US sent $400 million to Iran as it freed four US prisoners: Report

State Department has strongly refuted any link between payment of the settlement amount and release of the prisoners

The US secretly organised an "airlift of $400 million" in hard cash to Iran that coincided with the release of four Americans detained in Tehran, according to a media report.

The transfer was as part of the first instalment of a $1.7 billion settlement to resolve a decades-old dispute over a failed arms deal, 'The Wall Street Journal' reported.

The State Department has strongly refuted any link between payment of the settlement amount and release of four American prisoners by Iran.

"As we've made clear, the negotiations over the settlement of an outstanding claim were completely separate from the discussions about returning our American citizens home," State Department spokesman John Kirby said.

"Not only were the two negotiations separate, they were conducted by different teams on each side, including, in the case of The Hague claims, by technical experts involved in these negotiations for many years," Kirby said.

The money was procured from the central banks of the Netherlands and Switzerland, the report said.

"Wooden pallets stacked with euros, Swiss francs and other currencies were flown into Iran on an unmarked cargo plane," officials were quoted as saying.

The amount was part of the first instalment of a $1.7 billion settlement that the Obama Administration reached with Iran to resolve the decades-old dispute over a failed arms deal, which was signed before the fall of Iran's last monarch Shah Mohammad Reza Pahlavi in 1979, the report said.

Senator Mark Kirk from Illinois alleged that the amount was ransom money.

"We were right in January 2016 to describe the administration's $1.7 billion transfer to Iran as a ransom payment. Paying ransom to kidnappers put Americans even more at risk," Kirk said.

"While Americans were relieved by Iran's overdue release of illegally imprisoned American hostages, the White House's policy of appeasement has led Iran to illegally seize more American hostages, including Siamak Namazi, his father Baquer Namazi, and Reza Shahini," Kirk said.