Halkbank Photo: Shutterstock

A Manhattan federal judge on Thursday set a March 2021 trial date in the criminal case accusing Halkbank of helping Iran evade billions of dollars in U.S. economic sanctions, rejecting a bid by the Turkish state-run bank to delay the proceedings until 2022.

The order, from U.S. District Judge Richard M. Berman of the Southern District of New York, was in line with a request by federal prosecutors to try the closely watched case early next year, following months of legal wrangling with the bank's defense attorneys.

Berman said that jury selection would begin Feb. 23, with opening arguments in the trial slated for March 1. Motions in limine, joint proposed jury charges, and voir dire proposals were due Dec. 14.

In his order, Berman said he considered the need to monitor the developing COVID-19 pandemic and its impact on federal court functions, fairness to both sides and the "avoidance of unnecessary delay."

"In this regard, the court points out that the arraignment and, consequently, the trial have already been delayed for more than five months from the date of the Indictment; the desirability of getting to the heart of the matter efficiently; and the importance of and the public interest in the issues presented in this litigation," the judge wrote in a two-page order.

Halkbank's Williams & Connolly attorneys argued during a hearing Tuesday that the global pandemic had made it nearly impossible to travel to Turkey to meet with their client, and said they would need more time to sort through language issues and interview potential witnesses. They asked instead that trial be set for March 2022.

Halkbank, which is majority-owned by the Turkish government, is accused of using a series of 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.

Prosecutors have said that 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 the bank from the scrutiny of U.S. regulators and banks.

Halkbank, meanwhile, had refused for months to respond to the Oct. 19 indictment in Manhattan federal court. Its former King & Spalding attorneys rather sought permission to enter a special appearance on behalf of the bank for the "limited and special purpose" of challenging the court's jurisdiction, though a federal appeals court blocked that move in February.

The King & Spalding attorneys have since withdrawn from the case, and Halkbank finally pleaded not guilty, through its attorneys, to conspiracy, bank fraud and money laundering charges in March.

Robert Cary, Halkbank's new attorney, confirmed on Tuesday that he planned to proceed with the bank's long-considered motion to have Berman recuse himself from the case. The bank has not disclosed the precise basis for such a request, though it has cited unspecified comments the judge has made both inside and outside the courtroom.

At the hearing, Berman directed Halkbank to file its recusal motion by July 14, saying he hoped to "move quickly" on the matter. Briefing on the motion was slated to wrap by Aug. 4, and papers on Halkbank's expected "facial challenge" to the indictment were due by Sept. 7. It wasn't yet clear whether either motion would require oral arguments.

The bank is also represented by Simon Latcovich, David Aufhauser, Damayanti Desai and James Kirkpatrick of Williams & Connolly in Washington, D.C.

In total, nine defendants have been charged in the alleged Halkbank-linked scheme, including Reza Zarrab, the Turkish-Iranian gold trader who pleaded guilty and later testified against Mehmet Hakan Atilla, who returned to Turkey last July after serving his sentence for conspiracy, money laundering and related convictions.

 

Read More:

Prosecutors Seek February Trial, as Halkbank Asks for More Time to Prepare Defense in Iran Sanctions-Busting Case

Halkbank, Represented by Williams & Connolly, Pleads Not Guilty in Iran Sanctions-Busting Case

Halkbank Arraignment Delayed as King & Spalding Seeks Written Approval to Represent Bank

With King & Spalding Prepared to Enter Case, Halkbank Arraignment Nears as Judge Seeks Assurances

2nd Circuit Denies King & Spalding's Bid for Special Appearance in Halkbank Sanctions-Busting Case