Turkish Nationals Charged with Conspiring to Evade Iran Sanctions

September 6, 2017

The following is a September 6 press release from the U.S. Attorney’s Office, Southern District of New York.

Former Turkish Minister Of The Economy, Former General Manager Of Turkish Government-Owned Bank, And Two Other Individuals Charged With Conspiring To Evade U.S. Sanctions Against Iran And Other Offenses

Superseding Indictment Further Alleges that Nine Defendants Conspired to Lie to U.S. Government Officials About International Financial Transactions for the Government of Iran and Used the U.S. Financial System to Launder Bribes Paid to Conceal the Scheme

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, Dana Boente, the Acting Assistant Attorney General for National Security, William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today 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, which were barred by United States sanctions; 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. The case is assigned to United States District Judge Richard M. Berman.

REZA ZARRAB was arrested on March 19, 2016, and ATILLA was arrested on March 27, 2017. REZA ZARRAB and ATILLA are scheduled to begin trial on October 30, 2017, before Judge Berman. CAGLAYAN, ASLAN, BALKAN, HAPPANI, MOHAMMAD ZARRAB, JAMSHIDY, and NAJAFZADEH remain at large.

According to the allegations contained in the superseding Indictment filed today in Manhattan federal court[1]:

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.

* * *

CAGLAYAN, 59, is a resident and citizen of Turkey. REZA ZARRAB, 33, is a resident of Turkey and dual citizen of Turkey and Iran. ASLAN, 47, ATILLA, 47, BALKAN, 56, and HAPPANI, 42, are residents and citizens of Turkey. MOHAMMAD ZARRAB, 39, is REZA ZARRAB’s brother and is a resident of Turkey and dual citizen of Turkey and Iran. JAMSHIDY, 31, is a resident of Turkey and dual citizen of Turkey and Iran. NAJAFZADEH, 67, is a resident of Iran and the UAE and a citizen of Iran. Each defendant is charged with conspiracies to defraud the United States, to violate the IEEPA, to commit bank fraud, and to commit money laundering, as well as substantive counts of bank fraud and money laundering. The conspiracy to defraud the United States count carries a maximum term of imprisonment of five years. The conspiracy to violate the IEEPA, money laundering conspiracy, and substantive money laundering counts each carry a maximum term of imprisonment of 20 years. The bank fraud counts each carry a maximum term of imprisonment of 30 years. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.

Mr. Kim praised the outstanding investigative work of the FBI and its New York Field Office, Counterintelligence Division, and the Department of Justice, National Security Division, Counterintelligence and Export Control Section.

The prosecution of this case is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant United States Attorneys Michael D. Lockard, Sidhardha Kamaraju, and David W. Denton, Jr., and Special Assistant United States Attorney Dean C. Sovolos, are in charge of the prosecution, with assistance from Trial Attorneys Elizabeth Cannon and David Recker of the Counterintelligence and Export Control Section.

The charges contained in the superseding Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

Click here for more information.