Feds Denounce Gamesmanship in Halkbank Sanctions Case

MANHATTAN (CN) – Call it Schrödinger’s prosecution.

Attorneys for a bank charged with the biggest money-laundering scheme to Iran ever alleged in a U.S. court, asserted before a federal judge Tuesday that their Turkish state-run client would not recognize the proceedings.

“My purpose is to make sure that nothing we do or say can be construed as accepting jurisdiction,” King & Spalding attorney Andrew Hruska said as proceedings kicked off this morning in New York’s Southern District.

Hruska requested a “special” appearance to seek the dismissal of the case against Halkbank on jurisdiction and to seek the judge’s recusal, but he emphasized that the bank would not commit to appear in court if it loses the motions.

U.S. District Judge Richard Berman described the request as a “heads I win, tails you lose” proposition.

“That’s sort of crazy, isn’t it?” the judge added.

Assistant U.S. Attorney Michael Lockard told the judge that the bank clearly received service of the indictment. Prosecutors sent notice by FedEx to Halkbank’s attorneys in Washington and the bank’s legal department in Istanbul, which responded with a handwritten note denying delivery.

“There’s certainly an air of gamesmanship here,” Lockard said. “None of us are aware of any legal authority for that prospect.”

Judge Berman saw little reason to permit motions from a defendant in a case that it otherwise will not commit to acknowledging.

“Why would any court do that?” he asked. “Why would that make sense?”

Berman hastened to add that a person indicted for a crime might fear arrest if appearing in court.

“But this is a corporation,” the judge noted. “Nobody is going to jail in a case like that.”

To call the requested special appearance unusual would be an understatement.

When asked to provide a Second Circuit precedent for such a proceeding, Halkbank’s attorney acknowledged that he did not have one and instead offered a citation from the California-based Ninth Circuit.

“Who cares?” Berman asked, noting that is not their jurisdiction.

King & Spalding, a white-shoe law firm that once employed FBI Director Christopher Wray, has been representing Halkbank since late 2017, the year it briefly registered as an agent of the Turkish foreign ministry. The firm tried and failed to delay the trial of former Halkbank manager Hakan Atilla, who was convicted for his role in evading billions of dollars in anti-Iran sanctions.

Backed by politically connected U.S. law firms, Halkbank managed to escape prosecution for more than a year since Atilla’s trial, until its indictment last month.

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