32-Month Sentence for Turkish Banker

NEW YORK — A Turkish banker who was convicted of taking part in a billion-dollar conspiracy to violate U.S. sanctions on Iran was sentenced to 32 months in prison on Wednesday in Manhattan, a far shorter term than prosecutors had sought.

The high-profile federal trial of the banker, Mehmet Hakan Atilla, depicted high-level corruption in Turkey, riveted the Turkish public and strained that country’s relations with the United States.

Atilla, 47, was the deputy general manager for international banking at Halkbank, a Turkish state bank that U.S. prosecutors alleged was at the center of the broad sanctions-evasion scheme.

The prosecutors sought a sentence of about 20 years, arguing that Atilla was a sanctions expert who had helped design and carry out the scheme and conceal it from U.S. officials.

But the judge, Richard M. Berman of U.S. District Court, said that although Atilla had “unquestionably furthered” the scheme, he was “somewhat of a cog in the wheel” and not “a mastermind.”

“Mr. Atilla,” Berman said, “was a reluctant participant and one who was following orders, albeit improper orders, in my judgment.”

Atilla’s lawyers, seeking leniency for their client, argued that his role had been relatively minor, especially compared with that of Reza Zarrab, a well-connected Turkish-Iranian gold trader who was indicted along with Atilla and seven other Turkish and Iranian defendants. Zarrab, 34, pleaded guilty and cooperated with the authorities.

The government had alleged in court papers that Atilla, Zarrab and the others had used Halkbank to “launder billions of dollars-worth of Iranian oil proceeds, ultimately creating a slush fund for Iran to use however it wished — the very harm that U.S. sanctions were put in place to avoid.”

In court on Wednesday, a prosecutor, Michael D. Lockard, disputed descriptions of Atilla as a minor or reluctant player in the conspiracy, which he called “the biggest sanctions evasion case prosecuted in the United States that we are aware of.”

“When the rubber hit the road,” Lockard said, “Mr. Atilla chose lies and deceptions, not honesty and integrity.”

“This is not a case about drugs,” Lockard said. “It’s not a case about shipments of weapons. But it is, in a very real sense, a case about nuclear capability. Nuclear capability by the world’s foremost state sponsor of terrorism.”

Berman did not contest the gravity of the sanctions evasion plot. And he noted that Zarrab had given “credible” and “largely unrefuted” testimony at Atilla’s trial about how the conspirators had been able to “transfer or free up millions upon millions of dollars of Iranian proceeds, primarily from the sale of Iranian oil,” in violation of the sanctions.

But Berman indicated that Atilla’s role did not warrant the longer sentence the government was seeking. The judge also noted that Halkbank had not been charged in the case.

Atilla will be credited with the time he has spent in jail since his March 2017 arrest.

One of Atilla’s lawyers, Victor J. Rocco, called the sentence fair but said his client would appeal the conviction. “Our objective is to get him home as quick as possible,” Rocco said.

At Atilla’s trial late last year, Zarrab testified that he had paid millions of dollars in bribes to Zafer Caglayan, then Turkey’s economy minister, and Suleyman Aslan, the general manager of Halkbank, to facilitate the scheme. (Caglayan and Aslan were among the seven other defendants charged in the case, who all remain at large.) Zarrab also suggested in his testimony that Recep Tayyip Erdogan, when he was Turkey’s prime minister in 2012, approved the operation.

Erdogan, now Turkey’s president, and other Turkish officials have repeatedly denounced the American government’s prosecution of the sanctions case. The Turkish Foreign Ministry, in a statement on Wednesday, sharply criticized the sentence, saying it had come “after an entirely feigned process which is inconsistent with the principle of fair trial.”

The statement accused the court of relying on “forged evidence and false statements,” which it said had been fabricated by followers of an Islamic cleric, Fethullah Gulen. Erdogan accuses Gulen, his former ally, of fomenting a failed coup in 2016.

In an interview with Bloomberg.com this week, Erdogan said that Atilla was innocent of any crime and that Halkbank had also been done “a great injustice.”

“If Hakan Atilla is going to be declared a criminal, that would be almost equivalent to declaring the Turkish Republic a criminal,” Erdogan said.

Alluding to the intense interest in Turkey about the case, Berman took the unusual step of having a copy of the official transcript of the sentencing posted on the court’s website.

“The idea is so that everyone will know exactly what was said here,” he explained in court, “and so that everybody can evaluate the outcome for themselves.”