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MANHATTAN (CN) — The United States government’s lengthy prosecution of Turkish state-run lender Halkbank formally concluded Wednesday morning with a New York City federal judge greenlighting a deal that dismisses all decade-old criminal charges implicating the foreign bank in a money-laundering scheme funneling billions to Iran.
Federal prosecutors had accused Halkbank in a criminal indictment of using illegal shipments of gold and fake food to send $20 billion to Iran while lying to the Treasury Department to hide at least $1 billion in illicit payments that made their way through the U.S. financial system.
“This is a case that has universally great public interest,” U.S. District Judge Richard Berman said Wednesday during a brief hearing that formally put the criminal prosecution to rest.
Berman, a Bill Clinton appointee, said the case, which dates back to a December 2015 indictment, had been “been very intensely litigated,” and thanked for both sides for ultimately reaching a resolution that “is agreeable to all of the parties that are present.”
Assistant U.S. Attorney Michael Lockard acknowledged that the deferred prosecution agreement with the Turkish bank arose from “multilateral efforts in 2025” involving the Turkish government’s substantial diplomatic assistance in brokering the Israel-Hamas ceasefire, negotiating the release of hostages and returning victims’ remains after the Oct. 7, 2023, attacks in Israel.
“In the State Department’s view, a commitment by the United States to resolving the Halkbank matter on mutually agreeable terms was an important component of those diplomatic discussions,” federal prosecutors wrote in a declaration signed by U.S. Attorney Jay Clayton.
Signing off on the deferred prosecution agreement was one of Clayton’s final official acts in the Southern District of New York before he was tapped by President Donald Trump last week to be appointed director of national intelligence.
Pursuant to the deferred prosecution agreement, Halkbank hired the Turkish affiliate of international accounting firm Ernst & Young to conduct a review of the bank’s compliance with finance laws and international sanctions.
Yiğit Deniz Bulutlar, a corporate investigator at Ernst & Young, said at Wednesday’s hearing that Halkbank fully cooperated with the firm’s compliance review, and affirmed the review did not find any illegal money laundering or noncompliance with sanctions.
Reza Zarrab, a key cooperating witness in the U.S. government’s criminal investigation into Halkbank’s purported role in helping Iran evade sanctions, is scheduled to be sentenced next month on July 14, nearly nine years after he pleaded guilty.
Zarrab, a Turkish-Iranian gold trader and former ally of Turkish President Recep Tayyip Erdogan, became the U.S. government’s star witness in the criminal trial of ex-Halkbank manager Hakan Atilla after pleading guilty shortly before trial.
In his trial testimony, Zarrab implicated the most powerful politicians and financiers in Turkey in his financial crimes. He testified that Erdogan personally directed illicit trades in 2014 while serving as the country’s prime minister.
Following Zarrab’s arrest in 2016, the Turkish government aggressively lobbied two successive U.S. administrations, making inroads with the Trump White House, to kill the prosecution.
Trump’s former personal attorney Rudy Giuliani counted Zarrab as a client in 2017 when the former New York City mayor shuttled between Turkey’s capital of Ankara and the Oval Office to negotiate a prisoner swap that would have scuttled the case.
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