The US Attorney’s Office for the Southern District of New York announced on Wednesday the filing of a superseding indictment charging former Turkish Economy Minister Mehmet Zafer Cağlayan and three others with conspiring to use the US financial system to conduct hundreds of millions of dollars’ worth of transactions on behalf of the government of Iran and other Iranian entities barred by US sanctions.
Çağlayan, former state-run Halkbank General Manager Süleyman Aslan and two other individuals, Levent Bakkal and Abdullah Happani, are also charged with lying to US government officials about those transactions; laundering funds in connection with those transactions including millions of dollars in bribes to Cağlayan and others; and defrauding several financial institutions by concealing the true nature of the transactions.
According to a statement from the US Attorney’s Office on Wednesday, Çağlayan is alleged to have received tens of millions of dollars worth of bribes in cash and jewelry from the proceeds of the scheme to provide services to the government of Iran and to conceal those services from US government officials. Using his position as minister of the economy, Cağlayan directed other members of the scheme, including officers of Halkbank, to engage in certain types of deceptive transactions, approved the steps taken by other members to implement the scheme, and protected the scheme from competitors as well as from scrutiny. As a result, the co-conspirators induced US banks to unknowingly process international financial transactions in violation of sanctions on Iran.
The statement said Joon H. Kim, the acting US attorney for the Southern District of New York, Dana Boente, the acting assistant attorney general for national security and William F. Sweeney Jr., the assistant director-in-charge of the New York Field Office of the Federal Bureau of Investigation announced the filing of the superseding indictment on Wednesday.
According to the superseding indictment, nine other defendants also conspired to lie to US government officials about international financial transactions for the government of Iran and used the US financial system to launder bribes paid to conceal the scheme.
The superseding Indictment further alleges that Çağlayan’s co-defendants – Turkish-Iranian gold trader Reza Zarrab, aka Rıza Sarraf, Halkbank executive Mehmet Hakan Atilla, Mohammad Zarrab, Camelia Jamshidy, aka Kamelia Jamshidy, and Hossein Najafzadeh, who previously were charged in this case with the same offenses – participated in the same crimes.
US authorities arrested Zarrab in Miami in March on charges of helping Iran process millions of dollars of transactions when it faced US sanctions for its nuclear program.
Atilla was also arrested in New York City in late March on similar charges to those of Zarrab.
Zarrab was the prime suspect in a graft probe in 2013, along with others from the inner circle of the ruling Justice and Development Party (AKP) government and the then-Prime Minister and present-President Recep Tayyip Erdoğan, for having paid bribes to Cabinet-level officials, including Çağlayan and Halkbank General Manager Aslan, to facilitate transactions benefiting Iran.
After Erdoğan cast the case as a coup attempt to overthrow his government orchestrated by his political enemies, several prosecutors were removed from the case, police were reassigned and the investigation against Zarrab was dropped.