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Jury finds Atilla guilty on 5 counts in US sanctions evasion scheme

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The jury in the trial of Mehmet Hakan Atilla, an executive of Turkey’s Halkbank charged with participating in a scheme to evade US sanctions on Iran, in US federal court on Wednesday reached a verdict of guilty on five counts, including bank fraud and conspiracy, and not guilty on one count of money laundering.

Atilla and Turkish-Iranian gold trader Reza Zarrab and seven other people, including Turkey’s former economy minister and two additional Halkbank executives, were charged with engaging in transactions worth hundreds of millions of dollars for Iran’s government and Iranian entities from 2010 to 2015 in a scheme to evade US sanctions.

Only Zarrab and Atilla are currently in US custody after separately being arrested upon trying to enter the United States in 2016 and 2017, respectively.

Prosecutors portrayed Atilla as a sanctions expert who designed the complex scheme and then lied to US Treasury Department officials about it. He lied again, they argued, when he testified in his own defense at the trial, The New York Times reported.

“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 denied he had conspired with Zarrab or that he had been involved in any other wrongdoing.

Joon Kim, the acting US Attorney in Manhattan, issued a statement after the verdict was read. “Today, after a full, fair and open trial, a unanimous jury convicted Hakan Atilla, a senior banker at Half Bank. Along with the prior guilty plea of Reza Zarrab, two men at the heart of this massive and brazen scheme that blew a billion-dollar hole in the Iran sanctions scheme now stand convicted of serious federal crimes. 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. …”

Zarrab made a plea deal with prosecutors and has served as the key witness in Atilla’s trial.

Judge Richard Berman had denied two defense requests for a mistrial, writing in his last decision that “Atilla has received a thoroughly fair and transparent trial.”

Zarrab testified in New York federal court in early December that he had bribed Turkey’s former economy minister, Mehmet Zafer Çağlayan, in a billion-dollar scheme to smuggle gold for oil in violation of US sanctions on Iran.

Zarrab said that Turkey’s then-prime minister and current president, Recep Tayyip Erdoğan, personally authorized the involvement of Turkish banks in the scheme.

Zarrab also said he made payments to secure his release in February 2014 and that those payments were partly bribes.

The Turkish government seized the assets of Zarrab and his relatives following his testimony in the US court.

Hüseyin Korkmaz, a former İstanbul police officer who testified at the New York trial of Atilla, called Erdoğan the “No. 1” target in a group that also included Çağlayan, and Süleyman Aslan, a former chief executive at Halkbank, a large Turkish state-owned bank that was central to the sanction-busting scheme.

Police notes of the Dec. 17 operations show that Zarrab personally talked with Erdoğan on April 13, 2013 and asked for an official police guard. Erdoğan and his Cabinet approved it immediately.

A phone call and a video in the Dec.17 file show that Zarrab in July 2013 sent an unspecified amount of money to the Service for Youth and Education Foundation of Turkey (TÜRGEV), run by Bilal Erdoğan, Erdoğan’s son.

Turkey issued detention warrants for six family members of Korkmaz following his testimony.

Turkish President Erdoğan said on Dec. 29 that Atilla was not guilty and that he thought the jury in the New York court would decide similarly.

“As of today, I think that it can be seen that Hakan Atilla is not guilty. I think the jury has also seen that,” Erdoğan told journalists on his plane while returning from an Africa tour.

“I think the proceedings involving Hakan Atilla will end as our bank [Halkbank] expects. Our expectation is the same,” added Erdoğan.

Turkey’s Justice Minister Abdulhamit Gül said earlier in December that the trial of Atilla lacked a basis in law.

“When you look at the cross-examination and all phases of the trial, for the time being the case has collapsed. It has no legal validity,” Gül told Kanal 24 TV.

The Turkish minister claimed that both the prosecutor and the judge were linked to the faith-based Gülen movement, declared as a major enemy by President Erdoğan and accused by him of masterminding a failed coup in 2016.

Gül said if a crime is committed in Turkey, it should be tried by Turkish courts. “Turkish courts have already ruled on this issue,” he added.

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