The U.S. Justice Department on Tuesday indicted Turkey’s second-largest bank on charges of fraud and money laundering, accusing it of helping Iran evade sanctions implemented to curb its nuclear program.
Halbank was reportedly involved in the largest Iran sanctions violation to date, sending billions of dollars in gold and cash to Iran in exchange for oil and gas.
“This is one of the most serious Iran sanctions violations we have seen, and no business should profit from evading our laws or risking our national security,” Assistant Attorney General for National Security John C. Demers said in a statement released by the Justice Department. The statement further alleged that senior Turkish government officials received tens of millions of dollars in bribes to hide the violations from U.S. regulators.
Earlier this month it was reported that Trump’s personal lawyer Rudy Giuliani in 2017 pushed then-Secretary of State Rex Tillerson to ask the Justice Department to drop a case against his client Reza Zarrab. An Iranian-Turkish gold trader who himself evaded Iran sanctions, Zarrab went on to testify against Halbank head of international banking Mehmet Hakan Atilla, who was convicted of helping Iran evade sanctions through money laundering and served 28 months in U.S. prison.
Zarrab had also alleged that Turkish President Recep Tayyip Erdogan knew of Atilla’s laundering operation, which Erdogan has denied.
The charges against Halbank came as the Trump administration is trying to negotiate its relationship with Turkey, which recently launched an invasion of northeastern Syria after Trump announced the withdrawal of U.S. troops from the region. The invasion is in part intended to combat Kurdish groups that Turkey considers terrorist organizations, some of which were instrumental in the U.S.-led fight against ISIS in Syria.