Scheme to evade AML Compliance and CTF and sanctions rules lead to federal convictions for Turkish banker
In a trial that riveted the nation of Turkey, federal prosecutors in Manhattan last week achieved a conviction of a Turkish banker in what was described as a complex scheme to evade U.S. sanctions against Iran and fill Turkish coffers with billions in petrodollars.
The New York Times reported last week that Mehmet Hakan Atilla, the deputy general manager of international banking at the Turkish state bank Halkbank, was accused by federal prosecutors of being a “fixer” who “helped Iran circumvent the sanctions and gain access to billions of dollars of restricted petrodollar funds that were being held at the bank,” according to the Times.
Acting U.S. Attorney Joon H. Kim stated in a U.S. Justice Department statement on January 3, 2018 said that Atilla and other co-conspirators “blew a billion-dollar hole in the Iran sanctions regime…. Foreign banks and bankers have a choice: You can choose willfully to help Iran and other sanctioned nations evade U.S. law, or you can choose to be part of the international banking community transacting in U.S. dollars. But you can’t do both. If you lie repeatedly to U.S. Treasury officials and fabricate documents – all as part of a secret scheme to smuggle billions of dollars in Iranian oil money past the U.S. sanctions net – as Atilla did, then you should be prepared for the consequences. The consequence of Atilla’s choice is now a felony conviction in an American court of law.”
Co-defendant Reza Zarrab helped break open the case when he pleaded guilty and became a witness for the prosecution. Seven other individuals have been charged, but they remain at large.
In his testimony, Zarrab detailed an operation in which false documents, front companies, and bribes to bankers and government ministers resulted in sanctions evasions and profits for Turkey. Turkish president Recep Tayyip Erdogan has vehemently denied the accusations against the defendants, and he has painted the charges as a U.S. plot to discredit him and his government.
The Times reported that federal prosecutors in their closing argument zeroed in on the lies told by Atilla and the likely motivation: “ ’Why did Mr. Atilla tell all those lies?’ Michael D. Lockard, a federal prosecutor, said in a closing argument. ‘To help his bank, to help his bank’s customers — customers like Mr. Zarrab, customers like the government of Iran, the Central Bank of Iran, the National Iranian Oil Company. Lies that he told to keep his bank from being blacklisted from the American financial system.’ ”
Atilla was acquitted on the money laundering charge, but he was convicted of bank fraud; and he was convicted of conspiracies to violate sanctions against Iran, to defraud the United States, to commit bank fraud, and to commit money laundering.
Atilla will be sentenced on April 11. The bank fraud charge alone carries a maximum sentence of 30 years. Atilla’s lawyer has vowed to appeal the convictions.
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