U.S. charges 4 Turks with conspiring to violate Iran sanctions

The New York Times – Federal prosecutors in New York announced on Wednesday the filing of a new indictment that charges a former Turkish economy minister and three other Turks with participating in a broad conspiracy to violate the United States’ sanctions against Iran.

The new charges represent a significant expansion of a case that had already drawn the attention of the Turkish president, Recep Tayyip Erdogan, senior members of the Trump administration and President Trump’s informal adviser, Rudolph W. Giuliani.

Mr. Giuliani has been retained by one defendant, Reza Zarrab, to try to negotiate a diplomatic resolution to his case. Mr. Giuliani has met with Mr. Erdogan to discuss the case; in the past, Mr. Erdogan claimed there were “malicious” intentions behind Mr. Zarrab’s prosecution.

Prosecutors have charged that Mr. Zarrab, a gold trader and dual citizen of Iran and Turkey, and his co-defendants conspired to facilitate millions of dollars in transactions on behalf of Iran and other sanctioned entities through the use of front companies and false documentation.

The most prominent new defendant charged was Mehmet Zafer Caglayan, 59, who served as the Turkish economy minister from 2011 until 2013 and currently serves in the Turkish Parliament, the indictment said.

While Mr. Caglayan was a minister, the indictment charged, he “received tens of millions of dollars’ worth of bribes in cash and jewelry from the proceeds of the scheme to provide services” to the Iranian government and concealed those services from United States regulators.

The new indictment also said that high-ranking government officials in Iran and Turkey “participated in and protected this scheme,” with some officials taking bribes.

In addition, the indictment said, the leaders of a bank that is majority-owned by the Turkish government “participated in the design of fraudulent transactions intended to deceive U.S. regulators and foreign banks.” Other court filings show it is Halkbank.

The new indictment comes at a time of testy relations between Turkey and the United States, which are both members of NATO. Last week, Mr. Erdogan denounced another federal indictment — against three of his bodyguards over a brawl in Washington during his visit in May. Twelve other Turkish security officers were charged in that case in June.

Mr. Erdogan has also repeatedly called on the American authorities to extradite Fethullah Gulen, a cleric who lives in exile in Pennsylvania. He is the leader of a Turkish Muslim sect accused by Mr. Erdogan of having helped orchestrate an attempted coup that roiled Turkey in July 2016.

Mr. Gulen, a longtime critic of Mr. Erdogan’s, has denied any connection to the coup attempt and vowed to fight extradition.

In addition to Mr. Caglayan, the new indictment charged Suleyman Aslan, a former general manager of the bank; Levent Balkan, another former bank executive; and Abdullah Happani, an associate of Mr. Zarrab’s.

The four defendants charged on Wednesday are not in United States custody, prosecutors said.

Mr. Zarrab has pleaded not guilty. His lawyer, Benjamin Brafman, had no comment.