Turkish Halkbank’s jailed executive denies any links to Zarrab case in US

NEW YORK

REUTERS photo

The Iranian-born Turkish businessman Reza Zarrab has denied charges against him in the case over attempting to evade U.S. sanctions on Iran, while Mehmet Hakan Atilla, a deputy general manager of Halkbank, said he has no connection to the case. 

Atilla is accused of conspiring with Zarrab to conduct illegal transactions worth hundreds of millions of dollars through U.S. banks on behalf of the Iranian government and other entities in the country.

Both Zarrab and Atilla are charged with participating in a multi-year scheme to violate U.S. sanctions against Iran.

In the hearing on April 24, Southern District Assistant U.S. Attorney Dennis Lockard said Zarrab is charged with a “serious national security offense.”

Lockard criticized former New York City Mayor Rudolph Giuliani and former U.S. Attorney General Michael Mukasey - both members of Zarrab’s legal team - during a pretrial hearing before Southern District Judge Richard Berman. He said separate affidavits filed by Giuliani and Mukasey to explain their roles in the case mischaracterized the alleged crimes as not serious or harmful to the U.S. because no transactions involved weapons, nuclear technology or other contraband.

“The entities that benefited from this alleged scheme include the Islamic Revolutionary Guard Corps and agents or affiliates of that entity, Iranian banks that have been sanctioned for their role in providing financing for Iran’s nuclear programs, and Iranian commercial airlines,” Lockard said, adding that prosecutors would prove Zarrab and coconspirators “worked with high-level government and banking officials in Iran and Turkey after offering those services to Iran in a letter personally addressed to then-Iranian President Mahmoud Ahmadinejad.” 

“Zarrab funneled tens of millions of dollars to high-level government and bank officials to facilitate and protect this scheme,” Lockard said.

He also said Giuliani and Mukasey tried to “muddy the waters” by suggesting in their affidavits that the government had leaked through publicly filed court documents the fact that Giuliani and Mukasey had joined the case.

Lockard said it was not a confidential conversation when Zarrab’s lawyers notified prosecutors earlier this year that Giuliani and Mukasey planned to speak with Turkish President Recep Tayyip Erdoğan. 

He said it was necessary for prosecutors to reveal the meeting as they asked the judge to conduct a hearing to ensure that Zarrab was aware that law firms employing Giuliani and Mukasey had represented banks in the case and that he understood there could be a conflict of interest. Giuliani’s firm has also represented the government of Turkey.

Zarrab’s criminal lawyer, Benjamin Brafman, declined to comment on April 24 after telling the judge he didn’t “want my silence to suggest that I agree with what Mr. Lockard just said.”

Last week, Berman said he will appoint independent counsel in the hearing to make sure the defendant understands the possible conflicts involved with his choice of counsel.

Atilla, Zarrab and others are accused of conspiring to create and use false and fraudulent documents to disguise prohibited transactions for Iran and make those transactions falsely appear as transactions involving food, meaning they would be exempted from the sanctions as humanitarian aid.

The U.S. evidence is based on a number of wiretapped phone conversations involving Zarrab, Atilla and several informants, who are not named, to support its case against the banker, including Zarrab’s reference to the allegedly fake food shipments.

Zarrab, 33, is widely known in Turkey as his name was involved in the Dec. 17-25, 2013 corruption probe that embroiled four former ministers and other state officials. The charges against him were later dropped.