Halkbank Pleads Not Guilty in Iran Sanctions Case

EghtesadOnline: Turkey’s state-owned Halkbank pleaded not guilty Tuesday (March 31) to US charges that the bank helped Iran evade sanctions on billions of dollars in oil funds.

News ID: ۷۴۹۸۱۱

04 April 2020

The plea, entered on behalf of the company by its lawyer, Robert Cary, comes after months of legal wrangling over the bank’s response to allegations of fraud, money laundering and conspiracy, according to Financial Tribune.

The arraignment was conducted by US District Judge Richard Berman in Manhattan by teleconference after many in-person hearings were halted over coronavirus fears, Bloomberg reported.

Halkbank had previously refused to acknowledge an October indictment by a federal grand jury in New York. The bank challenged the authority of prosecutors and sought to have the case dismissed before entering a plea, but district and appellate courts rejected its legal argument.

The case is an outgrowth of earlier prosecutions of a money launderer and a senior Halkbank executive who aided the alleged scheme to allow Iran to secretly tap as much as $20 billion in overseas oil revenue frozen in its accounts at Halkbank.

The money launderer, Reza Zarrab, pleaded guilty and testified against the Halkbank executive, with evidence during trial showing they got help from Turkish government officials and senior bank managers -- including the former chief executive officer.

Before the case was filed, Turkey spent more than a year urging the US through diplomatic channels to drop the investigation. Turkish President Recep Tayyip Erdogan made direct appeals to President Donald Trump and other US officials.

Halkbank, which is owned by the Turkish government, was charged in October with helping Iran access billions of dollars in oil revenue that had been frozen in its accounts under US sanctions.

US prosecutors announced fraud and money laundering charges in the case on Oct. 15, claiming Halkbank and its executives used money servicers and front companies in Iran, Turkey and the United Arab Emirates to evade sanctions.