A former Turkish government minister and senior executives of state-owned Halkbank were charged with conspiring to launder hundreds of millions of dollars through the U.S. financial system on behalf of Iran, while tens of millions of dollars in bribe payments were diverted to the official.
The new allegations Wednesday by federal prosecutors in New York expand on the prosecution of Turkish-Iranian trader and financier Reza Zarrab and Halkbank executive Mehmet Hakan Atilla, who were already scheduled to go on trial on Oct. 30. They’ve denied wrongdoing.
Zafer Çağlayan, former Turkish Economy Minister from Turkey’s ruling Justice and Development Party (AKP), has been included in the U.S. indictment regarding money laundering and illegal transactions for the Iranian government against the U.S. administration.
Turkey witnessed the 2013 corruption scandal, a criminal investigation involving key people and several ministers from the Turkish government, the director of Turkish state-owned Halkbank and Iranian businessman Reza Zarrab regarding the accusation of bribery, corruption, fraud, money laundering and gold smuggling.
Answering claims about being bribed by Iranian-born Azeri businessman Reza Zarrab, with a watch worth 700,000 Turkish Liras, Çağlayan had said he paid the entire sum himself even though the bill was not in his name.
“Zarrab bought the watch, but I paid for it. The guarantee certificate is in my name,” Çağlayan told deputies during his defence May 5, 2014.
Having been accused of a money-laundering scheme with regard to the transfer of gold and money to Iran via Turkey’s state-controlled Halkbank as a strategy to bypass the U.S.-led sanctions on Iran, several people including key governmental figures were detained in Turkey in 2013. Following the scandal that shook Turkey, several ministers resigned from their posts.
Turkish-Iranian Reza Zarrab, a key gold trader in the scheme, was arrested in March 2016 in the U.S. while Turkish Mehmet Hakan Atilla, a deputy general director of Turkish state-owned Halkbank, was arrested in March 2017 in the U.S. for conspiring with Zarrab to conduct illegal transactions on behalf of the Iranian government and other Iranian entities.
U.S. INDICTMENT ACCUSES FORMER TURKISH MINISTER OF BRIBERY
The U.S. Attorney’s Office Southern District of New York announced on September 6, 2017, the filing of a superseding indictment charging Mehmet Zafer Çağlayan (former Turkish Minister of Economy), Süleyman Aslan (former General Director of Halkbank), Levent Balkan (former Deputy General Director of Halkbank) and Abdullah Happani (Reza Zarrab’s partner).
According to the U.S. indictment, Çağlayan and others are accused of conspiring, lying, laundering and fraud to use the U.S. financial system to conduct hundreds of millions of dollars’ worth of transactions on behalf of the Government of Iran and other Iranian entities, which were barred by United States sanctions.
The indictment demands the term of imprisonment of 55 years in total for each defendant who is charged with conspiracies to defraud the United States.
TURKISH GOV’T RESPONDS TO U.S. INDICTMENT
Meanwhile, Turkey’s current Minister of Economy Nihat Zeybekçi talked to reporters on Sept. 7 about the related U.S. indictment regarding former minister Zafer Çağlayan.
“Çağlayan did not do anything against Turkey’s interests, what concerns us is the interests of Turkey. There are claims that the sanctions on Iran were violated, but those who make these accusations towards a Turkish minister are obliged to prove them,” Turkish Economy Minister Zeybekci said.
As the Turkish investigation of corruption in 2013 was extended to President Recep Tayyip Erdoğan’s family, Erdoğan blamed the investigation as an international conspiracy and a “judicial coup” orchestrated by the U.S. based Islamic preacher Fethullah Gülen’s organization against him and his AKP government.
