Turkish Banker Arrested For Conspiring To Evade U.S. Sanctions Against Iran And Other Offenses

Complaint Further Alleges That the Defendant Used His Position at Turkish Bank to Facilitate Access to the U.S. Financial System and to Conceal International Financial Transactions for Iranian Entities in Violation of U.S. Sanctions

   Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and William F. Sweeney Jr., Assistant Director-in-Charge of the New York Division of the Federal Bureau of Investigation (“FBI”), announced the unsealing of a Complaint charging MEHMET HAKAN ATILLA with conspiring with others, including Reza Zarrab, a/k/a “Riza Sarraf,” to use the U.S. financial system to conduct transactions on behalf of the Government of Iran and other Iranian entities, which were barred by United States sanctions, and to defraud U.S. financial institutions by concealing the true nature of these transactions. ATILLA was arrested on March 27, 2017, and will be presented later today in Manhattan federal court before United States Magistrate Judge James C. Francis IV.

Acting U.S. Attorney Joon H. Kim stated: “As alleged, Mehmet Hakan Atilla, a Turkish banker, participated in a years-long scheme to violate American sanctions laws by helping Reza Zarrab, a major gold trader, use U.S. financial institutions to engage in prohibited financial transactions that illegally funneled millions of dollars to Iran. As alleged in the criminal complaint unsealed today, Atilla worked with Zarrab to create and use fraudulent documents to try to disguise prohibited Iranian financial transactions as food that would qualify under the humanitarian exception to the sanctions regime. United States sanctions are not mere requests or suggestions; they are the law. And those who use the American financial system to violate the sanctions laws, as Atilla is alleged to have done, will be investigated and prosecuted aggressively. I thank the FBI and the career prosecutors in my Office for their tireless work and dedication in this and other important investigations of alleged sanctions violators.”

FBI Assistant Director-in-Charge William F. Sweeney Jr. said: “Iran continues to illustrate it will use whatever means necessary to evade sanctions and violate U.S. law. Our work in this case shows the unscrupulous behavior by exposing how the men charged allegedly moved massive amounts of money through U.S. banks disguised as humanitarian efforts to feed people in need. In this instance, they allegedly utilized a Turkish national and a financial institution that knowingly shielded the true nature of the transactions. The FBI and the U.S. Intelligence Community have dedicated investigators and analysts who won’t stop weeding out every action Iran takes to continue its alleged illegal activity.”

According to the allegations contained in the Complaint[1]:

Beginning in or about 1979, the President has repeatedly found that the situation in Iran constitutes an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States and declared a national emergency to deal with the threat. Pursuant to these presidential declarations, the United States has instituted a host of economic sanctions against Iran and Iranian entities pursuant to the International Emergency Economic Powers Act (the “IEEPA”). This sanctions regime prohibits, among other things, financial transactions involving the United States or United States persons that were intended for the Government or Iran or Iranian entities.

Specifically, ATILLA, Zarrab, and others protected and hid Zarrab’s ability to provide access to international financial networks, including U.S. financial institutions, to the Government of Iran, Iranian entities, and entities identified by the Department of the Treasury Office of Foreign Assets Control as Specially Designated Nationals (“SDNs“). They did so by, among other things, using the Turkish bank at which ATILLA acted as Deputy General Manager of International Banking (“Turkish Bank-1”) to engage in transactions that violated U.S. sanctions against Iran. In particular, they took steps to protect and hide Zarrab’s ability to supply currency and gold to the Government of Iran, Iranian entities, and SDNs using Turkish Bank-1 without subjecting Turkish Bank-1 to U.S. sanctions. As described in more detail in the Complaint, ATILLA, Zarrab, and others conspired to create and use false and fraudulent documents to disguise prohibited transactions for Iran and make those transactions falsely appear as transactions involving food and thus falling within humanitarian exceptions to the sanctions regime.

MEHMET HAKAN ATILLA, 47, is a resident and citizen of Turkey. ATILLA is charged with conspiracies to violate the IEEPA and to commit bank fraud. The conspiracy to violate the IEEPA carries a maximum term of 20 years in prison. The bank fraud conspiracy count carries a maximum term of 30 years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Kim praised the outstanding investigative work of the FBI and its New York Field Office, Counterintelligence Division, and the Department of Justice, National Security Division, Counterintelligence and Export Control Section. He also thanked U.S. Customs and Border Protection for their assistance in the arrest, and the Justice Department’s Office of International Affairs for its assistance on this case.

The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

 

[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth below constitute only allegations, and every fact described should be treated as an allegation.

A.G. Schneiderman Announces Sentencing Of Former Engineering Firm Manager For Making Unauthorized Alterations To Superstorm Sandy Damage Report

Attorney General Schneiderman Calls Upon FEMA To Implement His Proposed Reforms To The National Flood Insurance Program

Schneiderman: Today’s Sentencing Demonstrates That We Will Not Tolerate Those Who Undermine The Integrity Of The FEMA Claims Process

   Attorney General Eric T. Schneiderman announced today the sentencing of Matthew Pappalardo, 39, of Nassau County, for Unauthorized Practice of Engineering after admitting to altering an engineering report prepared in connection with the assessment of structural damage of residential properties resulting from Superstorm Sandy. Papparaldo was the former Project Manager for Uniondale engineering firm HiRise Engineering, P.C. (“HiRise”). In January, HiRise pleaded to the violation of Criminal Solicitation in the Fifth Degree, and agreed to be permanently banned from receiving contracts and providing services under the Federal Emergency Management Association’s (“FEMA’s”) National Flood Insurance Program (“NFIP”). 

“Today’s sentencing demonstrates that we will not tolerate those who undermine the integrity of the FEMA claims process. New Yorkers should be certain that their insurance claims are being handled accurately and fairly,” said Attorney General Schneiderman. “Yet there are still too many flaws in the NFIP that allow this type of fraud to happen. It's high time that FEMA implement the common sense reforms recommended by my office -- so that families can be confident that their claims are being handled appropriately when the next storm hits."

In August 2016, the Attorney General’s Office announced the unsealing of an indictment from a Nassau County Grand Jury charging Pappalardo and HiRise with multiple counts of Forgery in the Second Degree, a class D Felony, and charging Pappalardo with multiple counts of Unauthorized Practice of Engineering, a class E Felony. 

As prosecutors stated at the arraignment on the indictment, after Superstorm Sandy in October 2012, HiRise was contracted to perform structural engineering assessments for properties covered under the National Flood Insurance Program. HiRise, in turn, retained numerous licensed professional engineers to perform house inspections and prepare engineering reports. 

The original reports authored by the on-the-ground, subcontracted professional engineers were altered by employees of HiRise, under the direction of project manager Pappalardo. Pappalardo and the other HiRise employees who made the alterations to the original reports did not personally inspect the damaged buildings and were not licensed to practice engineering in New York State. The altered reports were then submitted by HiRise, and ultimately provided to the adjusting firms, without the consent or approval of the underlying professional engineers. Federal flood claim administrators and adjusting firms then relied on these reports as part of their evaluation of coverage for homeowners under the NFIP. 

On January 10, 2017, before the Honorable Jerald S. Carter in Nassau County Supreme Court, Pappalardo pleaded guilty to Unauthorized Practice of Engineering, a Class E felony, and today was sentenced to three years’ probation and a fine in the amount of $10,000. Also in January 10, 2017, HiRise pleaded to Criminal Solicitation in the Fifth Degree, a violation, agreed to be permanently banned from receiving contracts and providing services under the NFIP, and paid $225,000 in costs of prosecution.

When the original criminal charges were filed in August 2016, Attorney General Schneiderman released a report identifying several fundamental flaws in the NFIP and recommending specific reforms designed to provide homeowners with a better understanding of their coverage and to ensure the integrity of the structural damage assessment process. The Attorney General’s Report, entitled “Murky Waters:  Increasing Transparency and Accountability in the National Flood Insurance Program, Findings and Recommendations in the Wake of Superstorm Sandy,” identifies several fundamental flaws related to both the scope of coverage and the structural damage assessment process under the NFIP.

Flaws in the NFIP identified by the OAG include:

• A lack of clarity in the scope of coverage under the Standard Flood Insurance Policy;
• Inadequate training and lack of certification requirements for structural engineers retained in connection with flood claims; and
• Poor administration and supervision of the flood claims process, including the failure to provide important documentation to policyholders.

Reforms to the NFIP recommended by OAG include:

• Increase the transparency and clarify the scope of flood insurance coverage and any applicable exclusions, to provide consumers with a better understanding of what is and is not covered under their flood policy, through the creation of a plain language disclosure sheet;
• Provide policyholders with all documents created during the course of the flood claim administration process and ultimately relied upon in determining payment or denial of a flood claim, including all final adjuster and engineering reports, as a matter of course;
• Implement a national certification process for all engineers retained to provide structural damage assessments in the wake of a flood event; and
• Ensure the transparency of fees paid to engineering experts by implementing a standardized fee schedule for all engineering services.

On December 30, 2016, FEMA issued a letter bulletin to the Write-Your-Own insurance carriers (“WYO carriers”) that administer the NFIP.  Notably, the FEMA bulletin fails to address several of the key reforms called for by the Attorney General.  The bulletin does not require a plain-language disclosure sheet highlighting the exclusions from coverage, and it does not implement a fee schedule for engineering services.  Additionally, while the bulletin recognizes that FEMA experts must comply with applicable licensure laws, it does not implement training or certification requirements for engineers who perform structural damage assessments.  Lastly, the letter states that WYO carriers must only provide copies of expert reports when requested by policy holders, rather than requiring that such reports be provided to homeowners as a matter of course. As such, Attorney General Schneiderman continues to call on FEMA to implement his recommended reforms.

Attorney General Schneiderman thanks the United States Department of Homeland Security, Office of the Inspector General for their valuable assistance in this investigation, including Special Agent in Charge Gregory K. Null, Assistant Special Agent in Charge Julio Santana, Special Agent in Charge of Headquarters Michael Dawson, Special Agent George Heitz and Special Agent Steven Tseng.

Attorney General Schneiderman also thanks the New York State Education Department, Office of Professions for their valuable assistance on this investigation.

A.G. Schneiderman Leads Coalition Of States And Localities In Opposing Pres. Trump’s Efforts To Dismantle The Clean Power Plan

   New York Attorney General Eric T. Schneiderman led a coalition of 23 states, cities, and counties in opposing President Trump’s executive order today that the administration described as paving the way to eliminating the Clean Power Plan rule.

The coalition – which includes the Attorneys General of New York, California, Connecticut, Delaware, Hawaii, Iowa, Illinois, Maine, Maryland, Massachusetts, New Mexico, Oregon, Rhode Island, Vermont, Virginia, Washington, and the District of Columbia, as well as the chief legal officers of the cities of Boulder (CO), Chicago (IL), New York (NY), Philadelphia (PA), South Miami (FL), and Broward County (FL) – issued the following statement today:

“We strongly oppose President Trump’s executive order that seeks to dismantle the Clean Power Plan.

“Addressing our country’s largest source of carbon pollution—existing fossil fuel-burning power plants—is both required under the Clean Air Act and essential to mitigating climate change’s growing harm to our public health, environments, and economies.

“We won’t hesitate to protect those we serve—including by aggressively opposing in court President Trump’s actions that ignore both the law and the critical importance of confronting the very real threat of climate change.” 

The Clean Power Plan is the culmination of a decade-long effort by partnering states and cities to require mandatory cuts in the emissions of climate change pollution from fossil fuel-burning power plants under the Clean Air Act. The Clean Power Plan, along with the companion rule applicable to new, modified, and reconstructed power plants, will control these emissions by setting limits on the amount of climate change pollution that power plants can emit. The rule for existing plants is expected to eliminate as much climate change pollution as is emitted by more than 160 million cars a year – or 70 percent of the nation’s passenger cars.

EPA adopted the Clean Power Plan through a multi-year stakeholder process that drew heavily on the experience of states and utilities in reducing power plant greenhouse gas emissions. A number of states have already taken a leading role in reducing greenhouse gas emissions by moving forward with their own programs. These states recognize that, on such a crucial issue that is already costing taxpayers billions of dollars in storm response and other costs, state action alone will not be enough and strong federal actions like the Clean Power Plan are needed.

In November 2015, a coalition of 25 states, cities and counties, led by New York Attorney General Schneiderman, intervened in defense of the Clean Power Plan against legal challenge in the D.C. Circuit Court of Appeals. The court heard oral argument en banc for a full day in late September; a decision is expected soon. 

On December 29, 2016, a broad coalition of states and localities called on President-Elect Trump to continue the federal government’s defense of the Clean Power Plan in a letter, urging him to reject “misguided advice” from a group of Attorneys General led by West Virginia to discard the Clean Power Plan. 

STATEMENT FROM MAYOR DE BLASIO ON NYS SUPREME COURT RULING UPHOLDING RENT GUILDLINES BOARD RENT FREEZE DECISION

   “Working people have beaten the landlord lobby. Despite attempts to overturn the recent rent freeze, a court has ruled the Rent Guidelines Board was correct in its decision. The rent freeze stays, and more than 2 million people in rent-regulated apartments can breathe a sigh of relief. We are fighting displacement and protecting affordable housing on every front. We have put shovels in the ground for more affordable housing and we’re investing in universal access to free legal services for tenants fighting eviction. We have more work to do, but together we are turning the tide.”

Congressman Eliot Engel Responds to President’s Executive Order Repealing Environmental Regulations

   Congressman Eliot Engel, a top member of the Energy and Commerce Committee, released the following statement today in response to President Trump’s executive order rolling back the Clean Power Plan and eliminating the consideration of climate change and the social cost of carbon when evaluating government actions: 

“President Trump has been ruthlessly chopping away at our nation’s environmental regulations since he took office, and today’s Executive Order takes his misguided efforts to a new and dangerous level. It seeks to dismantle President Obama’s efforts to combat climate change in the name of bringing back coal and other dirty-energy jobs. This effort rests on a false premise and threatens the health and security of the American people.

“Coal mining jobs are not disappearing because of regulations. They are disappearing because natural gas is cheap, wind and solar are booming, and automation has allowed coal companies to produce more fuel with fewer employees. Clean energy jobs across the country outnumber fossil fuel jobs by more than 2.5 to 1. Solar and wind jobs are growing at a rate 12 times faster than the rest of the U.S. economy. But this executive order, much like the President’s proposed budget, is a job-killer that throws obstacles in the way of innovation and job creation in the renewable industry in favor of sweetheart deals for fossil fuels.

“Repeal of the Clean Power Plan, which aims to slash greenhouse gas emission from electricity by 32 percent by 2030, will lead to billions of additional tons of carbon being released into the atmosphere contributing to hundreds of thousands of premature deaths. 

“The Department of Defense has viewed climate change as a national security concern for at least a decade, and ignoring it threatens our military installations and infrastructure, while raising the potential for increased conflict across the globe. 

“Today President Trump failed the American people by rejecting the overwhelming scientific evidence and economic benefits supporting climate action.”

STATEMENT FROM MAYOR DE BLASIO ON PRESIDENT TRUMP’S EXECUTIVE ORDER DISMANTLING CLIMATE POLICIES

   “President Trump’s order to begin rolling back the progress we have made on climate change represents an existential threat to New York City. We’re already experiencing rising seas and hotter weather, with the last three years on record as the hottest yet. At the same time, the effects of climate change will fall disproportionately on our most vulnerable communities, exacerbating inequality. We are choosing to meet this challenge head-on, investing to make our neighborhoods more resilient and doing our part to reduce the pollution that drives climate change. Faced with presidential orders that reject sound science and common sense, I am proud to join mayors across the country in offering bold solutions capable of leaving our children a healthy planet.”

IMMIGRATION WORKSHOP SUNDAY, APRIL 2, and Job Fair Wed. April 5th

   A "Know Your Rights" Workshop for Immigrants organized by Assemblyman Luis Sepulveda will be held this Sunday, April 2, from 1 p.m. to 5 p.m. at Holy Family Church, 2158 Watson Avenue, at Castle Hill Avenue.

Co-sponsored by state Senators Jeff Klein and Ruben Diaz, the workshop will feature a number of speakers from city government and private agencies discussing immigration issues and taking questions from the audience.

 

A recent similar workshop organized by Sepulveda at St. Helena's Catholic Church in Parkchester drew 500 participants.

"I urge those in the community who may have issues with their immigration status, or even possibly face deportation, to attend this workshop," said Sepulveda. "This will be a chance to connect with a number of agencies and organizations that are there to help."

For more information, contact Assemblyman Sepulveda's office at 718 931-2620

A job fair organized by Assemblyman Luis Sepulveda for Wednesday, April 5, is expected to draw several hundred job seekers to meet with several dozen potential employers from city and state agencies, retailers, general contractors, colleges and the healthcare/hospital industry.

Co-sponsored by Senator Ruben Diaz and Assemblyman Marcos Crespo, the job fair will run from 6:30-8:30 p.m. at the Sotomayor Community Center, 1000 Rosedale Avenue, just off the Bruckner service road.

Acting Manhattan U.S. Attorney And Nypd Commissioner Announce Arrest Of Narcotics Dealer Responsible For Heroin Overdose Death In A Hospital Rehabilitation Clinic

  Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and James P. O’Neill, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of a complaint charging ANTHONY DODAJ with narcotics dealing that resulted in the heroin overdose death of a 41-year-old woman while the victim was a patient in a hospital rehabilitation clinic.

The complaint alleges that DODAJ participated in a conspiracy to distribute heroin, and that heroin distributed by DODAJ on January 1, 2016, resulted in the death of Ivy Katz in New York, New York. DODAJ was arrested this morning and presented today in Manhattan federal court before United States Magistrate Judge James C. Francis IV. DODAJ faces a mandatory minimum term of 20 years in prison.

Acting U.S. Attorney Joon H. Kim stated: “As alleged, Anthony Dodaj hand-delivered a fatal dose of heroin to a recovering addict inside a rehabilitation facility. Together with our partners at the NYPD, we will continue to prosecute those who prey on others’ addictions, as alleged here.”

NYPD Commissioner James P. O’Neill stated: “As alleged, the defendant preyed on the vulnerable – peddling poison to those seeking help. Today, the defendant finds himself under arrest with the possibility of spending the rest of his life in prison for the crimes alleged in the complaint.”

According to the complaint[1]:

From December 2016 up to January 2017, in the Southern District of New York and elsewhere, ANTHONY DODAJ and others conspired to sell heroin. As part of that conspiracy, on January 1, 2016, DODAJ delivered heroin to Ivy Katz, a 41-year-old recovering heroin addict. In mid-December 2016, Katz had voluntarily checked herself into an inpatient rehabilitation program for opioid dependence at a hospital located in New York, New York (the “Hospital”). On January 1, 2016, DODAJ entered the Hospital and met with Katz in the Hospital’s inpatient rehabilitation ward. Approximately 30 minutes after DODAJ left the Hospital, Katz was found comatose in her room with a needle containing heroin in her arm. Katz never regained consciousness, and ultimately died on January 16, 2017.

DODAJ, 46, of the Bronx, New York, faces a maximum sentence of life in prison, and a mandatory minimum sentence of 20 years in prison.

The statutory maximum sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant would be determined by a judge.

Mr. Kim praised the outstanding investigative work of the NYPD.

This matter is being handled by the Office’s Narcotics Unit. Assistant United States Attorney David W. Denton Jr. is in charge of the prosecution.

The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

 

[1] As the introductory phrase signifies, the entirety of the text of the Complaint, and the description of the Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.