Turkish banker makes last bid to dismiss U.S. charges

Lawyers for a Turkish banker charged in the United States with aiding a sanctions-busting oil-for-gold scheme with Iran have demanded his case be detached from that against an Iranian gold dealer at the centre of the alleged plot which has helped widen a diplomatic rift between Washington and Ankara.

The motion submitted on Monday asserted that the prosecution had not stated a connection between Hakan Atilla, former deputy general manager of Turkish state-owned Halkbank, and Reza Zarrab’s alleged scheme to trade gold from Turkey for Iranian oil.

The U.S. refusal so far to extradite Muslim preacher Fethullah Gulen, the man Turkey says masterminded last year’s failed coup, Turkey’s arrest of U.S. consular staff and splits over Syria have also contributed to the tense diplomatic relations between NATO allies Turkey and the United States.

Turkish President Recep Tayyip Erdogan has made public calls for Atilla and Zarrab to be released from U.S. custody. He has also accused Preet Bharara, the former U.S. attorney for the Southern District of New York who brought the charges, and presiding Federal Judge Richard Berman, of having accepted the hospitality of Gulen, who lives in the U.S. state of Pennsylvania.

The motion submitted by Atilla’s attorney, Victor Rocco, said that "even if the government could theoretically apply some criminal aspect of the regime to Atilla’s conduct, he still cannot be prosecuted as a foreign national whose conduct occurred outside the US".

Zarrab is charged with four counts for managing a scheme to evade U.S. sanctions on Iran and has been in custody in the United States since he arrived in Miami for a vacation with his family in March, 2016. 

Prosecutors say Zarrab helped Iran evade U.S. sanctions imposed over its nuclear programme by paying for Iranian oil exports with gold shipped from Turkey, while Halkbank helped launder the proceeds.

Defendant: Prosecutor sets up a false dichotomy

Atilla's lawyers argued the U.S. government had set up a false dichotomy when it attempted to portray the sanctions regime as an all-or-nothing proposition "to deal with the United States on its terms or be prosecuted". According to the defence attorneys, this was a clear overreach of their authority and "no court ever thought it necessary before".

Atilla was arrested at New York’s JFK airport in March in connection with the investigation into Zarrab and the two cases were combined in April. The 40-page long indictment said Atilla was under FBI surveillance. According to the report prepared by FBI agent Jennifer A. McReynolds, Atilla was detained due to his activities between 2011 and 2015. Among these activities was the export of wheat from Dubai, UAE, a country that does not produce any wheat.

Rocco had applied to the court on Aug. 2 to dismiss the indictment against his client, or to separate the case from that against Zarrab, who has ties to members of the Turkish government.

According to the official Turkish police reports of their 2013 investigation, Atilla was very much in contact with Zarrab and was mentioned by name. Zarrab was arrested by Turkish police in 2013, but later released and the police who made the arrest and the prosecutors who ordered it were themselves detained and accused of acting on the orders of Gulen. 

Before his arrest, Atilla was responsible for Halkbank's international banking. 

The trial was due to have started in February 2017, but before the end of 2016, the defence requested more time to prepare their case and the proceedings were postponed to August and then October. 

At the beginning of September, New York South District expanded the scope of the case, putting Halkbank at the centre of the indictment and adding Zafer Çağlayan, former economy minister, to the charge sheet, accusing him of taking millions of dollars in bribes to cover up the scheme.

After these developments, defence lawyers once again requested additional time to go through the indictment. The final pre-trial hearing will now take place in New York on Sept. 25 and the trial is due to open before a grand jury on Nov. 27.

U.S. President Donald Trump has reportedly been personally interviewing candidates for the post of U.S. attorney for the Southern District of New York to take over from Joon H. Kim who has been acting attorney since Bharara was removed from the position in March.

Federal Judge Berman is expected to decide on Atilla's request shortly. 

Trial timetable

  • According to new time-table, the final date to submit name of witnesses, new evidence or suspects, is by Oct. 30.
  • The final date to object against witnesses, evidence or suspects, is Nov. 6.
  • Final conference before the trials with grand jury is Nov. 16.
  • Selection of grand jury members will be held on Nov. 20-21.
  • Start of the trial before the grand jury is set for Nov. 27.