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Capturing three suspicious men carrying $600,000 at a checkpoint in the early days of the Iraq war might have seemed relatively simple to the Australian Special Air Service soldiers, who had been in the country for three weeks fighting Saddam Hussein's troops. But now the incident on the road from Baghdad to the Jordanian border on April 11, 2003, could bog the special forces in an ugly row. In August, international law expert Marc Henzelin filed a $1.5-million claim for compensation with the U.S. military for the alleged torture of two Iranian nationals, the suspected murder of a third Iranian and the theft of $360,000 by U.S. forces in Iraq.

The claim hinges on what happened after Australian SAS soldiers captured the three Iranians carrying a large sum of money on Highway 10. The Switzerland-based lawyer alleges the three men were from the People's Mujahideen Organisation of Iran, an Iranian opposition group which had significant military bases in Iraq, but was not fighting against the invading U.S.-led coalition forces. Henzelin says the problems arose when Australian soldiers handed the Iranians - and the money - to U.S. forces. In his claim, Henzelin alleges the Iranians were then subjected to interrogation and torture despite being members of a group which did not believe it was at war with the U.S.

Two Iranians were eventually released. But a third man has not been seen since. Henzelin believes he may have died as a result of his treatment in custody. Henzelin also alleges the U.S. military told the Iranians that only $600,000 had been seized - the Iranians say it was $960,000 - during their capture and would remain in U.S. hands.

Australia's Defence Department has denied the SAS had any role in torture or theft. But Defence Minister Robert Hill has already played a part in assisting the claim's progress. Henzelin says when he first approached the U.S. about the matter, it refused to say whether the incident had even occurred. After obtaining confirmation of the men's capture - in the form of a letter from Senator Hill - Henzelin was finally able to get some acknowledgment by the Americans. "If it wasn't for (Hill's) letter we would not have the evidence for the claim,'' Henzelin told Time. "We are not saying the Australians had anything to do with the torture or disappearance of the third man."

As for the missing cash, Henzelin, like the authorities, is in the dark. So where did the money go? - By Rory Callinan

• Rory Callinan
• Capturing three suspicious men carrying $600,000 at a checkpoint in the early days of the Iraq war might have seemed relatively simple to the Australian Special Air Service soldiers