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SDNY COURTHOUSE, Dec 14 – Turkey's Halkbank has officially given up its strategy of refusing to official appear in the US criminal case against it, and on February 25 appeared and agreed to be indicted. Inner City Press live tweeted it here.

  On September 10 Judge Berman scheduled a September 18 oral argument on Halkbank's motion to dismiss. Inner City Press live tweeted it, here and below.

On October 1 Judge Berman has denied Halkbank's motion to dismiss.

From September 18: Halkbank's lawyer: The government claims that a handful of discussions with Treasury officials constitutes doing business in the US. We disagree. These statements to Treasury can't be used to bring in the non-US activities in the UAE and elsewhere. 

Halkbank's lawyer: Under the commercial activities exception, the non-US activity must have a direct effect in the US. There was the supposed pool of money traded oversea. 95% of that money never even made it to the US.

Halkbank's lawyer: Post-pool, in Turkey and Dubai, the US dollar transactions were not the product of Halkbank's activities. So, this court has not subject matter jurisdiction. As to personal jurisdiction, this will be quick - you have indicated how you will rule. 

Halkbank's lawyer: As to bank fraud, our indictment differs from Zarrab's. To prove conspiracy to violate IEEPA, they must prove conspiracy to violate primary, not secondary sanctions. Thank you your honor.

Judge Richard M. Berman: I got it.

Assistant US Attorney Sidhardha Kamaraju: While Halkbank claims the Attila decision required us to change our allegations, it's not true. The indictment contains 81 paragraphs. Halkbank wants you to look at one sentence in Paragraph 6.

AUSA: But the next sentence says, used to make payments on behalf of Iran, in dollars, passing through the US, in violation of US sanctions laws. And look at Paragraph 33, which makes clear a knowing scheme to route the funds from the US. A June 20, 2012 email...

AUSA: The email says, these gold deposits can be used for international payments... Bank Melli, Bank Sedarat, Bank Mellat in Turkey. So, the bank knowingly participated in enabling Iran's access to the US financial system. Then there's the slush fund in Dubai...

 AUSA: Their argument is essentially, What's a billion dollars among friends? Except that their friend is the world's largest state sponsor of terrorism.... Halkbank tries to apply civil law to this criminal case, in which acts are attributable to all conspirators

AUSA, cites US v. Noriega then says Halkbank is asking Judge Berman to save it from the US Executive Branch's decision it should not have immunity, as it decided with regard to Noriega. Judge Berman: Five minute warning.

Judge Berman says he'll be asking for a copy of the transcript to Chambers. He'll take it under advisement. "We can be adjourned."

 On July 14, Halkbank filed its motion to try to recuse Judge Berman. They said he chaired a panel entitled "The Rule of Law in Turkey" - and that he was "the only American judge who spoke at the event," along with European Parliament MP Marietje Schaake.

  As such, Halkbank argues, Judge Berman "took sides on factual issues that are core to this case."

  They have a 33 page declaration from Richard E. Flamm, and another from Michael A. Reynolds.

On August 4 Williams & Connolly in reply added more, about Judge Berman's comments "criticiz[ing] the conduct of Zarrab's counsel" and having cited not judicial sources but instead "the New York Times."

 Now on September 8, the government has opposed any stay of the case pending Halkbank's appeal to the Second Circuit. Watch this site.

  On March 31 in a telephone conference Inner City Press also live tweeted, here, Halkbank dropped King & Spalding and swapped in as its counsel Robert Cary of Williams and Connolly. On Halkbank's behalf he pled not guilty to all counts of the indictment.

   Cary said he wants to travel to Turkey for a third time to discuss with Halkbank whether or not to file a motion for recusal of U.S. District Court for the Southern District of New York Judge Richard M. Berman.

  On June 30 Judge Berman held a proceeding. Inner City Press live tweeted it:

Halkbank's new lawyer, Robert Cary of Williams and Connolly, got on late. Blames it on his "help desk." Judge Berman: You need a 13 year old there with you. Is Halkbank waiving physical presence in an SDNY courtroom? Cary: Yes, Your Honor.

 Judge Berman: I'm within the Second Circuit, but I'm outside of the Southern District of New York. Does Halkbank waive my physical presence in the District for this proceeding? Cary: Yes. AUSA: The government, too.

 Judge Berman: At the March 30 conference, former counsel for Halkbank withdrew and Mr. Cary appeared. Now, let's talk about next steps. On June 2, I told parties to be ready to discuss expedited motion schedule today. Has defense met and conferred?

 Cary: We have some disagreement. For a short window we could have gotten to Turkey. We didn't. We've worked from home. We have a stipulation on a protective order, but not on translations. (A beat). We will be filing a recusal motion, and could by July 21.

 Cary: We would file other motion four weeks after the ruling on the recusal motion. We'd file a motion for a bill of particulars three months after we get the discovery. We believe it will be months before we can travel safely. So discovery on a secure platform.

 Cary: The rest of the discovery will be on a one terabyte hard drive, from Amazon if you can believe it. The stipulation on translations is that we are not allowed to rely on the government translations, we'll hire our own translators.

 Cary: The vast majority of witnesses are overseas. We'll have to use MLATs to get their testimony. Given that and #COVID19, we suggest trial in March 2022. Did you say March 2022? Cary: Yes. Judge Berman: You would need a year to do trial prep?

Cary: Yes. Judge Berman: AUSA Lockhart?

AUSA Lockhart: We disagree on trial date. We think the motions can be scheduled now, without regard to recusal.

AUSA Lockhart: If the Court grants recusal, then the newly assigned Judge would have the benefit of the other motions.  Judge Berman: So you'd say all motions at once?

AUSA Lockhart: Perhaps all motions by July 28. Or recusal by July 21 and the others just after.

 AUSA Lockhart: On the trial date, we think March 2020 is too far away. It would be much sooner, like the beginning of 2021. February, depending on the court's schedule. We are not starting from scratch. Halkbank has been responding to investigation since Oct 2017.

 AUSA Lockhart: Halkbank has interviewed its own officers. So it chose to change counsel. But Halkbank has had time to prepare. Trial prep can take place under current circumstances. The main question is whether people can participate in the trial. Early 2021.

 Judge Berman: Rob, did you want to respond? Cary: My struggles getting on this call is an example. Communication is not what it should be. To work with the client, on which motions to file, too fast is not fair and appropriate. We need much more time.

 Cary: We think personal jurisdiction should be considered first. Judge Berman: I can understand recusal being 1st. But I see no reason for the other motions to be separate. Cary: Representing an entire bank is difficult, our defense will be different than Atilla's.

Cary: We believe there will be Classified Information Procedures Act issues - it was testified to in Congress, Turkish deals to be reviewed only in a secure facility. There are also a lot of translations. We think 2022 makes sense.

Judge Berman: Let's move quickly. File the recusal motion by July 14, reply by August 4. While that's pending, the facial motion with several branches should be filed August 10. Responded to by August 31, reply by Sept 7. Then I'd like to think through the trial concerns.

Judge Berman: Mr Cary, will your foreign witnesses be mostly Turkish? Cary: There will be witnesses from other jurisdictions. Judge Berman: Leave with me the question of trial date. And as to when to have oral argument. Sound workable? Cary: We will make that work

 AUSA Lockhart: Would it make sense to schedule a conference in September?

Judge Berman: Do we need oral argument on recusal? Cary: I would want to discuss that with my client. I'm not able to take a position on that today. [This question was foreseeable. Delay.]

Judge Berman: If oral argument on recusal, it would be in August. Which would be an occasion to refine the schedule, if it needs to be refined. The facial motion, resolvable on the papers?

Cary: I need to check with the client.

Judge Berman: I won't set date now. Send me a note about your vacations. I'll work around them. I think that's it for today. On tech, we could send you Chelsea. We'll talk again soon. I'll see what I can put together for the schedule, excluding time to Sept 7 on consent.

 On May 29, this: "Re: United States v. Türkiye Halk Bankasi A.Ş., S6 15 Cr. 867 (RMB) At the arraignment on March 31, the Court requested that we advise the Court after approximately 60 days whether we had been able to meet with our client in person. Due to the ongoing COVID-19 crisis, we have not been able to meet with our client. As of today, non-Turkish citizens are still prohibited from entering Turkey, and all international flights on Turkish Airlines are cancelled. We are hopeful that this will change in the next 45 days. Accordingly, Halkbank respectfully requests that the status conference currently set for June 9 be adjourned for 45 days. Of course, Halkbank waives all speedy trial rights during the requested adjournment. I have conferred with counsel for the government, who object to this request.  Respectfully,   Robert M. Cary."

  On June 2, Judge Berman extended it: "ORDER as to Turkiye Halk Bankasi A.S. Based upon the submissions of Defense, dated May 29, 2020, and the Government, dated June 1, 2020, the Court determines as follows: 1- The June 9, 2020 conference is adjourned to June 30, 2020 at 9:00 am; 2- Counsel should be prepared to set an expedited motion schedule, if motions are being made, and a trial date at the June 30, 2020 conference; 3- The Court anticipates that the conference will be an AT&T teleconference. The parties will receive by email the dial in information prior to the conference; 4- The public is entitled and welcome to attend the conference and the dial in information will be publicly available prior to the conference; 5- Time is excluded, pursuant to the Speedy Trial Act (18 U.S.C. § 3161) until the June 30, 2020 conference for the reasons set forth in the Defense letter dated May 29, 2020, and the Government letter dated June 1, 2020, including preventing any miscarriage of justice, facilitating communications between Defense counsel and their client, and ensuring preparation by counsel for the Government and the Defense. Time excluded from 6/2/2020 until 6/30/2020." Watch this site.

   Judge Berman previously proposed a compromise: the next conference, probably by phone, in 70 days, on June 9 at 10 AM. Both sides agreed, with the proviso that Cary might write the Court in 60 days and ask for 20 more days. Inner City Press will continue to cover this case.

Back on February 25, Judge Berman entered at 10:15 am, and saying that his courtroom deputy "Christine has handed up a notice of appearance by King & Spalding. Does that mean Halkbank wishes to appear in these proceedings?" 

K&S: "That is correct, your Honor."

Judge Berman: And is willing to be arraigned?

K&S: Yes.

 And so they began conferring to pick a date and time for arraignment. When they returned, Judge Berman asked if King and Spalding has written authorization. No, oral.

Judge Berman asked or directed them to get written proof of authorization given the history of the case including Halkbank's legal department refusing service of process. So the next day in March 3. Inner City Press tweeted:

K&S: Why don't we set a control date in a week?

Judge Berman: March 3 at 11 am, does that work?

K&S: Yes, Your Honor. We are comfortable to proceed with oral authorize but will get a writing if the court so directs.

Judge Berman: I so direct. See you March 3.

 Inner City Press will be there. Sometimes losing an appeal has consequences, and quickly. Watch this site.

Halkbank was indicted for Iran sanctions violations and money laundering on October 15 in the U.S. District Court for the Southern District of New York. On October 21, Turkey named convicted former Halkbank executive Hakan Atilla as the new managing director of Borsa Istanbul.

  On December 26 SDNY Judge Richard M. Berman issued an order "respectfully denying" Halkbank's attempt to stay the proceedings before him.

 But as released at 7:47 am on February 3, the Second Circuit Court of Appeals issued an administrative stay pending expedited referral to and review by a three-judge panel.

  Now on February 21, this Second Circuit three judge panel has denied Halkbank's requests: "Present:  Amalya L. Kearse, Richard J. Sullivan, Joseph F. Bianco, Circuit Judges.                                                        Petitioner seeks a writ of mandamus and moves for a stay of the district court’s criminal proceeding pending decision on the mandamus petition.  Upon due consideration, it is hereby ORDERED that the petition is DENIED because Petitioner has not demonstrated that it lacks an adequate, alternative means of obtaining relief, that its right to the writ is clear and indisputable, or that granting the writ is appropriate under the circumstances.  See Cheney v. U.S. Dist. Ct. for D.C., 542 U.S. 367, 380–81 (2004); see also United States v. McLaughlin, No. 19-308, 2019 WL 7602324 (2d Cir. Dec. 30, 2019) (reviewing de novo, on appeal from final judgment, district court’s determination that it had personal jurisdiction over criminal defendant)," etc.

 Back on December 19, the US Attorney's Office wrote to Judge Berman: "The Government respectfully submits this letter in response to a motion by Turkiye Halk Bankasi, A.S. (“Halkbank” or the “defendant”) to stay all proceedings in this matter (the “Motion” or “Mot.”). Halkbank asks for a stay because it filed a petition for a writ of mandamus in the Court of Appeals on December 17, 2019, seeking an order directing this Court to allow Halkbank to enter a special appearance to challenge personal jurisdiction and to seek recusal of the presiding District Judge. The stay request is at the very least premature, and in any event unnecessary to prevent irreparable harm, and the Government opposes a stay. The Government does, however, ask that the briefing schedule in connection with the show-cause hearing currently scheduled for February 10, 2020 be adjourned as described below to allow additional time for the Circuit’s response to the petition.    the Government does request a modest adjournment of the briefing schedule in connection with the February 10 hearing. Though the Circuit could deny the petition without further briefing, the Circuit may also order the Government to respond to the petition. Id. Because Halkbank did not file its petition until the week before the holidays, the Circuit may not issue its response to the petition before the Government’s brief is due on January 3, 2020. Accordingly, we ask that the briefing schedule be adjourned in order to provide additional time for the Circuit’s response. The Government requests that the schedule be adjourned as follows: the Government’s brief and related filings to be filed by January 17, 2020; Halkbank’s opposition (if any) due by January 31, 2020; and the Government’s reply due by February 5, 2020. In the event of changed circumstances arising out of the Court of Appeals’ response to the petition, they can be addressed at that time."

  There was a footnote: "Halkbank’s contention about “a negative impact on the bilateral relationship between the United States and the Republic of Turkey” is irrelevant. Whatever impact Halkbank’s own contumacious refusal to comply with the summonses may have on diplomatic relations does not favor providing Halkbank with further opportunities to evade this Court’s jurisdiction. Moreover, the Supreme Court has cautioned against courts “impinging on the discretion of the Legislative and Executive Branches in managing foreign affairs.” Kiobel v. Royal Dutch Petroleum Co., 569 U.S. 108, 116 (2013) (quoting Sosa v. Alvarez-Manchain, 542 U.S. 692, 727 (2004)). Purported foreign affairs implications do not alter the application of clear law or warrant treating Halkbank differently from any other party before the Court." How might this apply to the total impunity of the UN? Watch this site.

On December 5 Judge Berman issued a more detailed order denying the application by King & Spalding to make a "special appearance" in this criminal case. Judge Berman last month in his courtroom asked if there is any Second Circuit Court of Appeals precedent. On December 5 he wrote and ruled:

"The Second Circuit recognizes that a defendant may become a fugitive when, “having learned of charges while legally outside the jurisdiction, [the defendant] ‘constructively flees’ by deciding not to return.” See United States v. Catino, 735 F.2d 718, 722 (2d Cir. 1984); see also United States v. Blanco, 861 F.2d 773, 779 (2d Cir. 1988) (“A person can be said to be a fugitive when, while abroad, they learn that they are under indictment and make no effort to return to the United States to face charges.”). It appears to the Court that this is what Halkbank – which is an important institution in Turkey – has done so far in this case. “The primary purpose of the fugitive disentitlement doctrine—promoting mutuality of litigation—is served both when a defendant flees the United States and when he chooses to remain outside the United States.” Miller, 166 F. Supp. 3d at 348; see also Martirossian, 917 F.3d at 890 (where the Court confirmed that “a defendant need not be Case 1:15-cr-00867-RMB Document 581 Filed 12/05/19 Page 26 of 27  27  present in and leave a jurisdiction to become a fugitive; the mere refusal to report for prosecution can constitute constructive flight”). Halkbank has failed to appear following the service of two summonses, with full knowledge and notice of the charges in the Indictment and of the related Atilla and Zarrab cases. See pp. 3–5 above. Halkbank has also been represented by U.S. legal counsel, Mr. Hruska of King & Spaulding LLP, for at least two years in connection with the U.S. criminal investigation of Halkbank’s alleged Iran sanctions evasion. See Gov. Letter, dated Nov. 4, 2019, at 1.

And, this Court has found that “Halkbank has willfully and knowingly disobeyed the Court’s order in the First Summons to appear at the First Conference.” Order, dated Oct. 23, 2019, at 3. The fugitive disentitlement doctrine exists to encourage compliance with the law and to protect against entities that “‘attempt to invoke from a safe distance only so much of a United States court’s jurisdiction as might secure . . . a dismissal while carefully shielding [itself] from the possibility of a penal sanction.’” Hayes, 118 F. Supp. 3d at 625–26 (brackets omitted) (quoting Collazos v. United States, 368 F.3d 190, 200 (2d Cir. 2004)); see also Niemi v. Lasshofer, 728 F.3d 1252, 1255 (10th Cir. 2013).

IV. Conclusion & Order For the reasons stated above, the Court denies Halkbank’s application, dated November 19, 2019, to make a special appearance."

    Back on November 26 the US Attorney office  opposed the special appearance, noting "Halkbank participates in a U.S. Department of Agriculture program that provides guaranteed financing for certain buyers of U.S. agricultural exports.  In order to shield its access to these essential U.S. financial markets and facilities, Halkbank went to extraordinary lengths to conceal the scheme from Treasury officials. Because of Halkbank’s relationships with the Central Bank of Iran, NIOC, and other Iranian government and private entities, sanctions against the Government of Iran had particular significance for Halkbank and Treasury believed Halkbank was at particular risk of Iranian sanctions-evasion efforts. Accordingly, Treasury officials maintained continuous and in-depth communications with Halkbank’s top executives. These included in-person meetings held in Treasury’s Washington, D.C. offices and Halkbank’s Turkey offices; telephone calls between Halkbank executives in Turkey and Treasury officials in the United States; and letter and email correspondence." We'll have more on this.

  King & Spalding's Andrew C. Hruska wanted to file by ECF without making a notice of appearance. Judge Berman said he believes a notice of appearance is required, and would not give legal advise on what should be written on it. King and Spalding said they will file on paper, presumably meaning their briefing.

  Of this lawless attempt to escape the court's reach, Inner City Press asked the UN which has made worse arguments for impunity for bringing cholera to Haiti for its comment (Turkish state media were present in the SDNY on November 5). There has been no answer from the UN.

This case is US v. Turkiye Halk Bankasi A.S., 15-cr-867 (Berman)