October 2, 2020
A U.S. judge on Thursday refused to dismiss an indictment accusing state-owned Turkish lender Halkbank HALKB.IS of helping Iran evade American sanctions.
U.S. District Judge Richard Berman in Manhattan rejected Halkbank’s claim that the Foreign Sovereign Immunities Act shielded it from prosecution, saying that law did not appear to grant immunity in criminal proceedings.
He also said an exception for commercial activity “would clearly apply and support the Halkbank prosecution,” citing the bank’s interactions with U.S. Treasury Department officials and its alleged laundering of more than $1 billion through the U.S. financial system.
U.S.-based lawyers for Halkbank did not immediately respond to requests for comment. The Department of Justice did not immediately respond to similar requests.
Halkbank has pleaded not guilty to bank fraud, money laundering and conspiracy charges brought last October.
U.S. prosecutors accused Halkbank of using money servicers and front companies in Iran, Turkey and the United Arab Emirates to evade sanctions, enabling oil and gas revenue to be spent on gold and facilitating sham food and medicine purchases.
They also accused Halkbank of helping Iran secretly transfer $20 billion of otherwise restricted funds, including the $1 billion through U.S. accounts.
A trial is scheduled for March 1, 2021.
Halkbank has separately asked the federal appeals court in Manhattan to replace Berman with a different judge because of his alleged bias, an accusation Berman has denied.
Berman has overseen several related cases, including the 2018 conviction of former Halkbank executive Mehmet Hakan Atilla and a guilty plea by Reza Zarrab, a wealthy Turkish-Iranian gold trader who testified against Atilla.
Halkbank’s case has added tension to U.S.-Turkish relations, and gained renewed attention in former U.S. national security adviser John Bolton’s recent memoir.
Bolton wrote that Turkish President Tayyip Erdogan in 2018 gave U.S. President Donald Trump a memo saying Halkbank was innocent, and Trump said the problem would be “fixed” once prosecutors were replaced.
The case is U.S. v Halkbank, U.S. District Court, Southern District of New York, No. 15-cr-00867.