Halkbank, the Turkish state-run bank under federal indictment for allegedly helping Iran evade U.S. economic sanctions, has asked the U.S. Court of Appeals for the Second Circuit to allow its lawyers to enter a special appearance in the case without acknowledging the charges against it.

Andrew Hruska, a King & Spalding partner who has represented Halkbank in the U.S. District Court for the Southern District of New York, said in a letter Tuesday that he had petitioned the Second Circuit for mandamus after a federal judge shut down the bank's request earlier this month.

In the meantime, Hruska told the district court, all proceedings should be stayed to avoid "irreparable harm" to the bank while its petition is pending. The government was directed to respond to the stay motion by 5 p.m. Thursday.

Halkbank, which is majority-owned by the Turkish government, has repeatedly refused to accept and has yet to show up in court, despite the threat of sanctions if it does not comply with two summonses.

Hruska in November asked U.S. District Judge Richard M. Berman of the the Southern District of New York to allow his firm to appear on behalf of Halkbank for the "limited and special purpose" of challenging an Oct. 15 indictment, which accuses the bank of fraud, money laundering and sanctions offenses for its "systemic participation" in a massive sanctions-busting scheme to deceive U.S. regulators and foreign banks.

The Manhattan U.S. Attorney's Office opposed the motion and countered that it was nothing more than a delay tactic, tainted by an "air of gamesmanship."

According to Hruska, the case raised the "first impression" issue of whether a federal court in Manhattan could exercise personal jurisdiction over Halkbank, a foreign entity with no physical operations in the United States. Hruska also said he would ask Berman to recuse himself, based on supposedly prejudicial comments he had made "both in and out of the courtroom."

Berman, however, blocked the firm from entering a special appearance Dec. 5, finding no Second Circuit precedent to support King & Spalding's contention that special appearances were appropriate in criminal cases. Halkbank, he said, could raise its jurisdictional challenge and recusal motion after it enters an appearance in the case.

On Dec. 9, he ordered the bank to show cause why it should not be held in contempt for ignoring the court summonses.

Hruska said at the time that he was reviewing the ruling and considering the bank's legal options.

Generally, writs of mandamus are rarely granted, though they have been used to correct abuses of discretion by lower courts for refusing to dismiss cases for a lack of jurisdiction and for failing to properly consider recusal motions.

In his letter Tuesday, Hruska said: "The bank respectfully requests that this court stay all proceedings, including the show cause briefing, hearing, and subsequent arraignment, pending a decision by the Second Circuit on the bank's mandamus petition."

Halkbank is accused in a six-count indictment of using a series of money service businesses and front companies in Iran, Turkey and the United Arab Emirates to transfer billions of dollars' worth of Iranian oil revenue in violation of prohibitions that barred Iran from accessing the U.S. financial system.

High-ranking officials in Iran and Turkey allegedly participated in the scheme, and some officials took tens of millions of dollars in bribes to shield it from the scrutiny of U.S. regulators and banks, prosecutors said.

In total, nine defendants have been charged, including Reza Zarrab, the Turkish-Iranian gold trader who pleaded guilty and later testified against Mehmet Hakan Atilla, a top Halkbank executive who was sentenced to 32 months in prison after a federal jury convicted him on five counts of conspiracy, money laundering and related counts.

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