U.S. court denies Halkbank's motion to dismiss

A U.S. judge denied a motion to dismiss an indictment against one of Turkey's largest public lenders on Thursday, which is accused of helping Iran evade American sanctions.

In a 16-page ruling, U.S. District Judge Richard Berman rejected the main argument by Halkbank that it was immune from prosecution in the United States as a bank belonging to a foreign country.

Two weeks ago, sides convened over a conference call to lay out their respective oral arguments over the criminal case. The defence said that the U.S. government failed to make the argument that a foreign government-owned lender would be prosecuted criminally by the U.S. prosecutors. 

Prosecutors accuse Halkbank of laundering up to $20 billion on behalf of Iranian entities, defrauding the U.S. government and hiding the scheme from the U.S. authorities. The same court in late 2017 and early 2018 successfully prosecuted the former top executive of the bank, Mehmet Hakan Atilla, while the mastermind of the sanctions-busting operation, Reza Zarrab, flipped to become a state witness and explain the whole mechanism at the court.

Zarrab, during the weeks-long trials, confessed that he bribed high-ranking Turkish officials, including cabinet ministers, to facilitate the oil-for-gold scheme in which Halkbank’s management was accused of intentionally aiding and managing.

On Oct. 15, 2019, the Southern District of New York indicted Halkbank with fraud, money laundering and sanctions offences related to the bank’s participation in the same multibillion-dollar scheme to evade Iran sanctions.   

Halkbank previously filed a motion in July to dismiss Berman as the judge overseeing the case over remarks made on the Dec. 2013 corruption cases in Turkey launched against President Recep Tayyip Erdoğan's family, friends and allies.

In a 25-page memo, Halkbank's lawyers accused Berman of bias for his earlier involvement in a 2014 conference in Istanbul, where the judge discussed Turkey’s rule of law and gave an interview to the now-defunct, Gülen-affiliated Zaman newspaper. Ankara maintains that it was the Gülen movement that orchestrated the coup attempt against Erdoğan's government in 2016. Berman dismissed the recusal motion.

Halkbank pleaded not guilty on all counts of the indictment. After the indictment was released in October 2019, the public lender had initially requested to pause proceedings while a motion to dismiss the case was being considered. Consequently, the court rejected the request for special representation. 

The trials have been rescheduled for March 2021 due to pandemic conditions.