The Justice Department and Halkbank have apparently agreed to end a long-running case accusing the Turkish lender of helping the Iranian government evade sanctions and launder billions of dollars.
A deferred prosecution agreement filed Monday in the U.S. District Court for the Southern District of New York bars Halkbank from conducting transactions that benefit Iran, and requires the lender to hire a monitor to review its compliance with U.S. sanctions and anti-money laundering policy.
In a letter to Judge Richard Berman – who would have to approve the deal for it to take effect – the DOJ cited Turkey’s help in negotiating the October 2025 cease-fire in Gaza and the release of hostages taken during Hamas’ attacks on Israel. Halkbank is majority-owned by the Turkish government.
“In the State Department’s view, a commitment by the United States to resolving the Halkbank matter on mutually agreeable terms was an important component of those diplomatic discussions,” U.S. Attorney Jay Clayton wrote to Berman.
Berman will hold a hearing Wednesday to question attorneys on both sides about the terms of the agreement.
In a statement posted online, Halkbank said it would not “be admitting to any criminal wrongdoing, nor will any judicial or administrative fines be paid.”
“This development is expected to positively impact our bank’s financial structure thanks to the expansion of our bank’s access to overseas resources, correspondent banking network and international markets,” the bank said.
The DOJ charged Halkbank in 2019 with fraud, money laundering and conspiracy, alleging it helped Iran use money servicers and front companies in Iran, Turkey and the United Arab Emirates.
The case was an offshoot of several criminal cases, including one against Reza Zarrab, a Turkish-Iranian gold trader who was arrested at Miami’s airport in March 2016 and pleaded guilty a year later to bank fraud, money laundering and other charges.
Zarrab was not sentenced, but rather testified against Mehmet Hakan Atilla, a former senior Halkbank banker who was convicted in 2018 of conspiring to evade U.S. sanctions against Iran. Atilla denied wrongdoing but served most of a 32-month prison term before returning to Turkey in 2019.
The Halkbank case has strained U.S.-Turkey relations. Turkish President Recep Tayyip Erdogan in 2019 called the case “unlawful” and "ugly."
Attorneys for Turkey had appealed the case, arguing that the U.S. had no jurisdiction to prosecute Halkbank because it is majority government-owned. The U.S. Supreme Court, however, rejected that appeal last October.
The agreement comes as the U.S. enters its second week of amplified conflict with Iran.
“This agreement by Halkbank furthers the United States’ compelling interests in combating terrorist financing and financial support for the Government of Iran,” prosecutors said.
U.S. prosecutors argued that the bank secretly transferred $20 billion in restricted funds, converted oil revenue into gold and cash to benefit Iranian interests and documented fake food shipments to justify transfers of oil proceeds.
During a September meeting between Erdogan and President Donald Trump, Turkish officials floated resolving the case for roughly $100 million, two sources told Reuters.
Halkbank has pleaded not guilty in the case.
