Turkish banker’s lawyer blames laundering on others at Halkbank

Bloomberg |Christian Berthelsen & Bob Van Voris: Lawyers for a Turkish banker accused of aiding an Iran sanctions-evasion plot are pointing the finger at his colleagues.

A defense lawyer for banker Mehmet Hakan Atilla, a deputy general manager at Turkiye Halk Bankasi AS, spent a second day on Wednesday cross-examining the government’s star witness, highlighting evidence intended to shift blame to other executives.

The attorney, Cathy Fleming, introduced a series of telephone calls showing that the witness, money launderer-turned-cooperator Reza Zarrab, relied more closely on other Halkbank executives. Among them was Levent Balkan, who helped execute trades that enabled Iran to repatriate money from overseas oil sales that were otherwise blocked by U.S. sanctions.

In one call with Zarrab, Balkan is heard saying he’d approve certain transactions, while in another Zarrab and Balkan agree to discuss something “face to face” rather than over the phone. Zarrab then testified there were no recorded conversations where he agreed to meet “face-to-face” with Atilla.

Atilla is on trial in New York on charges of fraud, sanctions violations and conspiracy to launder money. He is one of nine people to have been charged, including Balkan, but only Atilla and Zarrab have been in U.S. custody. The U.S. sanctions came as punishment for Iran’s effort to build a nuclear bomb earlier in the decade.

Sixth Day

Zarrab is spending his sixth day on the witness stand after testifying that Atilla was a participant in the sanctions-evasion plot. In another call introduced into evidence by the defense, he’s heard telling one of his employees that they “should be thankful for Mr. Levent for treating us so well all the time.”

Fleming also introduced a call in which Zarrab lied to a lower-level employee at Halkbank, responding to her concern about companies knowingly doing business with Iran. “We don’t have any transactions like that anyway,” he said.

In yet another call, Zarrab is heard lying to Atilla, telling him he was shipping food to Iran under allowable humanitarian exceptions to the sanctions regime, when in fact no food was actually being shipped. Zarrab admitted deceiving Atilla, and said Atilla at that time had no idea the transactions were fake.

Zarrab acknowledged telling prosecutors that he was “shocked” when he learned Atilla had been arrested in the U.S. this year. The defense also continued to attack Zarrab’s credibility, having him admit that he told an employee to buy a watch for an official who was otherwise unwilling to accept a cash bribe.

“Everyone who is inclined to be bribed has a price,” Zarrab told Fleming.

The case is U.S. v. Atilla, 15-cr-867, U.S. District Court, Southern District of New York (Manhattan).

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