Wednesday, October 28, 2020

Turkish bank Halkbank pleads not guilty to Iran sanctions violation

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A Turkish state-run bank pleaded not guilty Tuesday to allegations it funneled billions of dollars to Iran in violation of U.S. sanctions.

Officials representing Halkbank entered the plea during a teleconference arraignment with U.S. District Judge Richard Herman of the Southern District of New York.

The bank was indicted in October on six charges, including conspiracy, bank fraud and money laundering.

Prosecutors said the bank conspired to undermine U.S. sanctions against Tehran by illegally giving Iran access to billions while “deceiving U.S. regulators.”

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“This is one of the most serious Iran sanctions violations we have seen, and no business should profit from evading our laws or risking our national security,” Assistant Attorney General for National Security John Demers said at the time of the indictment.

The Justice Department said the scheme also involved Turkish government officials so the bank could use money service businesses and front companies in Iran and the United Arab Emirates to cover up proceeds from the sales of Iranian oil and gas.

In some cases, the indictment said, transactions were fraudulently designed to appear as food and medicine purchases — so they’d be allowed under a “humanitarian exception” in the sanctions.

Halkbank illegally transferred $20 billion worth of restricted Iranian funds, prosecutors said.

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The indictment stems from the arrest of a Turkish banker in 2016 for evading U.S. sanctions. The banker agreed to a deal with prosecutors to cooperate with investigators. Turkish President Recep Tayyip Erdogan subsequently asked both the Obama and Trump administrations, unsuccessfully, to drop the case.

In May 2018, a deputy manager for Halkbank, Mehmet Hakan Atilla, was sentenced to 32 months in prison for his role in the conspiracy to help Iran access billions of dollars of assets frozen by U.S. sanctions.

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