Halkbank executive arrested in US over ‘Zarrab links’

ANKARA/NEW YORK

REUTERS photo

U.S. prosecutors on Match 28 charged a senior executive at a Turkish state-owned bank with participating in a multi-year scheme to violate U.S. sanctions against Iran, escalating a case that has added to tensions between the United States and Turkey ahead of U.S. Secretary of State Rex Tillerson’s visit to Ankara on March 30.

Mehmet Hakan Atilla, a deputy general manager of Halkbank, is accused of conspiring with wealthy Iranian-Turkish gold trader Reza Zarrab to conduct hundreds of millions of dollars of illegal transactions through U.S. banks on behalf of Iran’s government and other entities in that country.

Atilla, a 47-year-old Turkish citizen, looked somber as he appeared at a brief hearing before U.S. Magistrate Judge James Francis in Manhattan, a day after being arrested at John F. Kennedy International Airport, Reuters reported. 

“Our deputy general manager in charge of international banking, Mehmet Hakan Atilla, was taken into custody in the United States where he was for business purposes on March 28,” the bank stated early on March 29, adding that it was working with the authorities.

“Our bank and relevant state bodies are conducting the necessary work on the subject and information will be shared with the public when it is obtained,” it added.

Atilla had been in New York for the latest in a series of investor meetings ahead of a planned Halkbank dollar-denominated subordinated bond issue, Turkish bankers said.


Issue to be discussed by Turkish, US officials

The arrest will be discussed with Tillerson, Foreign Minister Mevlüt Çavuşoğlu stated on March 29.  

In an interview with broadcaster TRT Haber, Çavuşoğlu also called for a “transparent process” regarding Atilla’s arrest and said the Turkish consul general was unable to receive information about him until a formal statement was made.

Atilla was arrested on the same day it was revealed that Zarrab, the gold trader, had added former New York City Mayor Rudolph Giuliani, a confidante of President Donald Trump, to his legal team.


Fake invoices allegedly used

According to a criminal complaint, Atilla worked with Zarrab and others from 2010 to 2015 to conceal Zarrab’s ability to supply currency and gold to Iran through a Turkish bank, without subjecting the bank to U.S. sanctions.

Prosecutors say that as part of that scheme, Atilla and Zarrab used front companies and fake invoices to trick U.S. banks into processing transactions disguised to appear as though they involved food, and thus were exempt from U.S. sanctions, Reuters reported. 

Zarrab, 33, is widely known in Turkey as his name was embroiled in the Dec. 17-21, 2013 corruption probe that embroiled four former ministers and other state officials. Charges against him were later dropped as the government moved to quash the investigations.

Zarrab was arrested in Miami in March last year on charges that could see him sentenced to up to 30 years in prison.

The U.S. charges against Zarrab include conspiring to violate sanctions against Iran, defraud U.S. banks and launder money by helping Iranian entities transfer funds through U.S. institutions.