MANHATTAN (CN) – Turkish national Hakan Atilla may be the first foreign banker prosecuted for violating sanctions against Iran, but prosecutors told a federal judge Wednesday that his unprecedented scheme should not be rewarded with light prison time.
“The defendant’s offenses are in some respects without parallel, and the immense risks that he and his co-conspirators created to the national security of the United States and to the safety and stability of the entire globe are similarly without ready comparison,” Assistant U.S. Attorney Michael Lockard wrote in a 64-page brief.
Demanding more than 15 years imprisonment and up to $500,000 in fines for Atilla, Lockard’s sentencing memorandum contends that Atilla’s scheme undermined sanctions at the moment that United States hoped to maximize pressure over Iran’s nuclear program.
“At a time when the United States and the community of nations were engaged in the momentous undertaking of depriving the government of Iran of funding for its malign and deadly activities—including its pursuit of nuclear weapons, and ballistic missiles capable of delivering those weapons throughout the region and around the world; and its financial, logistical, and military support for terrorist organizations and acts of terrorism — Atilla was a key player in massively undermining those efforts,” Lockard wrote.
Atilla’s attorneys Victor Rocco and Cathy Fleming emphasized in their own memo last week that the U.S. sanctions were received as “controversial” in Turkey, which shares a border with Iran.
Turkish President Recep Tayyip Erdogan, who was implicated but not charged in sanctions evasions, has defended his country’s right to trade with its neighbors.
“We did not violate the [U.S.] embargo,” Erdogan said in a press statement, after a New York witness accused him of ordering the illicit transactions in November.
“Whatever happens in trial we did the correct thing,” Erdogan said at the time. "We did not have such an commitment to U.S. The world does not consist of the U.S. alone.”
Though the banker’s defense team has cast Atilla as a lowly civil servant, trapped in between international wrangling by major powers, Wednesday’s memo by prosecutors rejects this portrayal.
No hapless “functionary,” according to the government’s brief, Atilla “played a critical role in the design” of a complicated system of funneling billions to Turkey’s neighbor through fake gold trades and sham humanitarian aid.
After a jury here convicted Atilla of fraud, conspiracy and sanctions violations, the Bureau of Prisons recommended that the father of one face life imprisonment.
Atilla’s attorneys on the other hand have called that demand “draconian,” as well as “stupefyingly unreasonable and unjust.” Seeking a sentence that “temper[s] justice with mercy,” they urged U.S. District Judge Richard Berman last week to sentence Atilla to less than four years behind bars.
Noting that their client is diabetic, and far from his wife in family during his presentencing lockdown at New York’s Metropolitan Correctional Center, the brief also notes that Atilla has “suffered physically and emotionally.”
Whatever the outcome of Atilla's reckoning on April 11, U.S.-Turkish relations may never be the same.
Atilla’s arrest cast a spotlight on the Turkish government’s role in a massive money-laundering scheme. The role of Turkey’s state-run Halkbank in the scheme will likely place it under scrutiny by U.S. regulators, and the bank’s former CEO Suleyman Aslan remains under federal indictment.
Multiple witnesses against Atilla testified that Erdogan, who was prime minister at the time, signed off on the sanctions-busting trades in 2012, while multiple high-ranking ministers – including former economy minister Zafer Caglayan – took millions of dollars in payoffs to look the other way.
These revelations echoed those of a corruption scandal that rocked Turkey in 2013, leading Istanbul prosecutors to charge Erdogan’s allies with bribery. Erdogan quickly dismantled the probe, purging dozens of detectives, prosecutors and judges involved in what he labeled a “judicial coup.”
For the trial of Atilla last year, the U.S. government’s star witness was gold trader Reza Zarrab, a wealthy businessman formerly allied with Erdogan and married to Turkish pop star Ebru Gundes.
Zarrab’s cooperation with the U.S. government made him a persona non grata in Turkey, leaving his family and social circle marked for espionage prosecution.
While Atilla’s attorneys blamed Zarrab for the scheme, U.S. prosecutors claim that neither man is innocent.
“Atilla’s offenses simultaneously opened a multibillion-dollar channel of illicit funding for the Government of Iran and relieved crucial financial pressure on Iran during negotiations to limit its nuclear program,” Wednesday’s memo states.
“The effects of these crimes did not fall particularly on any victim or class of victims, but instead are suffered by every single citizen and resident of this nation and, indeed, the world, whose safety and security were compromised by Atilla’s emboldening of, and support for, Iran during the critical phases of the nuclear negotiations,” the brief continues.
The scheme for which Atilla was convicted occurred before former President Barack Obama implemented the Joint Comprehensive Plan of Action, better known as the Iran nuclear deal, in 2016.
Prosecutors claim that the money-laundering scheme gave Iran an edge on its negotiations with the United Nation Security Council’s permanent five nations plus Germany.
“It was precisely during this critical time-frame that Atilla and his co-conspirators’ monumental sanctions-busting scheme was in full swing, providing Iran access to billions of dollars’ worth of desperately needed funds for its banking system and the [Iran Revolutionary Guard Corps]-linked [national oil companies], including hundreds of millions of dollars routed through the U.S. financial system, and to alleviate the very financial pressure that induced the regime to negotiate its nuclear program,” their memo states.
The United States, United Kingdom, France, German, Russia, China and Iran signed an interim agreement in 2013, when trial evidences showed that the system of fake gold trades and humanitarian aid was being designed and executed.
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