Turkish Banker Sentenced to 2.5 Years in Iran Sanctions Case

MANHATTAN (CN) – Calling the Turkish banker a “cog in the machine” of sanctions evasion, a U.S. federal judge sentenced Halkbank manager Hakan Atilla on Wednesday to prison term of less than three years for helping launder billions to Iran.

“So, let me start by welcoming you all here and mentioning at the outset that this is something of an exceptional sentencing proceeding in the sense, among others, that in addition to U.S. citizens who generally follow our cases, there no doubt are large number of Turkish citizens who are also very interested in and are following these proceedings,” U.S. District Judge Richard Berman said as the three-hour hearing kicked off this morning.

Mehmet Atilla, right, testifies on Dec. 15, 2017, during his trial on corruption charges in New York. The Turkish banker accused of helping Iran evade U.S. sanctions has been convicted by a jury in New York after a trial that sowed distrust between the two nations. A jury convicted Atilla of five counts, including conspiracy, but acquitted him of one money-laundering charge. (Elizabeth Williams via AP, File)

Watched intensely from New York to Istanbul, the proceedings ended with a likewise extraordinary 32-month sentence, a prison term lower than what prosecutors or even defense attorneys requested.

That means Atilla will spend roughly a year and a half more in prison, after deducting time the 47-year-old already served at New York’s Metropolitan Correctional Center since his arrest last year.

A former manager at Turkey’s state-run Halkbank, Atilla was convicted by a federal jury in January for helping funnel billions to Iran in violation of U.S. sanctions.

During trial last year, prosecutors labeled Atilla an “architect” of two schemes to accomplish this.

Rejecting that notion today, Berman said that Atilla’s Halkbank boss Suleyman Aslan and gold trader Reza Zarrab far eclipsed his role.

 “Mr. Atilla appears less culpable, certainly than Zarrab, and Mr. Atilla appears to have been following orders in large measure from his boss, Mr. Aslan, who was the general manager of Halkbank at the relevant times,” the judge said.

Zarrab, a former ally of Turkish President Recep Tayyip Erdogan, pleaded guilty shortly before trial and delivered days of testimony that infuriated Ankara and turned him into a persona non grata in Turkey.

The gold trader still awaits sentencing on a date to be determined.

Berman’s comments appeared to stun Assistant U.S. Attorney Michael Lockard, who had sought a more than 15-year sentence.

“This is the biggest sanctions-evasion case prosecuted in the United States that we’re aware of,” Lockard said, sounding dispirited by the judge’s opening remarks.

“The scope and scale is massive,” he added.

Prosecutors believed that these sanctions violations helped Iran at the heart of negotiations over the nuclear deal known as the Joint Comprehensive Plan of Action.

“This is not a case about drugs, it’s not a case about shipments of weapons,” Lockard said. “But it is, in a very real sense, a case about nuclear capability. Nuclear capability by the world’s foremost state sponsor of terrorism.”

But the prosecutor’s strong words did not match a voice and demeanor that were otherwise listless, and with good reason.

By then, Judge Berman already had rejected the prosecution’s depiction of Atilla’s role and revealed that his sentence would be “appropriately lenient.” The judge praised the “exemplary life” that he said Atilla lived prior to his criminal offenses, and he held up a stack of 101 letters from Atilla’s family, friends and colleagues attesting to the banker’s character.

“Atilla appears to have been a person doing his job, sometimes reluctantly or hesitatingly, under the direction of the Halkbank general manager Mr. Aslan, who did take bribes,” Berman said.

Alsan, who has been indicted for more than a year, remains at large.

Berman’s remarks echoed arguments that Atilla’s defense attorney Victor Rocco made throughout last year’s trial.

“You stole my thunder, judge,” Rocco said today. “And I learned a long time ago, at least I hope I learned a long time ago, that the art of litigation is the art of knowing when to shut up.”

“But, I do say, if I may, judge, that one of the things that I was going to say in the lengthy presentation here this morning that I’ve abandoned is that what we need to show the world in proceedings such as this, especially today, especially now, is that we Americans aren’t bullies,” Rocco said. “That we are a generous and compassionate people. That although we are a nation of laws, justice is tempered by mercy. Our judges are as courageous as they are just, and as compassionate as they are wise.”

Many in Turkey looked on to see whether diplomatic negotiations between Washington and Ankara would affect today’s proceedings. The Turkish government tried to avert the trial by pushing two U.S. administrations to release Zarrab, who recruited two top allies of President Donald Trump to engage in quasi-diplomatic negotiations: former New York City Mayor Rudy Giuliani and ex-U.S. Attorney General Michael Mukasey.

In the end, Rocco noted, U.S. justice did not bend to political pressure.

“You have reflected, I think, a deep understanding of what happened here,” Rocco said. “And we ask you in imposing sentence, to understand that Mr. Atilla’s never sought any special treatment, there has been no political interference. Plainly, nobody’s ever offered to do anything for him.”

Berman went to great lengths to ensure that today’s proceedings would be widely viewed in Turkey, ordering that English and Turkish transcripts be made available to the public.

Atilla began his remarks by mentioning the holiday being widely celebrated back in his home country.

“Today is the first day of the holy month of Ramadan,” Atilla wrote in prepared remarks read by attorney Cathy Fleming. . “Ramadan is a period where the virtues of patience, sacrifice, leniency, mercy, and compassion are heavily felt.”

Far away from his wife, son and aging parents, Atilla pleaded for a quick return to his family.

“In this past year, I have learned many new things, and what I used to consider as a priority, has now profoundly changed,” Atilla said. “Now apart from my family, I have no other priorities.”

The Turkish government has fulminated about Zarrab and Atilla’s cases, labeling them an attempted “judicial coup” on Erdogan.

A former Erdogan ally turned state enemy, Zarrab tendered an eleventh-hour guilty plea before trial that led to his dramatic testimony in New York.

On the stand, Zarrab implicated both Erdogan in directing sanctions-busting trades and top officials at Erdogan’s ruling Justice and Development Party in accepting millions of dollars in bribes.

Such testimony could have wide ramifications in Turkey if U.S. financial regulators slap Halkbank with a fine that can roil the country’s economy.

Turkish government officials vilified the participants in the U.S. court proceedings, with the state news media labeling Berman, prosecutors and even reporters pawns in an elaborate conspiracy by Islamic preacher Fethullah Gulen, a former Erdogan ally turned state enemy.

“Indeed, it is very difficult to reconcile the collaborative, polite, informative kind and generous letters of support for Mr. Atilla from ordinary Turkish citizens with the sometimes very harsh rhetoric from Turkish government officials about this case,” Berman said.

Berman has ridiculed those conspiracy theories in the past, and he said that letters that he received from regular Turkish people expressed confidence in U.S. justice.

 

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