A Turkish banker was found guilty by a U.S. jury on five counts relating to an Iran sanctions-dodging scheme that involved the highest levels of the Turkish government.
Mehmet Hakan Atilla, 47, was convicted of bank fraud and four counts of conspiracy. He faces up to 105 years in federal prison.
But Atilla, a deputy general manager at Turkey’s state-owned Halkbank, was a side player in an international drama unfolding between the United States and Turkey that began with the arrest of Atilla’s former co-defendant. Reza Zarrab, a Turkish gold trader, was jailed in March 2016 while visiting the U.S. on suspicion of orchestrating an scheme to help Iran evade U.S. sanctions.
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Immediately, the Turkish government began lobbying for Zarrab’s release, fearing fearing what his trial might bring to light. The foundation for the U.S. case against Zarrab was laid in a 2013 corruption scandal in Turkey, in which Turkish investigators charged that Zarrab was at the center of a bribery and corruption ring related to his gold trading activities. Turkish officials allegedly discussed his freedom in a $15 million would-be deal with Michael Flynn.
Zarrab later hired Rudy Giuliani to negotiate a prisoner exchange for him between the U.S. and Turkey but to no avail.
When those remedies appeared to be off the table, Zarrab flipped and began cooperating with U.S. authorities. Among the benefits he might get for his testimony is witness protection for him and his family.
Zarrab testified over seven days, though Atilla was largely absent from his statements. Instead, Zarrab painted a picture of a culture of corruption and bribery in Turkey, reaching up to the economy minister and beyond.
He also suggested that the path for his sanctions-dodge scheme was cleared personally by President Recep Tayyip Erdogan.
But while prosecutors promised the jury that Atilla was a key player in developing the sanctions-dodge arrangement, Zarrab instead testified about his own scheme—playing dozens of audio recordings and drawing outlines in support. He described how, with the signoff of Turkish officials and bank leaders, he moved Iranian money in such a way as to allow it to pay off international debts through illegal proceeds from oil sales.
Atilla took the stand in his own defense, where he feverishly denied the accusations.
"Did you ever conspire with Reza Zarrab to evade sanctions?” his attorney, Cathy Fleming, asked.
“Never,” Atilla replied.
In closing arguments, defense attorney Victor Rocco described him as “a blameless pawn,” while prosecutors claimed Atilla and his bank thought they were “too big to jail.”
Atilla will be sentenced April 11.
