Halkbank Official Found Guilty of Illegally Moving Billions of Dollars Gold from Turkey to Iran

In a scheme that moved tens of billions in dollars and gold from Turkey to Iran through a complex network of businesses, banks, and front companies, Turkish banker Mehmet Hakan Atilla was found guilty of a range of financial crimes in a Manhattan courtroom this week, Iran News Updates reports.

In late October of 2016, Justice Department officials began investigating Reza Zarrab, a dual Iranian-Turkish national. He was a gold trader who had helped Iran evade sanctions with the help of Turkish banks in 2013 and 2014, yielding Iran an estimated $13 billion. In Istanbul, in March 2014, a leaked report suggested that Zarrab led another sanctions-busting scheme involving fake invoices for billions more in fictitious humanitarian shipments to Iran that were processed through Turkish banks.

However, last March, when Zarrab inexplicably brought his family to America for a vacation at Disney World, U.S. authorities arrested him in Florida for engaging in conspiracies to violate sanctions, commit bank fraud, and launder money.

The case took a turn on March 28, when, Justice Department officials from the Southern District of New York arrested Atilla, the deputy CEO and general manager at Turkey’s state-owned Halkbank. He was accused of conspiring with Zarrab to launder hundreds of millions of dollars through the U.S. financial system on behalf of Iran. Halkbank held one of the oil escrow accounts for Iran, and it constituted a creative method of withholding petrodollars from Iran, as mandated by the Iran Threat Reduction and Syria Human Rights Act (ITRA) of 2012.

Defying U.S. sanctions, Halkbank released those funds to buy gold, that was then shipped to Iran. Halkbank was also accused of helping to process Zarrab’s fictitious invoices, the ones first exposed in the 2014 prosecutor’s report.

Halkbank hired Ballard Partners, a U.S. lobbying firm that already represented the Turkish government in September, for $1.5 million. Zarrab hired former New York Mayor Rudy Giuliani and former Attorney General Michael Mukasey in an attempt to derail the proceedings. However, in late November, Zarrab pled out, making him a witness for the prosecution. Atilla would stand trial alone.

Zarrab delivered seven days of sensational testimony. He testified that in 2010, when Iran began to feel the squeeze from U.S. sanctions for its nuclear drive the scheme began. He said that in 2012 the Iranian government gave him explicit directions to conduct these illegal transactions. Zarrab claimed that the Turkish economy minister allegedly took $50 million in bribes to help facilitate the scheme.

David Cohen and Adam Szubin, two former Treasury Department undersecretaries testified that Halkbank officials repeatedly reassured them their gold-trader clients, including Zarrab, were in compliance with U.S. sanctions against Iran.

The jury returned a verdict of guilty on five out of six counts.

Will the United States government now issue a fine against Halkbank? French Bank BNP Paribas was fined $8.9 billion for far lesser transgressions in 2015, for its violations of sanctions against Sudan, Cuba, and Iran. Given Tehran’s current domestic turmoil, the regime probably gave little thought to the Atilla verdict. But this is what the people are calling for — better economic conditions, and a foreign policy that doesn’t squander Iran’s wealth on adventurism outside the country’s borders.