Ex-Treasury Official Bolsters U.S. Case in Turkish Bank Trial
Cohen recounts his meetings designed to reinforce sanctions
Turkish bank had unique position amid crackdown on Iran
A former senior Treasury Department official told jurors he was told repeatedly by executives at Turkiye Bank Halkasi AS they were complying with U.S. economic sanctions on Iran.
One of those officials, Mehmet Hakan Atilla, a deputy general manager at the government-owned Turkish bank, is on trial for money laundering and sanctions evasion for allegedly helping Iran access billions of dollars from overseas oil sales when they should have been off limits. His trial will continue Dec. 11 in federal court in Manhattan.
His former co-defendant, gold trader Reza Zarrab, pleaded guilty and testified over seven days on the witness stand to a vast scheme to help Iran evade the sanctions, with crucial portions of the effort happening within Halkbank with the aid and knowledge of Atilla.
Prosecutors on Friday called David S. Cohen, an under-secretary in the Obama administration who oversaw Treasury’s sanctions enforcement unit, to testify that he sought assurances of compliance from Atilla and others. They’re seeking to show that Atilla lied to the Treasury Department in an effort to conceal the scheme.
Cohen said he held meetings with Halkbank executives in Washington and Turkey, and exchanged calls and correspondence multiple times, to explain the sanctions and express concern about Iran’s attempts to circumvent them. Each time, he said, the executives told him they were following the rules.
They assured us repeatedly they had robust compliance programs in place and made efforts to know who their customers were," Cohen said.
Under cross-examination by Atilla’s lawyer, Victor Rocco, Cohen said the meetings with bank executives didn’t include lawyers or translators. He said he didn’t specifically recall whether he told the executives that violations of certain sanctions carried criminal penalties.
He also said Treasury never placed Zarrab on its sanctions list, nor warned Halkbank that it was violating sanctions. That may aid Atilla’s lawyers seeking to argue that he didn’t know the transactions were illegal and didn’t intend to break the law.
As the U.S. ratcheted up its sanctions against Iran in 2012 and 2013 in retaliation for its nuclear ambition, Iran became increasingly desperate to obtain gold as a means of supporting its flailing currency, the rial. During that time, Turkish gold exports to Iran boomed.
Falling Currency
That sparked the concern of U.S. officials, who hoped the declining currency would force Iran to the bargaining table on a nuclear deal. Halkbank was in an especially delicate position, as it had been designated by Turkey as the bank authorized to continue doing business with Iran, even under the sanctions.
Cohen said he found Halkbank’s responses reassuring, though concerns continued to mount as other indicators suggested that Turkey, and possibly Halkbank, were continuing to provide a lifeline to Iran.
Then, the day he landed in Turkey in December 2013 for another meeting with executives at Halkbank and other banks, Turkish officials announced the arrest of Zarrab, then-Halkbank general manager Suleyman Aslan and others in a bribery and corruption scheme. Cohen said the meeting didn’t take place. The Turkish investigation was later dismissed.
The case is U.S. v. Atilla, 15-cr-867, U.S. District Court, Southern District of New York (Manhattan).
By Christian Berthelsen
Turkish bank had unique position amid crackdown on Iran
A former senior Treasury Department official told jurors he was told repeatedly by executives at Turkiye Bank Halkasi AS they were complying with U.S. economic sanctions on Iran.
One of those officials, Mehmet Hakan Atilla, a deputy general manager at the government-owned Turkish bank, is on trial for money laundering and sanctions evasion for allegedly helping Iran access billions of dollars from overseas oil sales when they should have been off limits. His trial will continue Dec. 11 in federal court in Manhattan.
His former co-defendant, gold trader Reza Zarrab, pleaded guilty and testified over seven days on the witness stand to a vast scheme to help Iran evade the sanctions, with crucial portions of the effort happening within Halkbank with the aid and knowledge of Atilla.
Prosecutors on Friday called David S. Cohen, an under-secretary in the Obama administration who oversaw Treasury’s sanctions enforcement unit, to testify that he sought assurances of compliance from Atilla and others. They’re seeking to show that Atilla lied to the Treasury Department in an effort to conceal the scheme.
Cohen said he held meetings with Halkbank executives in Washington and Turkey, and exchanged calls and correspondence multiple times, to explain the sanctions and express concern about Iran’s attempts to circumvent them. Each time, he said, the executives told him they were following the rules.
They assured us repeatedly they had robust compliance programs in place and made efforts to know who their customers were," Cohen said.
Under cross-examination by Atilla’s lawyer, Victor Rocco, Cohen said the meetings with bank executives didn’t include lawyers or translators. He said he didn’t specifically recall whether he told the executives that violations of certain sanctions carried criminal penalties.
He also said Treasury never placed Zarrab on its sanctions list, nor warned Halkbank that it was violating sanctions. That may aid Atilla’s lawyers seeking to argue that he didn’t know the transactions were illegal and didn’t intend to break the law.
As the U.S. ratcheted up its sanctions against Iran in 2012 and 2013 in retaliation for its nuclear ambition, Iran became increasingly desperate to obtain gold as a means of supporting its flailing currency, the rial. During that time, Turkish gold exports to Iran boomed.
Falling Currency
That sparked the concern of U.S. officials, who hoped the declining currency would force Iran to the bargaining table on a nuclear deal. Halkbank was in an especially delicate position, as it had been designated by Turkey as the bank authorized to continue doing business with Iran, even under the sanctions.
Cohen said he found Halkbank’s responses reassuring, though concerns continued to mount as other indicators suggested that Turkey, and possibly Halkbank, were continuing to provide a lifeline to Iran.
Then, the day he landed in Turkey in December 2013 for another meeting with executives at Halkbank and other banks, Turkish officials announced the arrest of Zarrab, then-Halkbank general manager Suleyman Aslan and others in a bribery and corruption scheme. Cohen said the meeting didn’t take place. The Turkish investigation was later dismissed.
The case is U.S. v. Atilla, 15-cr-867, U.S. District Court, Southern District of New York (Manhattan).
By Christian Berthelsen
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