Turkey shocked over banker's arrest in New York

A high-ranking official from Turkey’s second-largest state-owned bank was arrested in New York City March 27.

On the orders of the acting US attorney for the Southern District of New York, Joon H. Kim, FBI agents arrested Mehmet Hakan Atilla, Halkbank’s vice president for international banking, for violating the US-led sanctions against Iran. The press release from Kim’s office accused Atilla with participating “in a years-long scheme to violate American sanctions laws by helping Reza Zarrab, a major gold trader, use U.S. financial institutions to engage in prohibited financial transactions that illegally funneled millions of dollars to Iran.”

Zarrab, a Turkish citizen of Azeri Iranian background who himself is currently in US custody, entered the spotlight in December 2013, when he was arrested for bribing high-ranking Cabinet ministers from Turkey’s ruling Justice and Development Party (AKP). The scandal erupted with the arrest of several AKP ministers’ sons by police officers and prosecutors suspected to be linked to US-based Turkish cleric Fethullah Gulen. Meanwhile, compromising phone conversations involving various AKP personalities, including then-AKP Chairman and Prime Minister Recep Tayyip Erdogan, appeared online. The corruption and eavesdropping scandal led to a fallout between Gulen and Erdogan, who had enjoyed an alliance against Turkey’s secular old guard from 2002 until 2013.

Prior to reaching notoriety, Zarrab allegedly acted as the go-between for Turkey and Iran when Washington maintained a nearly watertight sanctions regime against Tehran over its nuclear program. (It is worth noting that an Al-Monitor story translated from the Turkish daily Milliyet in September 2012 — some 15 months before Zarrab’s arrest in Turkey — identifies him as a “leading name” in the gold-for-oil scheme.)