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Jury convicts Turkish banker in Iran sanctions evasion scheme

Hakan Atilla, a manager at the government-owned Halkbank, was convicted on five conspiracy and bank fraud counts, but acquitted on a money laundering count.

In this courtroom sketch, Mehmet Atilla, center, testifies

In this courtroom sketch, Mehmet Atilla, center, testifies during his trial on corruption charges in New York on Dec. 15, 2017. Photo Credit: In this courtroom sketch, Mehmet Atilla, center, testifies during his trial on corruption charges in New York on Dec. 15, 2017.

A Manhattan federal jury convicted a Turkish banker Wednesday of participating in a multibillion-dollar scheme to evade Iran sanctions in a sensitive case that has roiled diplomatic relations between the United States and the president of Turkey.

Hakan Atilla, 47, a manager at Turkey’s government-owned Halkbank, was convicted of aiding millionaire gold trader Reza Zarrab, who masterminded the scheme but became a government witness after he was arrested by federal agents last year on a family trip to Disney World.

In testimony at trial, Zarrab and a former Turkish police investigator who fled the country both implicated President Recep Tayyip Erdogan and former government ministers in extensive bribery and corruption that allowed to flourish the scheme to launder Iranian oil money through gold and food deals.

Jurors returned their verdict on the first day following a holiday break after having failed to reach a verdict during three days of deliberation in December. They acquitted Atilla on a single money laundering count, but convicted him on five conspiracy and bank fraud counts.

Erdogan has claimed the trial was part of a plot by Fethullah Gulen, a dissident cleric living in Pennsylvania, to undercut his government, and has accused presiding U.S. District Judge Richard Berman, former Manhattan U.S. Attorney Preet Bharara, and Bharara successor Joon Kim with being in league with Gulen.

The trial was closely followed by a cadre of Turkish journalists and their readers back home, and after Wednesday’s verdict Kim pointedly noted that the conviction had followed a “full fair and open trial” that aired both the “brazen” sanctions plot and alleged official misconduct.

“If you lie repeatedly to U.S. Treasury officials and fabricate documents, all as part of a secret scheme to smuggle billions of dollars in Iranian oil money past the U.S. sanctions net, as Atilla did, then you should be prepared for the consequences,” Kim said.

Zarrab testified that from 2012 to 2015, he made profits of $100 to $150 million from the scheme. After being jailed in the United States, he hired former New York City Mayor Rudy Giuliani and former U.S. Attorney General Michael Mukasey to try to work out a diplomatic deal with Erdogan to free him.

When that failed, Zarrab agreed to plead guilty and lay out the story in court just a few weeks before the trial was to begin, leaving Atilla alone at the defense table.

The Turkish police officer, Huseyin Korkmaz, testified that he was a top investigator in a smuggling and bribery probe that led to the jailing of Zarrab and others in the sanctions scheme in 2013. But Zarrab was freed and Korkmaz was jailed along with other police and prosecutors in a subsequent purge, he said.

While the trial embarrassed Erdogan, lawyers for Atilla contended that the banker was a “pawn” — a secondary figure used as a vehicle to put the Turkish government on trial after prosecutors made a deal with Zarrab, who was at the center of the scheme.

Prosecutors said Atilla was a critical part of the plot — a sanctions expert at Halkbank, who helped bank officials who were taking bribes and Zarrab fend off questions from the United States. But, unlike others, Atilla was not accused of taking any bribes, and he testified that he didn’t know about the broader scheme.

Sentencing for Atilla was scheduled for April 11. His lawyers said they plan to appeal the verdict. In addition to Zarrab and Atilla, seven other Turks have been indicted in the case, but none are in U.S. custody.

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