Turkish Banker Declares Innocence at U.S. Sanctions Trial

(Bloomberg) -- In a risky and dramatic move, a Turkish banker accused of plotting to help Iran evade U.S. sanctions took the witness stand in his own defense to deny the charges against him.

Mehmet Hakan Atilla began his testimony at the end of the third week of trial with a vehement denial of the charges. The 47-year-old is accused of joining in a corrupt network of Turkish bankers and officials working with gold trader Reza Zarrab to help Iran tap billions of dollars in overseas oil sales revenue shielded by U.S. sanctions.

Atilla had been the head of international banking at Turkiye Halk Bankasi AS, a large state-owned Turkish bank that prosecutors say was the nucleus of the laundering scheme. He gave a laundry list of denials to the crimes, saying “never” five times in response to whether he aided sanctions evasion, defrauded banks, lied to U.S. authorities and broke other laws.

Asked by his lawyer, Cathy Fleming, whether he was the “architect” of the money-laundering plot, Atilla said: “I am not.”

Sporting a black sweater, gray slacks and an open-collar white shirt, Atilla on Friday also said he had never heard of the term “economic jihad” -- used by Iran to describe dodging the sanctions -- until he was charged in the case. He said he never got a bribe from Zarrab, who pleaded guilty and spent two weeks on the stand detailing the plot for jurors, and never asked for one, testimony consistent with the accounts of government witnesses.

It’s unusual for defendants to take the stand in their own defense, and doing so raises the stakes for Atilla. He will eventually have to answer prosecutors’ questions and any missteps could impair his credibility with the jury and potentially expose him to a more severe sentence if convicted. Defense lawyers have said they expect him to testify for the better part of two days before government lawyers begin cross-examination.

His testimony could soften the picture of him painted by prosecutors. Atilla tearfully told how he hadn’t seen his wife in 269 days and only saw his son for two hours during a visit to the U.S. this year. Atilla has been held in federal jails since his arrest in March, when he was traveling to promote a Halkbank securities offering. The jury was shown pictures of his family, and he spoke of hobbies like fishing, painting and watching films.

Defense lawyers opened their case with a flourish, presenting evidence that Atilla was on a flight from Istanbul to Barcelona with his family at the time prosecutors say he was on a telephone call with Zarrab and Halkbank chief executive Suleyman Aslan, agreeing to allow the laundering scheme to proceed. Prosecutors played a recording of the wiretapped conversation for the jury, and Atilla said it wasn’t him on the call.

Atilla spent much of the day reviewing evidence presented by the government and offering a point-by-point rebuttal.

Of a meeting Zarrab claimed he had with Atilla and Aslan to devise the laundering method, Atilla flatly asserted that it never happened. "Such a meeting did not take place," he said, adding of Zarrab: "He’s not telling the truth." Of a text message exchange between Aslan and Zarrab regarding a laundering "method" proposed by Atilla, he said: "I don’t know what he’s talking about." 

Zarrab’s Lies

The defense also highlighted for the jury portions of Zarrab’s testimony where he acknowledged lying to Atilla about the laundering operation and saying Atilla didn’t know the food shipments to Iran were a front to disguise the transactions. They also highlighted evidence of Zarrab complaining to others that Atilla was blocking the scheme.

The defense lost a bid for a mistrial Friday. U.S. District Judge Richard Berman chided Atilla’s lawyers, saying a former Turkish police inspector’s testimony wasn’t prejudicial to the defendant -- as they argued -- and at times appeared helpful to their case. He also called out the defense team for attempting to question the inspector about connections to U.S.-based Muslim cleric Fethullah Gulen, who is blamed by the Turkish government for a 2016 coup attempt.

“The defense overall appears quite willing to join a rather far-fetched conspiracy bandwagon that’s been constructed and developed far outside any United States courtroom,” Berman said.

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

©2017 Bloomberg L.P.