Former Turkey Minister Charged in Iran Sanctions Case

By Maria Armental Features Dow Jones Newswires

A former Turkish minister and three others were charged by federal prosecutors in an alleged scheme involving hundreds of millions of dollars' worth of financial transactions to help the Iranian government evade U.S. sanctions.

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In an indictment filed Wednesday in a Manhattan federal court, prosecutors accuse Mehmet Zafer Caglayan of directing others, including officers at a Turkish state-owned bank, to handle and conceal a series of transactions prohibited under U.S. sanctions, which sought to restrain Iran's nuclear-weapons program. The alleged actions date to at least 2010 and continued through 2015, according to the indictment.

Mr. Caglayan served as Turkey's economy minister from 2011 to 2013. Before that, he had served as foreign trade minister.

Mr. Caglayan declined comment through his lawyer.

On Thursday, Turkey's current economy minister, Nihat Zeybekci, defended Mr. Caglayan.

"The ones who make these allegations have to prove them," Mr. Zeybekci said.

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The charges stem from a high-profile case against Reza Zarrab, a Turkish-Iranian gold trader who owned companies in Turkey and the United Arab Emirates and whose legal defense team includes former New York Mayor Rudy Giuliani and former U.S. Attorney General Michael Mukasey.

Mr. Zarrab and Mehmet Hakan Atilla, who was a deputy general manager at Halkbank, one of the largest state-owned banks in Turkey, have been accused of conspiracy to evade U.S. sanctions against Iran. They have pleaded not guilty and remain in U.S. custody awaiting trial.

Wednesday's indictment charged Mr. Caglayan and three others on charges including conspiracy to defraud the U.S. and to violate the International Emergency Economic Powers Act, and committing bank fraud and money laundering.

Prosecutors say Mr. Caglayan was involved with Mr. Zarrab in the alleged conspiracy to evade sanctions. Mr. Zarrab, they say, arranged meetings in Turkey that included Mr. Caglayan as well as Iranian government banking and oil officials in which they discussed some of the alleged transactions.

Some of the alleged transactions, according to the indictment, were disguised as food and medicine purchases by Iran, which would have been exempt from U.S. sanctions. Prosecutors said Mr. Caglayan used his position to protect the alleged scheme from competitors and scrutiny. In exchange, he was paid tens of millions of dollars' worth of bribes in cash and jewelry while he was economy minister, according to the complaint.

In a statement, Halkbank said "our bank has repeatedly stated in detail that it has complied with all national and international regulations in all of its transactions."

Wednesday's indictment also charged Suleyman Aslan, a former general manager at Halkbank; Levent Balkan, who was assistant deputy manager at Halkbank; and Abdullah Happani, a business associate of Mr. Zarrab's. Their lawyers couldn't be reached for comment.

--Yeliz Candemir and Erdem Aydin contributed to this article.

Write to Maria Armental at maria.armental@wsj.com

(END) Dow Jones Newswires

September 07, 2017 15:09 ET (19:09 GMT)