A federal judge in Manhattan on Dec. 26 rejected a request by Turkey’s state-owned Halkbank to put on hold a federal prosecution accusing it of helping Iran evade U.S. economic sanctions.
“Simply stated, the court rejects Halkbank’s efforts to avoid and delay appropriate district court proceedings,” U.S. District Judge Richard Berman wrote in a 5-page decision, reiterating what he wrote earlier this month, the Courthouse News Service said in a report.
“Halkbank has two reasonable choices: it can either appear in a U.S. court to raise any legitimate defense or it can choose not to appear and face any attendant risks,” Berman said, adding that Halkbank would not face irreparable harm if the case proceeded.
In response to Halkbank’s recent claims that the proceedings would harm the bank and thereby the Turkish economy and would have a negative impact on the U.S.-Turkey relations, Berman said: “Halkbank fails to point out that its economic problems may have predated the Indictment, and that mitigation of any economic and reputational damage may best be assured by Halkbank’s speedy response to the criminal charges.”
The U.S judge said that Halkbank stands in violation of two court orders to appear for arraignment after federal prosecutors in Manhattan charged the bank with taking party in a multibillion-dollar scheme to evade U.S. sanctions on Iran.
Halkbank has resisted entering a plea to the federal fraud and money laundering charges announced on Oct. 15.
The bank had asked Berman to stay the case until the federal appeals court in Manhattan decided whether it could make a “special appearance” to challenge the jurisdiction of U.S. courts without first entering a plea.
Berman ruled on Dec. 5 that a plea should come first.
U.S. prosecutors alleged that from 2012 to 2016, Halkbank and its executives used money servicers and front companies in Iran, Turkey and the United Arab Emirates to evade sanctions.
They also said Halkbank engaged in transactions on Iran’s behalf that would have exposed the bank to sanctions, including allowing revenue from oil and gas sales to be spent on gold, and facilitating sham purchases of food and medicine.
The U.S. Department of Justice has charged nine people in the alleged scheme.
They included former Halkbank executive Mehmet Hakan Atilla, who was convicted in January 2018 after another defendant, wealthy Turkish-Iranian gold trader Reza Zarrab, pleaded guilty and testified against him.
Atilla returned to Turkey this year after leaving prison, and was named general manager of the Istanbul stock exchange.