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Turkey’s Halkbank Pleads Not Guilty in Iran-Sanctions Case

Turkey’s Halkbank Pleads Not Guilty in Iran-Sanctions Case

(Bloomberg) -- Turkey’s state-owned Halkbank pleaded not guilty Tuesday to U.S. charges that the bank helped Iran evade sanctions on billions of dollars in oil funds.

The plea, entered on behalf of the company by its lawyer, Robert Cary, comes after months of legal wrangling over the bank’s response to allegations of fraud, money laundering and conspiracy. The arraignment was conducted by U.S. District Judge Richard Berman in Manhattan by teleconference after many in-person hearings were halted over coronavirus fears.

Halkbank had previously refused to acknowledge an October indictment by a federal grand jury in New York. The bank challenged the authority of prosecutors and sought to have the case dismissed before entering a plea, but district and appellate courts rejected its legal argument.

The case is an outgrowth of earlier prosecutions of a money launderer and a senior Halkbank executive who aided the alleged scheme to allow Iran to secretly tap as much as $20 billion in overseas oil revenue frozen in its accounts at Halkbank.

The money launderer, Reza Zarrab, pleaded guilty and testified against the Halkbank executive, with evidence during trial showing they got help from Turkish government officials and senior bank managers -- including the former chief executive officer.

Before the case was filed, Turkey spent more than a year urging the U.S. through diplomatic channels to drop the investigation. Turkish President Recep Tayyip Erdogan made direct appeals to President Donald Trump and other U.S. officials.

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