The US government secretly airlifted $400 million in cash to Iran simultaneously with the release of four Iranian-American prisoners in January, the Wall Street Journal reported on Tuesday.
Obama administration officials denied any link between the two exchanges.
Transactions with Iran in US dollars is still against the law, so the equivalent value was flown into Iran in euros, Swiss francs, and other currencies from banks in Switzerland and the Netherlands on January 17. The cash, stacked on wooden pallets, was delivered by unmarked cargo plane in a secret operation.
On the same day, four American prisoners of Iranian descent, one a Marine veteran, were released from jail and allowed to leave Iran.
The payment was the first installment of a $1.7 billion settlement which the Obama administration agreed to give Iran in order to balance a decades-old debt for a 1979 arms deal between the US government and the former Shah, whose overthrow mired Iran in political upheaval and revolution soon after the deal was made. The US arms were never delivered.
While senior US officials told the Wall Street Journal that the payment and the prisoner exchange were purely coincidental, the Iranian press has portrayed the cash as ransom for the prisoners.
The exchanges also took place as the Iranian nuclear deal between Iran and world powers went into effect, lifting sanctions on the totalitarian-ruled country and allowing flows of international cash to enter. Opponents of the deal say that Iran will use the money to fund terrorism and build up its military and nuclear facilities.