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Iranian Released in Prisoner Exchange Finds Fault With Its Handling

Nader Modanlo at his apartment in Bethesda, Md. He was one of seven people freed by the United States in the Jan. 16 prisoner exchange with Iran.Credit...Drew Angerer for The New York Times

Sitting in a federal prison, the Iranian-American former aerospace executive felt optimistic after years of frustration and despondency. His lawyers had filed what they regarded as a strong appeal, and he had reason to believe that his 2013 conviction, on illicit business dealings with Iran, might soon be reversed.

The former executive, Nader Modanlo, was one of seven people released by the United States this month in a high-profile prisoner exchange deal with Iran, but he is hardly celebrating. The price of freedom was to abandon his appeal and keep the felony conviction on his record, an agonizing choice for a man who says he did not break any laws.

Mr. Modanlo, 55, said in an interview that he was shocked when he learned of the proposed deal on Jan. 14, and was given only two hours to decide whether to accept it. He angrily rejected the terms, and the deadline passed, starting what would become a two-day frenzy of phone calls from prison involving his lawyers, relatives, the Justice Department and Iranian consular officials.

The pressure on him was intense. Hours before he made a decision, Iranian news services leaked details of the deal, and Obama administration officials briefed reporters about it.

He eventually signed on and was able to reunite with his family in the Maryland suburbs of Washington, where he has lived for many years. But the conviction he had been vigorously contesting, for brokering a deal to help Iran launch its first communications satellite into space on a Russian rocket, almost certainly means he will never again be able to work in the aerospace business: his ambition since his childhood in Iran, when he watched American astronauts walk on the moon.

“I would have preferred to get the outcome of the appeal,” he said. “That was a chance I was willing to take.”

The Jan. 16 prisoner exchange — in which Iran freed five Americans, four of them dual citizens — accompanied the implementation of a landmark agreement between six world powers and Iran to limit its nuclear program.

For many Americans, the prisoner deal was all about the happy endings for those who had been imprisoned in Iran, some for years, on vague charges of spying or other hostile acts: among them Amir Hekmati, a Marine veteran from Michigan held since August 2011, and Jason Rezaian, The Washington Post’s Tehran correspondent, held since July 2014.

But the prisoners released in the United States — all but one dual nationals as well — went through less-publicized traumas. Some, like Mr. Modanlo, saw themselves as unfairly prosecuted pawns in the hostilities between Iran and the United States, and felt they were manipulated again as part of the countries’ new détente.

“They were eager to expose big cases, and I was the ultimate big case,” said Mr. Modanlo, who regarded the entire prosecution as politically motivated because of his Iranian heritage.

Mr. Modanlo’s punishment was among the most severe in any criminal case arising from American economic prohibitions on doing business with Iran. It was also one of the biggest and most complex white-collar prosecutions ever pursued in Maryland.

Asked about Mr. Modanlo’s case, Rod J. Rosenstein, the United States attorney for Maryland, said in a statement that publicly disclosed evidence had proved his guilt “beyond any reasonable doubt.” He would not address questions relating to the terms of Mr. Modanlo’s release.

Mr. Modanlo was once a prominent NASA contractor with an international business worth $500 million and a home in Potomac, Md., an affluent Washington suburb. He came to the United States in 1979 to study engineering at George Washington University, and met his wife in college. They had two children, now 24 and 21, and he got into the satellite industry in the early 1990s.

A target of government investigations stretching back more than a decade, he was accused of hiding his dealings with Iran through intermediaries. He lost his business and home, which he had to mortgage and remortgage multiple times to help pay legal bills and other expenses that he estimated were in the millions of dollars.

Whether his reluctance to take the commuted sentence offered by the prisoner deal threatened the entire agreement remains unclear. Justice Department officials declined to comment on the terms or on why the government had exerted such pressure on Mr. Modanlo to accept.

But for Mr. Modanlo, whose soft-spoken English is laced with legalese, the idea of waiving his right to pursue vindication in court was especially difficult. His lawyers had filed an appeal last year that alleged a pattern of prosecutorial actions that had denied him a fair trial.

They presented evidence of dozens of secret communications between the prosecutors and judge, known as ex parte contacts, that had never been disclosed to the defense. They also cited witness testimony possessed by prosecutors that supported Mr. Modanlo but was not turned over until after the trial had begun.

During oral arguments in October, a three-member panel of federal appellate judges, not known for favoring defendants in criminal trials, criticized prosecutor conduct in the case. One, Judge Andre M. Davis, suggested the government should apologize.

The defense lawyers thought the criticism might portend a reversal and a reprimand for the government, which had trumpeted Mr. Modanlo’s conviction more than two years ago as a triumph of white-collar criminal prosecutions.

“For those judges to take the government to task in the way they did speaks volumes,” said Kobie Flowers, a Washington trial lawyer who helped represent Mr. Modanlo in the early stages of the prosecution. “When I hear that it was very difficult for Nader to accept the clemency deal, I get it.”

Mr. Rosenstein, the lead federal prosecutor on the case, said in his statement that the appeal had “alleged minor mistakes in the context of a complex six-week trial.”

Kelly B. Kramer, a defense lawyer who helped represent Mr. Modanlo in the appeal, rejected that assessment. “In criminal cases, the rule is pretty simple: A prosecutor isn’t allowed to have secret communications with the court,” he said. “But in Mr. Modanlo’s case, that’s exactly what happened, not just once or twice, but over and over again.”

It was clear to Mr. Modanlo when the option of a commuted sentence was presented to him on Jan. 14 at the federal prison in Petersburg, Va., that Justice Department officials wanted him to say yes immediately.

“They said, ‘Take it or leave it.’ I said, ‘O.K., that’s easy, I leave it.’ Then they got upset,” Mr. Modanlo said. “I said: ‘I’ve got to call my family members. This decision is significant.’ ”

In what Mr. Modanlo and his lawyers described as an extraordinary step, the Justice Department’s Federal Bureau of Prisons then gave him unlimited, unmonitored telephone access to consult with relatives in both the United States and Iran. Normally, prison phone calls must be scheduled days or weeks in advance.

The government also agreed to drop part of his punishment: a $10 million claim on his assets, the amount prosecutors said Iran had paid him to help broker the satellite launch in 2005. But he had to drop the appeal and can never profit — by selling his story, for example — from his prosecution and conviction.

It was only after multiple phone conversations with his wife, his sister in Iran and an Iranian consular official in the United States that he reluctantly changed his mind.

The conversations with his sister, who had been publicizing his case in Iran and had written to President Obama last summer imploring him to intervene, were especially emotional, Mr. Modanlo said.

“She started crying. She supported me and my family. She put aside her own family,” he said. “She said she wants to see me, she needs me, she cries for me every day because my liberty has been taken away. She said, ‘Take the deal.’ ”

Between 3 p.m. and 4 p.m. on Saturday, Jan. 16, he said, he did just that. Early Sunday morning, after American officials confirmed that the prisoners released in Iran had departed the country, prison officials in Petersburg got the final orders to let Mr. Modanlo out.

His wife, alerted by Mr. Modanlo’s lawyers to his release, was already at the prison, about a two-hour drive from their home in Bethesda, Md. It was all so abrupt that he had nothing to wear, so prison officials found some civilian clothes.

“They gave me a white T-shirt, a pair of jeans, and my wife brought me a jacket,” he said, recalling how he shook hands with prison officials who had basically been awake since Thursday, when the drama began. “They were in the nicest mood I’ve ever seen.”

A correction was made on 
Jan. 27, 2016

An earlier version of this article incompletely described the circumstances under which the prisoner-exchange deal was publicized in relation to Nader Modanlo’s agreeing to be part of it. The Obama administration did brief reporters about the deal hours before Mr. Modanlo signed on, but the briefing came after Iranian news agencies had published news about the agreement.

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A version of this article appears in print on  , Section A, Page 11 of the New York edition with the headline: One Iranian Released in Prisoner Exchange Isn’t Celebrating. Order Reprints | Today’s Paper | Subscribe

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