The tale of an airline: shady deals, Turkey’s Islamist split and a Mormon crime family
When Istanbul police detained renowned businesswoman Necla Zarakol over the defunct Turkish airline Borajet this week, it highlighted a series of shady deals by Sezgin Baran Korkmaz, a businessman close to the Turkish government, with links to brothers labelled a “Mormon crime family” who has even attracted the attention of U.S. Special Counsel Robert Mueller.
Police questioned and released Zarakol – a highly respected former journalist and leading name in Turkey’s communications sector – in relation to the allegedly fraudulent sale of Borajet in 2016. The story of the airline dates back to 2008 and touches both President Recep Tayyip Erdoğan and the outlawed Islamist Gülen movement, stretches as far as the United States, and Mueller’s investigation into alleged Russian interference in the 2016 U.S. presidential election.
Borajet entered Turkey’s aviation sector as a private shuttle service in 2008 with the purchase of a $58-million Bombardier Global Express business jet. The partners in the company, businessman İbrahim Faruk Bayındır and lawyer Halil İbrahim Koca, also purchased a hangar that had been seized by the Savings Deposit Insurance Fund of Turkey.
But the airline really took off when the pair got into business with Yalçın Ayaslı, a Turkish-American businessman and electrical engineer, whose investment turned Borajet into a regional airline in 2010. As Ayaslı tells it, he came into wealth suddenly thanks to one of the patents he owned, and chose to invest his windfall in his mother country.
Ayaslı reportedly went into business with Koca and Bayındır to take advantage of their links to the government and bureaucracy, and later bought out both partners to become sole owner of Borajet. But his association with the pair proved costly.
By the end of 2016, Bayındır and Koca were both on the run accused of belonging to the Gülen movement. Members of the Gülen movement, a secretive Islamist group with a worldwide network of schools and businesses, rose to prominent positions within the Turkish state in the decade after Erdoğan’s Justice and Development Party (AKP) came to power in 2002.
But a rift opened up between the two wings of Turkish Islamism that turned into open hostility in December 2013 when Gülenist prosecutors filed corruption charges against a number of AKP ministers and their relatives. The cases were dropped when the police and lawyers involved were themselves arrested.
In July 2016, officers linked to the Gülen movement sought to overthrow Erdoğan in a military coup, but were foiled when the president summoned the people onto the streets to face down the tanks. A fierce crackdown on the Gülenists that has also targeted opponents of all stripes soon followed.
Even though he had already bought out Bayındır and Koca, Ayaslı’s links with the fugitives came back to haunt him. As the pro-government press began to label Ayaslı a member of the Gülen movement, an accusation he firmly denies, the Turkish-American businessman sought a way out of Borajet.
In late 2016, he found a buyer; the businessman Korkmaz, a man known for his close links to the Turkish president. His name hit international headlines last year when he was linked to the Kingston brothers, Utah businessmen described in the U.S. press as a “Mormon crime family”, currently on trial in the United States for running a billion-dollar fraud scheme through their energy company Washakie Renewable.
Jacob and Isaiah Kingston face federal charges of fraud and money laundering for allegedly filing false tax credit applications for producing renewable biofuels. They were arrested last August while attempting to board a flight to Turkey, and when the judge overseeing their case denied their motions for release on Feb. 8, she noted they posed a flight risk due to the millions of dollars – at least $130 million – they had wired to Turkey through Korkmaz’s firm, SBK Holding.
Jacob Kingston’s holdings in Turkey include a mansion and a hotel in the tourist resort of Bodrum, reportedly worth $650 million.
The Kingstons’ business partner and co-defendant in the fraud trial, Lev Aslan Dermen, (also known as Levon Termendzhyan), was said to be the main financier in SBK Holding’s buyout of Borajet. While that deal was sealed in December 2016, Hürriyet newspaper reported that the idea for the deal came in September that year during the UN General Assembly in New York, with input from none other than Erdoğan himself.
One year later, Erdoğan was photographed meeting Jacob Kingston and Korkmaz in Turkey. Around the same time, U.S. Special Counsel Mueller subpoenaed Korkmaz for testimony. It remains unclear why Korkmaz became a figure in the Mueller investigation, but his company, SBK Holding, had sought business deals in Russia.
SBK’s takeover of Borajet was reported at the time to have cost the company $260 million. Aviation circles, however, said that just $25 million had changed hands, due to Borajet’s debts of $120 million.
On Tuesday, Ayaslı filed a 127-page lawsuit in New Hampshire, accusing Korkmaz of taking over his airline through a campaign of violence, extortion and financial crime, including threatening to rape and murder Ayasli’s female executive.
The case listed Ekim Alptekin, a former head of the American-Turkish Council business group, as a defendant along with others, including the Kingston brothers. All according to Ayaslı are members of a criminal organisation.
In an interview with pro-government daily Sabah in December 2017, Ayaslı insisted he had been forced to accept the deal and give up Borajet for nothing but a 25-percent share of profits from future sales under pressure from a media campaign that painted him as a Gülenist for his association with his former partners, Koca and Bayındır.
The businessman said Koca had been working from an office neighbouring his own in Istanbul when they first met. When they became business partners, Koca’s legal clients included the Istanbul Police Department, one of many organs of the state infiltrated by the Gülenists.
Ayaslı says Koca and Bayındır’s previous involvement with Borajet was used in a campaign to lower the airline’s market value in 2016. The second leg of the campaign against him, Ayaslı says, came in 2017, when a list of his properties in Turkey was published in the Turkish press.
The ongoing legal dispute over the sale of Borajet stems from Korkmaz’s claim that the airline’s debts and expenses were far higher than those documented when his company made the purchase in December 2016.
It was in the scope of the investigation launched after Korkmaz’s claim that Zarakol was taken in by the Istanbul organised crime squad on Monday, days after Zahide Ünal, known as a close associate of Ayaslı, was also arrested for alleged links to the Gülen movement.
Ayaslı has hit back at Korkmaz, insisting that Borajet’s value was clear when the deal was made and its finances had been subject to annual independent audits.
As for Korkmaz, the businessman has not hesitated to return fire at Ayaslı and the others under investigation – who he has implied are linked to the Gülen movement – but also to strike at journalists such as Hürriyet reporter Razi Canikligil, who suggested these accusations were part of a shakedown targeting Ayaslı.
Korkmaz himself has a chequered past, even leaving aside his association with the “Mormon crime family” from Utah. One report says five of the businessman’s factories burned down between 2010 and 2015, netting him 105 million lira in insurance claims. Another report published in the book “Metastaz” by journalists Barış Pehlivan and Barış Terkoğlu says his name was used in an attempt to extort money from a businessman from Ankara.
Korkmaz still has the advantage of close links to the Turkish government, and a sizeable pro-government press pool that fawningly reports his generosity: photographs of Korkmaz stepping off his luxury yacht in Bodrum to buy holidaymakers food and drinks made the rounds last August, the week the Kingston brothers were arrested.