Federal prosecutors in New York announced charges on Tuesday against a Turkish bank with ties to a gold trader connected to Rudy Giuliani, accusing the financial institution of a multi-billion dollar scheme to evade U.S. sanctions on Iran.
The six-count indictment for fraud, money laundering and sanctions offenses comes a year after a former executive at the bank, Mehmet Hakan Atilla, was sentenced to prison for working with international gold trader Reza Zarrab, whom Giuliani has represented, to hide transactions involving Iran.
President Recep Tayyip Erdogan of Turkey had repeatedly raised the Halkbank case with Mr. Trump over the past year, urging the United States not to take further action, saying that to do so would unfairly expose Turkey to severe financial risks. One of the bank’s top executives was convicted on related charges last year, and the Justice Department has been reviewing since then whether to pursue the case further as Turkish officials and lawyers pressed the government not to indict the bank.
Lawyers and lobbyists representing the bank, including Brian D. Ballard, a friend of Mr. Trump’s and the vice chairman of his inauguration, have been trying for more than a year to persuade the Trump administration not file charges against the bank, or at least to understand that doing so could threaten the economy of a NATO ally.
Markets did not take the White House sanctions seriously. The Turkish lira rose Tuesday after the Trump administration announced the measures, because investors did not see them as especially painful for Turkey’s economy.
Turkey, which has long clashed with the Kurds, began its attacks after the White House announced a withdrawal of U.S. troops on the border. Trump signed an executive order issuing new sanctions on Turkish officials, hiking tariffs on Turkish steel imports and putting trade negotiations with the country on ice.
Giuliani is now reportedly under investigation over whether he broke lobbying laws as part of his Ukraine efforts.