Turkey’s Halkbank pleads not guilty to huge sanctions violations

Turkey’s state-run Halkbank has pleaded not guilty to charges of running a huge money-laundering scheme that violated United States sanctions on Iran, Courthouse News Service said. 

“Halkbank pleads not guilty on all counts of the indictment,” said Robert Cary, an attorney for the bank, during a hearing on Tuesday that was presided over by Manhattan District Judge Richard Berman and which took place by teleconference due to coronavirus containment measures.

Halkbank stands accused of laundering up to $20 billion on behalf of Iranian entities, bank fraud charges, and concealing the nature of these illicit transactions from U.S. officials.

Halkbank has been the subject of several trials that have implicated the Turkish government in billions of dollars of trade that allegedly violated U.S. sanctions on Iran. Turkey’s government denies complicity in the scheme.

In February, Halkbank agreed to appear in the Manhattan federal court for arraignment after refusing for months to face the Southern District of New York court since being indicted on Oct. 15, 2019 for what is considered the largest sanction-violations case to date.

Berman granted Halkbank a 70-day adjournment, after Cary said he would be required to visit his clients in Turkey in person, which would not be possible at the moment due to restrictions on air travel due to the coronavirus.

A follow-up conference has been set for June 9, which Berman said could be done by video-feed if the courts remained closed.

In the indictment, Halkbank’s senior managers were accused of systematic participation in the illicit movement of billions of dollars’ worth of Iranian oil revenue that was designed and executed by senior bank officials.

Reza Zarrab, a Turkish-Iranian gold trader, was arrested for spearheading this scheme on March 19, 2016. Zarrab agreed to cooperate with U.S. prosecutors in exchange for leniency which led to the indictment and arrest of Halkbank executive Mehmet Hakan Attila in March 2017, and the indictment of Turkish former Economy Minister Zafer Çağlayan.

Attila was convicted and sentenced to 32 months in prison, but was released in July 2019 for time already served in detention. He returned to Istanbul that same month and was later named head of the Istanbul Stock Exchange by Finance Minister Berat Albayrak, who is also the son-in-law of President Recep Tayyip Erdoğan.