U.S. Indicts Turkey’s Halkbank for Illegal Transfer of Billions of Dollars to Iran
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.
BREAKING NEWS: Armenian Genocide Resolution Today in the US Senate
Armenian Genocide Resolution in the Senate:
Senators Bob Menendez (D-NJ) and Ted Cruz (R-TX) will request Unanimous Consent to consider the Armenian Genocide Resolution, S.Res.150. Tune in to C-SPAN at approx. 1:00 p.m. EST to watch the Senate Floor live.
Florida Senator Marco Rubio (R-FL) is a cosponsor of S. Res. 150. However, Senator Rick Scott (R-FL) is NOT. Call Sen. Rick Scott’s DC Office NOW (202) 224-5274 and urge him to cosponsor the bill and to vote YES should it come up for a vote!
Now is the time to call your Senators and urge them to support S.Res.150!
Quick Facts about the Armenian Genocide Resolution in the Senate:
- Senator Bob Menendez introduced the Armenian Genocide Resolution, S.Res.150, on April 9, 2019.
- Including Senator Menendez, a total of 29 Senators have co-sponsored the resolution. Who else has co-sponsored?
- Following the historic and overwhelming bipartisan vote in favor of H.Res.296 in the House of Representatives, the the Armenian American community pressed for passage of the stand-alone Senate resolution on the Armenian Genocide.
- On November 13, Senator Bob Menendez requested Unanimous Consent to consider S.Res.150. Senator Lindsey Graham (R-SC) objected, following a meeting earlier that day with Turkish President Erdogan at the White House. Florida Senator Rick Scott was also in the Oval Office meeting with Erdogan.
- On November 21, Senator Bob Menendez requested Unanimous Consent again to consider S.Res.150, and was joined by Senator Ted Cruz. Senator David Perdue (R-GA) objected, citing “ongoing diplomatic relations with Turkey.” Senator Menendez vowed not to relent.
- Today, December 5, Senators Bob Menendez and Ted Cruz will once again request Unanimous Consent to consider S.Res.150 at approximately 1:00 PM EST.
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Fox News’ Devastating Attack On Turkey, President Erdogan
By Harut Sassounian
As the conflict between Turkey and United States is heating up, Turkish President Recep Tayyip Erdogan is too stupid to realize that by continuing to hold American Pastor Andrew Brunson on trumped-up charges, he is undermining Turkey’s economy and its membership in NATO. Any other intelligent Turkish leader would have released Pastor Brunson a long time ago and maintained military and trade relations with the United States. Even though the Turkish government is paying millions of dollars a year to hire high-powered American lobbying and public relations firms, none of them can protect Turkey’s reputation from Erdogan’s erratic behavior.
Every time he opens his mouth and takes an inept action, Erdogan further damages Turkey’s relations with other countries, reminding the world and reinforcing the long-established image of the “Barbarian Turk.” Here is an example of the negative PR generated by Erdogan against his own country in the American media. Lisa “Kennedy” Montgomery on Fox News Business TV, President Trump’s favorite channel, delivered the following devastating attack against Pres. Erdogan on August 16, 2018. In addition to millions of Americans who watched her commentary on TV, 662,000 others saw it on Facebook and many more on Twitter. Kennedy even mentioned the Armenian Genocide, as a way of getting back at Turkey.
“How do I despise thee Erdogan? Let me count the ways. The Turkish president is putting his country in a diplomatic pickle by refusing to free an American Pastor over ‘terrorism charges.’ The fake crime is a bunch of hot malarkey, a rancid plate of Turkish non-delight; and although Erdogan has been concentrating his power to fake elections, imprisoning journalists, and purging academics, he didn’t bet that he would be strong-armed by another strong man. Our president has had it up to his eyeballs with Turkey trolling, and instead of empty words, President Trump is offering a full-throttled digital slap to Erdogan, tweeting: ‘I have just authorized a doubling of Tariffs on Steel and Aluminum with respect to Turkey as their currency, the Turkish Lira, slides rapidly downward against our very strong Dollar! Aluminum will now be 20% and Steel 50%. Our relations with Turkey are not good at this time!’”
Kennedy continued her criticism by stating: “When were they [relations with Turkey] ever good? The Turkish government is a disgrace, and past administrations have either coddled them or sat idly by while they’ve rolled out the welcome mat and threw the door open for ISIS, all while cozying up to Russia. This is not our strategic partner. This is a corrupt, murderous regime that should be kicked out of NATO for a host of human rights violations, not to mention deep kissing the Russians who are supposedly the biggest regional threat. Now, sure, there have been counter-threats. Now Erdogan is saying he will pull the iPhone off the market as if the people there can use the device to mobilize, enrich themselves or seek freedom from a murderous regime that wants total control, and is willing to tank the global economy to prove a childish point! And while we are at it, and while the president [Trump] is hot under the collar, if he really wants to make his new party pal Kim Kardashian happy, he should officially, and once and for all, acknowledge the Armenian Genocide which was not ‘an issue’ or ‘a series of unfortunate events,’ but a cold-blooded slaughter of 1.5 million people whose memory will not be erased by any Napoleonic nincompoop. Release Pastor Andrew Brunson, President Erdogan, and fear [Pres. Trump’s National Security Advisor John R. Bolton’s] mustache [as] Bolton is mongering, so for the sake of world peace put up and shut up so you don’t get blown up!”
To make matters worse for Erdogan, President Trump told American journalists on August 17, 2018: “Turkey has been a problem for a long time. They have not acted as a friend. We will see what happens. They have a wonderful Christian pastor. He is a wonderful man, Pastor Brunson. They made this phony charge that he is a spy, and he is not a spy. He is going through a trial right now, if you call it a ‘trial.’ They should have given him back a long time ago. And Turkey has, in my opinion, acted very, very badly. So we have not seen the last of that. We are not going to take it sitting down. They can’t take our people. So you will see what happens!”
Before Armenians get too impressed with President Trump’s threatening words, they must remember that despite Turkey’s anti-U.S. and anti-NATO policies for several decades, the West has kept heaping praises on Turkish leaders. No one in the West has had the guts to put Turkey in its place. If tomorrow, the unpredictable Erdogan releases Pastor Brunson, I am afraid President Trump will start praising Erdogan once again, as he has done with Kim Jong Un of North Korea and Vladimir Putin of Russia.
President Trump should not forget that in addition to holding Pastor Brunson, Turkey invaded and occupied Northern Cyprus in 1974, banned the crossing of American troops into Northern Iraq from Turkey during the Iraq War, attacked the Kurdish allies of the United States in Northern Syria, is planning to purchase the Russian S-400 missile system contrary to NATO’s admonition, helped circumvent U.S. sanctions on Iran, and supported the entry of ISIS terrorists to Syria from Turkey. Even after Pastor Brunson is liberated, Turkey should not be forgiven for its many indiscretions. As numerous analysts have recently suggested, Turkey should be immediately kicked out of NATO.