NEW YORK (AP) — A Turkish bank must face criminal charges that it evaded sanctions against Iran by processing billions of dollars of Iranian oil revenue, an appeals court ruled Friday.
The 2nd U.S. Circuit Court of Appeals upheld a decision by U.S. District Judge Richard M. Berman.
An indictment returned in 2019 said the bank illegally moved about $20 billion in Iranian oil and gas revenues. It also said the state-owned bank sometimes disguised money movements as purchases of food and medicine so they’d qualify for a “humanitarian exception” to sanctions.
A lawyer for Halkbank declined to comment on the ruling.
In a decision written by Circuit Judge Jose A. Cabranes, a three-judge panel concluded that assertions that Halkbank was protected from prosecution by immunity given to foreign sovereigns through the Foreign Sovereign Immunities Act is overcome by an exception for crimes committed during commercial activity.
Although the bank was not charged until two years ago, the allegations involving it surfaced in 2015 when a wealthy Turkish-Iranian gold trader was arrested on sanctions charges as he arrived in the U.S. to take his family to Disney World in Florida.
The trader — Reza Zarrab — eventually testified he paid over $50 million in bribes to a former Turkish finance minister to help a sanction-busting scheme prosecutors say was run by Halkbank’s deputy general manager for international banking, Mehmet Hakan Atilla.
Prosecutors maintained that Atilla used his position to help build and protect the scheme that enabled billions of dollars in profits from Iranian oil sales to flow through world financial markets since 2011.
Atilla was convicted of five of six criminal charges against him, including conspiring to defraud the U.S., bank fraud and conspiracy to violate sanctions against Iran.
Zarrab hired Rudy Giuliani, the former New York mayor, to try to broker a deal between Turkey’s president and the U.S. government to resolve the charges. The talks in 2017 failed to result in a deal.
Zarrab eventually cooperated and testified against Atilla at his trial. Atilla was sentenced to two years and eight months in prison.
After Atilla’s release from a U.S. prison, he returned to Turkey.