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Top Turkish Bank Executive Arrested in Pro-Iran Bank Fraud

A senior executive at one of Turkey’s established state-owned banks was arrested in the U.S. on Monday in connection with a scheme meant to evade trade sanctions on Iran, which is putting additional strain on the relations between Turkey and the U.S.

Mehmet Hakan Atilla, a deputy chief executive officer at Turkiye Halk Bankasi AS, is being accused of improper dealings with Reza Zarrab, an Iranian-Turkish gold trader. The relationship was allegedly used to launder hundreds of millions of dollars on behalf of Iran and Iranian companies, using the U.S. financial system.

Attilla appeared at a brief hearing before U.S. Magistrate Judge James Francis in Manhatten, a day after being arrest at JFK International Airport. It is unclear if he has hired a lawyer or made any application for bail. He remains in federal custody for now, according to Reuters. If convicted, he could face a maximum 30-year prison sentence for conspiracy to commit bank fraud and another 20 years for violating U.S. sanctions.

Affairs between Turkey and the U.S. have been strained since the arrest of Zarrab and also due to the conflicting differences in tactics regarding Syria. Zarrab, a dual citizen of Iran and Turkey, had a prior arrest in 2013 as part of a corruption probe. He also had close ties to President Erdogan’s administration, which has accused the U.S. of ulterior motives when it brought a case forward for Zarrab’s arrest last year, according to Fox News. As a result, the relations between these two allies has been strained of late.

Nihat_Zeybekci_Pic_crop

Nihat Zeybekci

According to the criminal complaint, Atilla collaborated with Zarrab and others from 2010 to 2015 to hide Zarrab’s ability to supply currency and gold to Iran’s government and a number of entities in Iran through the Turkish bank, without exposing the bank to U.S. sanctions. As part of their plain, they duped several U.S. banks into processing transactions using fake invoices and companies. They were often disguised to appear as though they involved food to make them seem as if they were humanitarian in nature and immune to sanctions.

 

“United States sanctions are not mere requests or suggestions, they are the law,” said Acting U.S. Attorney Joon Kim in a statement.

 

Turkey’s economic minister, Nihat Zeybekci, criticized the way the U.S. arrested Atilla. “At the very least, if there was a situation like this, they could have shared it with Turkey in advance,” said Zeybekci, noting that the banker could have been “invited to testify”.

Turkish Foreign Minister Mevlut Cavusoglu plans to raise the issue during his upcoming visit of the U.S. Secretary of State Rex Tillerson. Tillerson is seeking to shore up support with this ally in the fight against Islamic State in Syria and Iraq.

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