July 20, 2020

Former Halkbank manager’s conviction affirmed

On July 20, 2020, the United States Court of Appeals for the Second Circuit affirmed the conviction of Mehmet Hakan Atilla, who was convicted in May 2018 of conspiracy to defraud the United States, money laundering, bank fraud, and conspiracy to violate the International Emergency Economic Powers Act.  Atilla, a citizen of Turkey and former deputy general manager of the Turkish state-owned bank Türkiye Halk Bankaşi, A.S. (Halkbank), was convicted for his role in an alleged scheme to evade US sanctions against Iran and to launder billions of dollars’ worth of Iranian oil proceeds through Halkbank.   

According to the evidence, Atilla conspired with a client of Halkbank, Reza Zarrab, to obstruct enforcement of economic sanctions against Iran, to violate IEEPA by conducting transactions designed to evade US sanctions, and to use falsified documents to mislead US financial institutions.  In his appeal of the conviction, Attila challenged the sufficiency of the evidence, the application of 18 USC § 371 to his conduct, the exclusion of a telephone call transcript from the evidence at trial, and the district court’s jury instructions regarding IEEPA.  The court rejected three of the four grounds for challenging the conviction.  On the IEEPA instructional error, the court agreed that IEEPA, the related regulations and executive orders do not, on their face, make it unlawful for a person to conspire to avoid the imposition of secondary sections; therefore, the district court did err when instructing the jury that it could convict Atilla merely for conspiring to avoid the imposition of future sanctions.  However, the court determined that the error was harmless since the jury found Atilla guilty on a different theory of liability as well — that Atilla conspired to violate the IEEPA by exporting services (including the execution of U.S.-dollar transfers) from the United States to Iran in violation of Iranian Transactions and Sanctions Regulations.

Atilla completed his 32 month sentence and was deported to Turkey in 2018.