By ADAM KLASFELD, Court House News
After more than three months of resistance over its money-laundering indictment, Turkey’s state-run Halkbank agreed Tuesday to be arraigned in the same New York courtroom where a former ally of Turkish strongman Recep Tayyip Erdoğan pleaded guilty to the scheme years earlier.
The bank is expected to enter its plea on the morning of March 3.
U.S. District Judge Richard Berman called the bank’s reversal a “welcome change of direction but a change nonetheless.”
Represented by King and Spalding attorney Andrew Hruska, who was formerly registered as an agent for the Turkish government, Halkbank wanted to keep out of court while still attacking the legitimacy of proceedings charging it with funneling billions of dollars in Iranian oil money in violation of U.S. sanctions.
Two levels of U.S. courts ruled against it, however, and Halkbank changed its tune in the face of millions in contempt sanctions.
Hruska confirmed that Halkbank’s general manager and CEO authorized him to conduct arraignment on behalf of the bank.
Citing the case’s history, Judge Berman asked the attorney to have his client put its desire to proceed with the criminal case in writing.
“I’d feel more comfortable if we have something like that,” Berman said.
Emphasizing that the bank’s leadership granted permission orally, Hruska added: “If the court directs, I will go and obtain such a document.”
“I so direct, then,” Berman ruled.
A little more than two years ago, a gold trader named Reza Zarrab implicated Turkey’s President Erdoğan in ordering illicit trades. Zarrab testified in New York that he bribed top officials of Erdoğan’s ruling Justice and Development Party to look the other way as he funneled billions in Iranian oil money through Turkey’s state-run banks and sent couriers to transport tons of gold to Dubai, where the laundered loot went into the global market.
The testimony made the Halkbank case a sensitive one for Erdoğan, whose government purged Turkish prosecutors following their pursuit of a corruption case based on the same allegations in late 2013.
Turkey’s government lobbied the Trump administration aggressively in a bid to terminate the case, and those dealings have since inspired multiple congressional inquiries.
