On 06 September 2017, the U.S. Department of Justice (DOJ) announced that it’s broadening the ongoing investigation into Turkish violations of U.S. Iran sanctions. The investigation includes a probe into the alleged involvement of a former Turkish Minister of the Economy.
The U.S. announced on 06 September the filing of a superseding Indictment charging MEHMET ZAFER CAGLAYAN, a.k.a. “Abi,” SULEYMAN ASLAN, LEVENT BALKAN, and ABDULLAH HAPPANI with conspiring to use the U.S. financial system to conduct hundreds of millions of dollars’ worth of transactions on behalf of the Government of Iran and other Iranian entities blacklisted by the U.S.
The DOJ also accuses the defendants of:
- lying to U.S. government officials about those transactions;
- laundering funds in connection with those illegal transactions, including millions of dollars in bribe payments to CAGLAYAN, ASLAN, and others used to facilitate the scheme; and
- defrauding several financial institutions by concealing the true nature of these transactions.
The superseding Indictment further alleges that CAGLAYAN’s co-defendants – REZA ZARRAB, a.k.a. “Riza Sarraf,” MEHMET HAKAN ATILLA, MOHAMMAD ZARRAB, a.k.a. “Can Sarraf,” a.k.a. “Kartalsmd,” CAMELIA JAMSHIDY, a.k.a. “Kamelia Jamshidy,” and HOSSEIN NAJAFZADEH, who previously were charged in this case with the same offenses – participated in the same overarching scheme to violate and evade prohibitions against Iran’s access to the U.S. financial system.
According to the DOJ the scheme functioned largely by
- using the Turkish government-owned bank (“Turkish Bank-1”) at which ASLAN was the General Manager, ATILLA was the Deputy General Manager of International Banking, and BALKAN was an Assistant Deputy Manager for International Banking, to engage in transactions that violated U.S. sanctions against Iran.
- The defendants used Turkish Bank-1 to facilitate REZA ZARRAB’s ability to use his network of companies to supply currency and gold to the Government of Iran, Iranian entities, and SDNs using Turkish Bank-1, while concealing Turkish Bank-1’s role in the violation of U.S. sanctions from regulators. HAPPANI was an employee of REZA ZARRAB’s and assisted him in operating the scheme through this network of companies.
- CAGLAYAN, who was serving as Minister of the Economy in Turkey at all times relevant to the Superseding Indictment, received tens of millions of dollars’ worth of bribes in cash and jewelry from the proceeds of the scheme to provide services to the Government of Iran and to conceal those services from U.S. government officials.
- Using his position as Minister of the Economy, CAGLAYAN directed other members of the scheme, including officers of Turkish Bank-1, to engage in certain types of deceptive transactions, approved the steps taken by other members to implement the scheme, and protected the scheme from competitors as well as from scrutiny.
- As a result of this scheme, the co-conspirators induced U.S. banks to unknowingly process international financial transactions in violation of the IEEPA.