Turkish bank Halkbank accused of scheme to evade Iran sanctions

Turkish bank Halkbank is charged with taking part in a multibillion-dollar scheme to evade U.S. sanctions on Iran

  • The charges against Turkey’s Halkbank were announced on Tuesday by federal authorities in New York
  • Halkbank – whose majority shareholder is the government of Turkey – is accused of fraud, money laundering and violating U.S. sanctions against Iran 
  • Prosecutors say senior bank officials designed and carried out the scheme to move billions of dollars of Iranian oil revenue illegally
  • The alleged scheme allowed Iran to spend proceeds from sales of its oil and gas on international markets using a complex web of front companies
  • Some of those officials allegedly received tens of millions of dollars in bribes 

A major Turkish bank has been criminally charged with taking part in a multibillion-dollar scheme to evade U.S. sanctions against Iran.

The charges against Halkbank, whose majority shareholder is the government of Turkey, were announced on Tuesday by federal authorities in New York.  

The indictment against the bank comes after one of its former executives, Mehmet Hakan Atilla, was found guilty and sentenced to prison after a trial in Manhattan federal court last year.

Halkbank is accused of fraud, money laundering and violating U.S. sanctions against Iran.

Prosecutors say senior bank officials designed and carried out the scheme to move billions of dollars of Iranian oil revenue illegally. 

The charges against Halkbank, whose majority shareholder is the government of Turkey, were announced on Tuesday by federal authorities in New York

The alleged scheme, which ran between 2012 and 2016, allowed Iran to spend proceeds from sales of its oil and gas on international markets – in violation of U.S. sanctions – using a complex web of front companies. 

The scheme allegedly ran with the protection of high-ranking officials in Iran and Turkey.

Some of those officials received tens of millions of dollars in bribes to help promote the scheme and shield it from the scrutiny of U.S. regulators, according to prosecutors. 

Prosecutors say the purpose of the scheme was to create a pool of Iranian oil funds in Turkey and the United Arab Emirates held in the names of front companies, which concealed the funds’ Iranian nexus. 

From there, the funds were used to make international payments on behalf of the Government of Iran and Iranian banks, including transfers in U.S. dollars that passed through the U.S. financial system in violation of U.S. sanctions laws. 

Assistant Attorney General for National Security, John C. Demers, called the crimes one of the most serious Iran sanctions violations his office has seen. 

‘Halkbank, a Turkish state-owned bank, allegedly conspired to undermine the United States Iran sanctions regime by illegally giving Iran access to billions of dollars’ worth of funds, all while deceiving U.S. regulators about the scheme,’ he said. 

‘This is one of the most serious Iran sanctions violations we have seen, and no business should profit from evading our laws or risking our national security.’ 

The indictment against the bank comes after one of its former executives, Mehmet Hakan Atilla (center), was found guilty and sentenced to prison after a trial in Manhattan federal court last year

The indictment against the bank comes after one of its former executives, Mehmet Hakan Atilla (center), was found guilty and sentenced to prison after a trial in Manhattan federal court last year

FBI Assistant Director-in-Charge William F. Sweeney Jr. vowed to aggressively pursue those who intentionally violate U.S. sanctions laws and attempt to undercut national security.

‘Halkbank illegally facilitated the illicit transfer of billions of dollars to benefit Iran, and for far too long the bank and its leaders willfully deceived the United States to shield their actions from scrutiny. That deception ends today,’ he said. 

Halkbank is charged with conspiracy to defraud the United States, conspiracy to violate the International Emergency Economic Powers Act, bank fraud, conspiracy to commit bank fraud, money laundering and conspiracy to commit money laundering. 

A U.S. lawyer for Halkbank did not immediately respond to a request for comment.

The prosecutors are seeking to compel Halkbank to forfeit money and property, though they did not give a specific amount. 

The charges came a day after President Donald Trump announced sanctions on Turkey over its military offensive against U.S.-allied Kurdish-led forces in northern Syria. 

Trump’s unexpected decision to withhold protection from Syria’s Kurds after a phone call with Turkish President Tayyip Erdogan on Oct. 6 swiftly upended five years of U.S. policy on Syria.