By Harut Sassounian
Halkbank, whose majority shareholder is the Turkish government, pleaded not guilty in New York on March 31, 2020, to criminal charges that it helped Iran illicitly transfer tens of billions in dollars and gold, wrote Aykan Erdemir and Philip Kowalski in an essay published on April 3 by the Foundation for Defense of Democracies, a policy institute based in Washington, D.C.
On October 15, 2019, the Federal Southern District Court of New York accused Halkbank of “fraud, money-laundering and sanctions offenses,” alleging that Halkbank and its executives aided Iranian-Turkish gold trader Reza Zarrab in a “multi-billion dollar scheme to circumvent U.S. sanctions on Iran.”
Initially, Halkbank refused to appear in court “claiming that the criminal charges are beyond the U.S. court’s jurisdiction,” Erdemir and Kowalski wrote. However, when “prosecutors proposed escalating contempt fines which could have totaled $1.8 billion after eight weeks,” the bank agreed to respond to the court charges.
Originally, the Turkish and Iranian officials had concocted a scheme to exchange gas for gold to circumvent the U.S. sanctions, by claiming that the gold was headed not to Iranian government entities but to Iran’s “private sector.” Erdemir and Kowalski stated that “the scheme ultimately yielded the Iranian regime some $13 billion in Turkish gold between 2012 and 2013. Once the U.S. Congress introduced legislation to close the ‘golden loophole’ in 2013, Iran used Turkish front companies to issue invoices for fake transactions of food and medicine that fall under the humanitarian exception to U.S. sanctions. In one infamous case of over-invoicing, a Turkey-based luxury yacht company used Halkbank to sell nearly 5.2 tons of brown sugar to Iran’s Bank Pasargad at the price of approximately $240 per pound.”
This scheme was first exposed in December 2013 by Turkish investigators who implicated then Prime Minister Recep Tayyip Erdogan, several of his ministers and other senior officials, including Halkbank’s managers. Erdogan shut down the probe by firing the police officials, prosecutors and judges!
The scandal resurfaced in March 2016 when Iranian-Turkish ring-leader Reza Zarrab was arrested in Miami after he flew to Florida to visit Disney World with his family.
In March 2017, U.S. authorities arrested Halkbank Deputy CEO Mehmet Hakan Atilla upon his arrival in New York. Zarrab pleaded guilty and agreed to testify in court against Atilla. Zarrab confessed that he had bribed senior Turkish ministers and top Halkbank executives. He even implicated Erdogan in the corruption scheme, stating that Erdogan had personally approved the illegal actions.
“Halkbank’s Atilla received a 32-month prison sentence in May 2018, a significantly shorter one than prosecutors had originally sought,” according to Erdemir and Kowalsky. “After Atilla’s return to Turkey, Erdogan rewarded the convicted sanctions buster by appointing him CEO of the Istanbul stock exchange, following the president’s established pattern of rewarding other senior accomplices of Zarrab with cushy appointments.”
Erdogan personally appealed to Pres. Trump and other senior officials to block the court case of Halkbank, claiming that US courts have no right to try Turkish citizens. The Courthouse News Service reported that “One of Zarrab’s shell companies, Royal Holding A.S., listed its address as a 35th floor unit in Trump Towers Istanbul. Before pleading guilty to money laundering, sanctions evasions and bribery, Zarrab retained Trump’s personal attorney Rudy Giuliani to lead a campaign of shadow diplomacy that echoed the one in Ukraine. Shuttling between Turkey’s capital of Ankara and the White House, Giuliani met with Erdogan, Trump, former Secretary of State Rex Tillerson, and other senior U.S. and Turkish officials in an attempt to negotiate a prisoner swap. The New York Times reported that Tillerson resisted the White House pressure for a deal that would have effectively killed the Zarrab case.”
Erdogan’s and Giuliani’s efforts succeeded in stalling the prosecution for almost two years, but ultimately failed when the U.S. Attorney’s Office for the Southern District of New York went forward with the charges last October.”
Senator Ron Wyden, the Senate Finance Committee’s top Democrat, told Courthouse News Service: “It sure looked like Donald Trump was doing the bidding of Erdogan and Giuliani, and there were real questions about whether this was about getting Halkbank off the hook, even though there were allegations that they were orchestrating the largest sanctions evasion scheme in history.”
During President Trump’s Senate impeachment inquiry earlier in 2020, Senators Wyden, Robert Menendez and Sherrod Brown asked a joint question which was read aloud in the Senate by Chief Justice John Roberts: “Has the president engaged in a pattern of conduct in which he places his personal and political interests on top of the national security interests of the United States?”
Wyden told Courthouse News Service: “Donald Trump has significant financial interest in Turkey,” referring to Trump Towers Istanbul. “We read regularly that his family has forged personal relationships with important Turkish officials. And so, you have to ask — which is what is part of our inquiry — whether the Trump policy toward Turkey is in a significant way colored by his personal and political interests and not the national security of the country.” If Halkbank is found guilty of violating U.S. sanctions, the court could impose a hefty penalty, regardless of Tump’s wishes.
April 3, 2014
By Hagop Koushakjian
The March 21 attack on the historic Armenian coastal town of Kessab was a shock to the Armenian nation worldwide.
Kessab seemed a peaceful, sleepy town far removed from the Syrian civil war that has been raging for the past three years. Then, early on Friday morning, the majority Christian Armenian populated town awoke to the sounds of rockets and gunfire, forcing 670 Armenian families to flee in haste to nearby Latakia, leaving behind the sick and the elderly. From what we know now, the town was attacked by Al-Qaeda related Al-Nusrah Front Islamist terrorists that crossed the Turkish border with the support and approval of the Turkish authorities. Turkey’s role was clearly evidenced by the fact that the Turkish military shot down a Syrian fighter jet that was providing air support to the regime’s forces. The downing emboldened the jihadists to carry out their raid on Kessab Armenians.
So why was Kessab a target and why now?
Armenian President Serzh Sargsyan’s decision on September 3, 2013 to join Russia’s Customs Union instead of the EU Eastern Partnership, after two years of negotiations, was not welcome news to the West. Then the referendum in Crimea to have that region join with Russia was assessed positively by Yerevan, hailing the self-determination right of the regions Russian majority. Then on March 27, the UN General Assembly voted 100 to 11 on a non-binding resolution declaring the Crimean referendum invalid. Armenia, considering the Karabakh factor, was among the 11 nations. In addition, the Republic of Armenia has developed close economic ties with Iran offsetting the 20-year blockades of Turkey and Azerbaijan.
All this was viewed negatively by the West, it appears, prompting US Ambassador to Armenia John Heffern to call Armenia’s UN vote “regrettable.” James Warlick, the US representative at the OSCE Minsk Group, also voiced his displeasure for Armenia’s pro-Russian stand vis-à-vis Ukraine. Taken together, this latest move on Crimea seems to have irritated the US. It is as though Armenia has crossed a red line.
On March 29 the US State Department called last week’s unprovoked attack on innocent Armenian civilians “deeply troubling.” Deputy spokesperson Marie Harf said, “we have seen some statements by groups fighting in Kessab saying they will not target civilians and will respect minorities and holy places. We expect those commitments to be upheld.” Interestingly, spokesperson Harf was careful not to use the word “terrorists” when referring to the foreign fighters that attacked Kessab. She referred to them as “groups,” downplaying the terrorist element of the attackers.
The Syrian civil war is ground zero for the latest East vs. West international proxy war and it is well known that NATO member Turkey is providing Al-Qaeda terrorists and other foreign fighters with arms, medical supplies and safe border access to Syria. Which begs the question, is the West calling the shots in Kessab while offering assurances that these jihadist butchers will respect minorities and their holy places of worship?
Kessab is located in the far northwestern part of Syria with no military strategic significance.
Which brings us back to the question, why Kessab, why now? It can easily be argued that Kessab was the price the Armenian nation had to pay for their close ties with Russia and Iran.