Convicted banker exposed Turkish government’s inconsistency in Halkbank case


Levent Kenez/Stockholm

Following a meeting with his counterpart, US Secretary of State Antony Blinken, on Wednesday, Turkish Foreign Minister Mevlüt Çavuşoğlu said he had conveyed Turkey’s expectations regarding the case of the public company Halkbank, accused of having escaped US sanctions against Iran. Describing the case as political, Çavuşoğlu argued that Halkbank enjoyed immunity from prosecution in the United States because it was a state-owned bank.

However, Hakan Atilla, the former deputy chief executive of Halkbank who was convicted of conspiring to violate US sanctions on Iran in a Manhattan federal court in 2018, had earlier said in a statement that the Turkish ministry of Foreign Affairs had rejected the idea that Halkbank enjoyed immunity and did not even speak about it officially at the time despite the insistence of his lawyers and his family.

Text of Atilla’s rebuttal of the government.

Atilla first revealed important information about his trial in a written statement he sent to the pro-government daily Sabah, which had brought charges against him. Atilla, who was accused of failing to assert immunity from Halkbank during his trial, said he, his family and his lawyers have repeatedly requested that the Turkish Embassy in Washington, D.C. US authorities that he was a government official and therefore had immunity. He also added that recordings of his requests are available.

The Turkish Foreign Ministry sent a diplomatic note to the United States regarding the prosecution of Atilla in 2018 but did not address the issue of immunity. Atilla’s lawyers shared with the media in 2018 that they had let the Turkish embassy know that Atilla might be immune since he was a state official, and they asked the embassy to pursue him diplomatically, but the embassy did not take the request seriously.

Hakan Atilla (left) was greeted as a hero on his return to Turkey in 2019. Berat Albayrak (right), then economy minister and son-in-law of President Recep Tayyip Erdoğan, greeted him at the airport.

Atilla, who was sentenced to 32 months in prison after being tried by the US District Court for the Southern District of New York, returned to Turkey on July 23, 2019 from the United States, where he had been imprisoned for 28 months . He was greeted as a hero at Istanbul airport by Berat Albayrak, then Minister of Economy and son-in-law of Turkish President Recep Erdoğan. Atilla was then appointed to the prestigious position of director of the Istanbul Stock Exchange (Borsa Istanbul). Atilla unexpectedly announced his resignation on March 8, 2021. Turkish media reported that he was uncomfortable with some of the government’s demands. After Atilla’s resignation, allegations were made against him in the pro-government media, which had hitherto treated him as a hero. Atilla was accused of making revelations that harmed Turkey during his trial.

On October 23, 2021, a US court rejected an appeal by Turkish state-owned Halkbank, which had asked the court to block the lawsuit and argued that it had sovereign immunity under US law. The judges said the charges “fall within the commercial activity exception” of the Foreign Sovereign Immunities Act.

In 2019, U.S. federal prosecutors in the Southern District of New York charged Turkish state lender Halkbank (Türkiye Halk Bankası A.Ş.) with six counts, including fraud, money laundering and of offenses related to the bank’s participation in a multi-billion dollar scheme to evade US sanctions against Iran.

According to the indictment, Halkbank is charged with conspiracy to defraud the United States, conspiracy to violate the International Emergency Economic Powers Act (IEEPA), bank fraud, conspiracy to commit bank fraud, money laundering and conspiracy to commit money laundering.

Between 2012 and 2016, prosecutors alleged that Halkbank and its officers, agents and co-conspirators directly and indirectly used money services businesses and shell companies in Iran, Turkey, the United Arab Emirates and elsewhere to violate and circumvent and avoid bans on Iran’s access to the U.S. financial system, restrictions on the use of proceeds from Iranian oil and gas sales, and restrictions on the supply of gold to the Iranian government and Iranian entities and individuals .

Halkbank knowingly facilitated the scheme, participated in the design of fraudulent transactions intended to deceive US regulators and foreign banks, and lied to US regulators about Halkbank’s involvement, the indictment says.

US federal prosecutors previously charged nine individual defendants, including bank workers, Turkey’s former economy minister and other participants in the same scheme. On October 26, 2017, Reza Zarrab, the prime suspect in the case, pleaded guilty to all seven counts he was charged with. He became a government witness who confessed to bribing Turkish government officials.

On December 17, 2013, Turkish prosecutors released a corruption investigation in which Zarrab and then Prime Minister Erdoğan’s inner circle, including government ministers, were incriminated. Government officials and Halkbank executives have been accused of accepting bribes from Zarrab as part of a Halkbank-led sanctions evasion scheme to circumvent US sanctions on Iran . Erdoğan dismissed corruption allegations, fired prosecutors and police chiefs, and stifled corruption investigations. He also described the investigations as “a plot by the Gülen movement to overthrow the government” and launched a crackdown on the movement.

Halkbank’s 45-page indictment:

us_v._halkbank_indictment_0

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