Sunday, October 25, 2020

Turkish Halkbank wants U.S money laundering charges postponed to 2022


As President Donald Trump’s efforts to interfere with the remarkable money-laundering case come under scrutiny, Turkey’s state-run Halkbank asked a federal judge Tuesday to postpone trial for more than a year.

The bank’s attorney Robert Cary proposed a trial date sometime in March 2022.

“This appears to be a case where the vast majority of witnesses are overseas,” Cary said at a hearing this morning in Manhattan.

Though Cary blamed the coronavirus pandemic for complicating the investigation, prosecutors pushing for the much sooner trial date of February 2021 noted that they benefit from having tried and convicted former Halkbank manager Hakan Atilla more than two years ago.

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“This is not a case where we’re starting from scratch,” said Assistant U.S. Attorney Michael Lockard, who prosecuted the case against Atilla as well. “There has been a lot of opportunity for Halkbank to investigate and prepare already to date.”

Before and after its indictment last October, Halkbank has tried to delay its prosecution at every turn both in and out of court. The bank retained multiple Trump-tied lobbying firms — including Ballard Partners and King & Spalding — to avoid charges for violating U.S. sanctions against Iran.

Former Secretary of State John Bolton’s new book “The Room Where It Happened” accuses Trump of trying to replace Obama-era prosecutors with his own in order to appease Turkish President Recep Tayyip Erdoğan.

“Trump then told Erdoğan he would take care of things, explaining that the Southern District prosecutors were not his people, but were Obama people, a problem that would be fixed when they were replaced by his people,” Bolton wrote, alleging the conversation took place at the G20 summit in 2018.

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The Trump administration fired two U.S. attorneys in Manhattan tied to the case that embarrassed Erdoğan, but if the president did try to sabotage the case, neither effort worked out as intended.

The Halkbank case traces its origins in the prosecution of gold trader Reza Zarrab, a former Erdoğan ally who ultimately became a U.S. government witness and implicated the Turkish strongman in sanctions-busting trades in November 2017.

Before that bombshell testimony, Trump fired former U.S. Attorney Preet Bharara in March 2017, who brought the case against Zarrab. Bharara’s ouster fell weeks after news broke that Zarrab retained Rudy Giuliani to shuttle between Washington and Turkey to negotiate a deal with Trump and Erdoğan to free him.

After that quasi-diplomatic offensive failed, Bharara’s deputy Joon Kim steered the cases against Zarrab and Atilla to trial and conviction. Kim ultimately would be replaced by former U.S. Attorney Geoffrey Berman, a Trump donor appointed by ex-U.S. Attorney General Jeff Sessions.

For nearly two years, Halkbank avoided indictment while heavily lobbying the U.S. government, but Berman ultimately charged the bank shortly after Trump precipitously withdrew from Syria following a phone call with Erdoğan. Attorney General Bill Barr had tried to prevent the charges, but Berman stood his ground, CNN would later report.

Today’s hearing in the Halkbank case marks the first since the bank pleaded not guilty in March.

Since that time, Trump’s handpicked Attorney General Bill Barr tried to fire Berman, leading to an extraordinary standoff between the two prosecutors. Berman refused to leave his office without having his deputy Aubrey Strauss protecting his cases, and he forced Barr to abandon his unusual plan to temporarily replace him with a U.S. Attorney from another district.

Under Strauss’ stewardship, the same line prosecutors assigned to the case for nearly half a decade appeared on the telephone conference: Lockard, Sidhardha Kamaraju and Emil Bove.

Reflecting the steady progress of the Halkbank prosecution, the same U.S. district judge who steered the saga continued to preside over the case: the Honorable Richard Berman, who is not related to the former U.S. attorney.

“I’ll come up with a schedule,” Berman informed the attorneys Tuesday morning, declining to set a date immediately.

Halkbank’s request for another extensive delay until trial allows the bank the opportunity for another change of the guards. Trump wants the Senate to replace Strauss with Securities and Exchange Commission Chair Jay Clayton, the president’s occasional golfing partner who has no experience as a prosecutor or a litigator.

For now, Clayton’s confirmation is unlikely to occur in the Senate, as Republican Senator Lindsay Graham expressed a willingness to honor a tradition allowing his New York colleagues to block the nomination.

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Judge Berman made clear that he is in no rush to set down a trial date.

“If there’s a show-stopper date in there that somebody can’t manage, we’ll talk about that,” Berman told the attorneys.

Halkbank announced plans to try to recuse Judge Berman, an effort that would clog up proceedings further.

The Turkish government’s attacks on the presiding judge have a history too. Zarrab tried and failed to push Berman to step down from the case in 2017, citing a conspiracy theory advanced in Turkey’s largely state-controlled press.


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