Turkish Banker Convicted Of Conspiring To Evade U.S. Sanctions Against Iran And Other Offenses
Unanimous Manhattan Jury Finds That the Defendant Also Used His Position at Turkish Bank to Facilitate Access to the U.S. Financial System and to Conceal International Financial Transactions for Iranian Entities in Violation of U.S. Sanctions
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and Dana J. Boente, Acting Assistant Attorney General for National Security, announced that MEHMET HAKAN ATILLA was found guilty today of conspiring with others, including Reza Zarrab, a/k/a “Riza Sarraf,” who previously pled guilty to evading U.S. sanctions among other offenses, to use the U.S. financial system to conduct transactions on behalf of the Government of Iran and other Iranian entities, which were barred by U.S. sanctions, and to defraud U.S. financial institutions by concealing these transactions’ true nature. The jury convicted ATILLA on five of six charges in the controlling indictment following a four-week trial before U.S. District Judge Richard M. Berman.
Acting U.S. Attorney Joon H. Kim stated: “Today, after a full, fair, and open trial, a unanimous jury convicted Hakan Atilla, a senior banker at Halk Bank. Along with the prior guilty plea of Reza Zarrab, two men at the heart of this massive and brazen scheme that blew a billion-dollar hole in the Iran sanctions regime now stand convicted of serious federal crimes. Foreign banks and bankers have a choice: You can choose willfully to help Iran and other sanctioned nations evade U.S. law, or you can choose to be part of the international banking community transacting in U.S. dollars. But you can’t do both. If you lie repeatedly to U.S. Treasury officials and fabricate documents – all as part of a secret scheme to smuggle billions of dollars in Iranian oil money past the U.S. sanctions net – as Atilla did, then you should be prepared for the consequences. The consequence of Atilla’s choice is now a felony conviction in an American court of law.”
Acting Assistant Attorney General Dana J. Boente stated: “For years, Mehmet Hakan Atilla conspired to use the American financial system to conduct millions of dollars’ worth of illegal transactions on behalf of the Government of Iran. He used his high rank at a Turkish bank to disguise the transactions as humanitarian food payments and deceive American officials, but now, after receiving due process of law, he has been held accountable in court, by an impartial jury. This successful prosecution is another example of our resolve to pursue and bring to justice those who violate our sanctions and other laws that protect our national security.”
According to the evidence introduced at trial, other proceedings in this case, and documents previously filed in Manhattan federal court:
Beginning in or about 1979, the President, pursuant to the International Emergency Economic Powers Act (the IEEPA), has repeatedly found that the actions and policies of the government of Iran constitute an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States and declared a national emergency to deal with the threat. In accordance with these presidential declarations, the United States has instituted a host of economic sanctions against Iran and Iranian entities. This sanctions regime prohibits, among other things, financial transactions involving the United States or United States persons that were intended for the Government of Iran or Iranian entities.
Specifically, ATILLA, Zarrab, and others used deceptive measures to provide access to international financial networks, including U.S. financial institutions, to the Government of Iran, Iranian entities, and entities identified by the Department of the Treasury Office of Foreign Assets Control as Specially Designated Nationals (“SDNs“). They did so by, among other things, using Halk Bank, at which ATILLA acted as Deputy General Manager of International Banking, to engage in transactions that violated U.S. sanctions against Iran. In particular, they took steps to protect and hide Zarrab’s supply of currency and gold to the Government of Iran, Iranian entities, and SDNs using Halk Bank, and in doing so, shielded the bank from U.S. sanctions. ATILLA, Zarrab, and others conspired to create and use false and fraudulent documents to disguise prohibited transactions for Iran and make those transactions falsely appear as transactions involving food, thus falling within humanitarian exceptions to the sanctions regime. As a result of this scheme, the co-conspirators induced U.S. banks to unknowingly process international financial transactions in violation of the IEEPA.
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Mehmet Hakan Atilla, 47, is a resident and citizen of Turkey. Atilla was convicted of conspiracies to defraud the United States, to violate the IEEPA, to commit bank fraud and to commit money laundering, as well as a substantive count of bank fraud. The conspiracy to defraud the United States count carries a maximum term of imprisonment of five years. The conspiracy to violate the IEEPA and money laundering conspiracy counts each carry a maximum term of imprisonment of 20 years. The bank fraud counts each carry a maximum term of imprisonment of 30 years. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. ATILLA is scheduled to be sentenced on April 11, 2018, before Judge Berman.
Zarrab, 34, also a resident and citizen of Turkey, pled guilty October 26, 2017, to one count of conspiring to defraud the United States, which carries a maximum sentence of five years in prison; one count of conspiracy to violate the IEEPA, which carries a maximum sentence of 20 years in prison; one count of bank fraud, which carries a maximum sentence of 30 years in prison; one count of conspiring to commit bank fraud, which carries a maximum sentence of 30 years in prison; one count of money laundering, which carries a maximum sentence of 20 years in prison; one count of conspiring to commit money laundering, which carries a maximum sentence of 20 years in prison; and one count of conspiring to bribe a U.S. public official and possessing contraband in a federal detention center, which carries a maximum sentence of five years in prison. Zarrab’s sentencing date has not been scheduled.
Mr. Kim and Mr. Boente praised the outstanding investigative work of the FBI and its New York Field Office, Counterintelligence Division.
Assistant U.S. Attorneys Michael D. Lockard, Sidhardha Kamaraju and David W. Denton, Jr., and Special Assistant U.S. Attorney Dean Sovolos of the Southern District of New York are in charge of the prosecution, with assistance from Deputy Chief Elizabeth Cannon and Trial Attorney David Recker of the National Security Division’s Counterintelligence and Export Control Section.