attempted to wire $9.98 million through Wells Fargo in New York. The Office of Foreign Assets Control (‘OFAC’) blocked the transfer under the International Emergency Economic Powers Act (‘IEEPA’), and the government subsequently initiated civil forfeiture proceedings to confiscate the money.

‘The two separate appellate unanimous rulings in Levin v Wells Fargo, twice reversing the district court for dismissing the Levins’ claims, are game changing for victims beyond the Levins’ judgment itself,’ said Suzelle M Smith, who argued for the Estate of Jeremy Isadore Levin, et al. ‘Potentially hundreds of millions of dollars in frozen assets of terrorists which have been held by banks for decades have been made available to all victims by the rulings of DC Circuit,’ she told WorldECR‘s sister publication Risk Journal. 

Writing for the three-judge panel, Circuit Judge Katsas held that the funds qualified as ‘blocked assets’ under section 201 of the Terrorism Risk Insurance Act (‘TRIA’) of 2002, which makes such assets available for terror victims to seize in order to satisfy judgments against designated state sponsors of terrorism.

‘The Funds remain “frozen” and thus “blocked”,’ Katsas wrote, rejecting the government’s argument that an OFAC licence authorising forfeiture proceedings had unfrozen the assets and made them ineligible for attachment under TRIA.

The court found that the licence, which only permitted the government to pursue forfeiture and Wells Fargo to transfer the funds if a valid forfeiture order was obtained, did not actually unfreeze the money because all other dealings remained prohibited.

‘In both ordinary and legal parlance, an asset is frozen if it is difficult to convert into cash,’ the opinion stated, noting that TRIA’s licence exception applies only when a licence is required by a statute ‘other than’ IEEPA.

The government had argued that allowing individual victims to attach blocked assets would disrupt the United States Victims of State Sponsored Terrorism Fund, which is financed primarily through proceeds from enforcement actions including forfeitures of blocked assets and distributes compensation to eligible applicants on a pro rata basis.

While acknowledging ‘the force of this argument as a policy matter’, the court said Congress did not expressly modify TRIA when it created the Victims Fund and courts ‘may not assume it did so impliedly’. The opinion concluded, ‘Any anomaly in the interaction between the Victims Fund and TRIA is a problem for Congress, not the judiciary’.

‘The DC Circuit’s decision clears the way for victims of terrorism to attach blocked assets of state sponsors of terrorism to their judgments against those terrorist states, as Congress directed in TRIA,’ said Jessica L Wagner, who argued for appellants James Owens, et al. ‘This is a major victory for victims of terrorism.’ 

Wells Fargo declined to comment and the Department of Justice said it had no comment.

https://media.cadc.uscourts.gov/opinions/docs/2025/09/23-7080-2137191.pdf