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US charges Turkey's Halkbank with fraud and money laundering

Charges over alleged scheme to evade sanctions against Iran come day after Trump announced sanctions against Turkey
The US charges may add pressure on Turkey's struggling economy (AFP/File photo)

US prosecutors have charged state-owned Turkish bank Halkbank with fraud and money laundering over an alleged "multibillion-dollar scheme to evade US sanctions on Iran".

The charges, announced on Tuesday, may add pressure on Turkey's struggling economy. They came less than 24 hours after Donald Trump issued US sanctions against Turkey over Ankara's military offensive in northern Syria.

The move is also likely to intensify tensions between the two country as US members of Congress push for more sanctions against Turkey. 

The US government is accusing the bank of using money service businesses and front companies to transfer $20bn in oil revenues to Iran - money that would have been restricted by Washington's sanctions against the Islamic Republic.  

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"The bank’s audacious conduct was supported and protected by high-ranking Turkish government officials, some of whom received millions of dollars in bribes to promote and protect the scheme," Geoffrey Berman, the US attorney for the Southern District of New York, said in a statement.

"Halkbank will now have to answer for its conduct in an American court."

Last year, the bank's deputy general manager, Mehmet Hakan Atilla, was found guilty and sentenced to two years and eight months in jail over similar charges. 

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Reza Zarrab, a Turkey-based gold trader, had pleaded guilty in the same case and testified against Atilla. 

Tuesday's charges were levelled against Halkbank itself; the US government is seeking the forfeiture of the sum of money obtained by the bank as a result of the alleged scheme.

"Halkbank illegally facilitated the illicit transfer of billions of dollars to benefit Iran, and for far too long the bank and its leaders willfully deceived the United States to shield their actions from scrutiny. That deception ends today," said FBI assistant director-in-charge William Sweeney Jr.

A Turkish official in Ankara's embassy in Washington said the charges hurt ties between Turkey and the United States.

"This indictment constitutes an additional step that does not contribute positively to the current situation of US Turkey relations," the official told Reuters news agency.

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