Istanbul (Reuters): US prosecutors have charged a former Turkish economy minister and the former head of a Turkish state bank with conspiring to evade US sanctions against Iran, widening an investigation that has fuelled tension between Washington and Ankara.
The indictment is the first time a former member of the Turkish government with close ties to President Tayyip Erdogan has been charged in the case, which stems from an investigation into a Turkish-Iranian gold trader over sanctions evasion.
Erdogan has said he believed US authorities had “ulterior motives” in prosecuting the wealthy gold trader, Reza Zarrab, who was arrested by US authorities last year.
Prosecutors charged former economy minister Zafer Caglayan and former Halkbank general manager Suleyman Aslan and two others, according to a statement, dated Wednesday, from the US attorney’s office for the Southern District of New York.
They were charged with “conspiring to use the US financial system to conduct hundreds of millions of dollars’ worth of transactions on behalf of the Government of Iran and other Iranian entities, which were barred by United States sanctions”.
They were also accused of lying to US government officials about those transactions, laundering funds and defrauding several financial institutions by concealing the true nature of these transactions, US prosecutors said.
Zarrab and a Halkbank deputy general manager, Mehmet Hakan Atilla, were both arrested while in the United States in March 2016 and are scheduled to begin trial in October.
Zarrab has hired former New York City Mayor Rudolph Giuliani and former US Attorney General Michael Mukasey to defend him against the charges.
Giuliani has said that both US and Turkish officials remained “receptive” to a diplomatic solution due to the nature of the charges against Zarrab and the perceived importance of Turkey as an ally.
Caglayan, Aslan and others indicted in the case on Wednesday remain at large, US prosecutors said.
Reuters was not immediately able to reach Caglayan or Aslan for comment. Halkbank has said its said its operations and transactions fully comply with national and international regulations.
Shares of Halkbank fell 2.5 percent in early trade in Istanbul before paring some losses. They were down 1.5 percent at 14.07 lira at 0750 GMT, underperforming the benchmark BIST 100 index, which was flat.