Second Circuit Advances Criminal Case Against Halkbank

MANHATTAN (CN) — Advancing a case that has been a thorn in the side of the Trump administration, the Second Circuit refused Friday to let Turkey’s state-run Halkbank delay its arraignment on record-breaking money-laundering charges.

Since its indictment in October, Halkbank has balked at appearing in the New York court where it is accused of helping to illicitly funnel billions in Iranian oil money into the global market. The Turkish government-controlled bank has insisted upon a special proceeding to attack the legitimacy of its prosecution without appearing in court.

Now two levels of U.S. courts have found it is not entitled to one.

“If Halkbank wishes the district court to decide its jurisdictional motion, this international bank holds the key to unlock its dilemma: travel to New York and answer the charges or have its legal counsel do so,” U.S. District Judge Richard Berman wrote in December.

A three-judge panel of the Second Circuit upheld that ruling today in an unceremonious 2-page order.

Though unsuccessful in court, Halkbank appears to have found more luck lobbying the Trump administration to advocate upon its behalf. Trump’s personal attorney Rudy Giuliani formerly served as counsel to Reza Zarrab, a gold trader who pleaded guilty in 2017 to spearheading the conspiracy.

Zarrab’s shell company Royal Holdings listed its address in Trump Towers Istanbul, a building branded — though not owned — by the president of the United States.

Presiding over the Zarrab and Halkbank cases, Judge Berman has written about the “extraordinary, sustained series of Turkey-initiated state to state meetings, contacts, and involvements began — outside the courtroom — between and among Turkish and U.S. officials, lobbyists and attorneys.”

Oregon Senator Ron Wyden, the top Democrat on the Senate Finance Committee, continues to investigate the Trump administration’s meddling in the case and has extracted concessions from Treasury Secretary Steven Mnuchin, who disclosed meetings with top Turkish officials discussing the Halkbank case.

More than a dozen other Democratic senators have announced investigations into the president’s financial conflicts of interest involving Trump Towers Istanbul and Giuliani’s advocacy in the Zarrab case, which involved a campaign of shadow diplomacy in Turkey’s capital of Ankara and a reported Oval Office meeting with Trump and then-Secretary of State Rex Tillerson.

The case against Halkbank sparked even a larger firestorm in Turkey, where it connects to a 2013 corruption scandal.

A little more than two years ago, Zarrab implicated Turkish President Recep Tayyip Erdogan in the illicit trades. The gold trader testified in New York that he bribed top officials of Erdogan’s ruling Justice and Development Party.

Halkbank’s indictment also accuses Erdogan’s son-in-law Berat Albayrak of participating in the scheme, though federal prosecutors have not formally charged Albayrak in the conspiracy.

Mnuchin disclosed meeting with Kushner, Trump and Albayrak in the Oval Office on April 15 last year.

Halkbank’s next hearing is scheduled to take place on Tuesday, where the bank could face millions in penalties if found in contempt for refusing to appear.

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