The conviction of Mehmet Hakan Atilla, deputy chief executive of Turkish lender Halkbank, is set to further ratchet up strains between Washington and Ankara in an increasingly trouble-plagued relationship.

“The US court… has interfered in Turkey’s domestic affairs in an unprecedented way based on so-called evidence that is only fit for forgery and political abuse,” the Turkish foreign ministry said in a statement.

A jury in New York found Atilla guilty on Wednesday of five counts of bank fraud and conspiracy.

The federal trial hinged on the testimony of well-connected Turkish-Iranian businessman Reza Zarrab, who became a government witness after admitting his involvement in the multi-billion-dollar gold-for-oil scheme to subvert US economic sanctions against Iran.

His testimony implicated former Turkish ministers and Erdogan in the scheme, and identified 47-year-old Atilla as a key organiser.

Turkey’s foreign ministry branded the US ruling as “unfair and unfortunate,” and “a shame of law”.

Erdogan’s spokesman Ibrahim Kalin meanwhile described the conviction as a “scandalous decision in a scandalous case” and a “shameful scenario”.

– ‘Political plot’-

Erdogan had repeatedly slammed the trial as a plot against Turkey and, according to American newspaper reports, had often raised the case in talks with US leaders.

Former New York mayor Rudy Giuliani, at that point part of Zarrab’s legal team, had even met Erdogan in Ankara in search of a solution to the case.

Zarrab, a prominent gold trader, agreed to testify after striking a deal to plead guilty to violating US sanctions in a switch that infuriated Ankara. His assets in Turkey were later seized.

Deputy Prime Minister Bekir Bozdag blasted the case as a “political plot”, saying the jury’s conviction “doesn’t have any legal value from Turkey’s point of view.”

“This decision is against international law,” he wrote on Twitter.

Ties between Turkey and the US have been strained over a number of issues including Washington’s refusal so far to extradite the Muslim preacher Fethullah Gulen, who Ankara blames for orchestrating the failed 2016 coup.

Only last week, the two sides resolved a months-long crisis that resulted in the suspension of visa services for Americans in Turkey and vice versa.

The foreign ministry statement said the court in the US was influenced by some Gulen group members who “made unrealistic allegations,” with the ministry saying that “destroyed the court process’s seriousness and credibility.”

Bozdag went even further, saying the case was “tangible proof” that the CIA and FBI were engaged in judicial cooperation with Gulen’s group.

Atilla is due to be sentenced on April 11. Zarrab’s sentencing date has not been scheduled.

– ‘Tens of millions of dollars’ –

 

Much of the case focused on Zarrab, 34, a key figure in a 2013 Turkish corruption scandal in which he allegedly bribed four ministers to facilitate sanctions-busting trade and other deals.

Those charges against Zarrab were ultimately dropped. But he was arrested in Miami in 2016 while seeking to take is family on a holiday to Florida, and eventually agreed to testify in the US case over violating Iran sanctions in a plea bargain.

In testimony in a New York court on November 30, he said he was told that Erdogan, as prime minister in 2012, and economy minister Ali Babacan had given “instructions” to two public banks to take part in the scheme.

Zarrab also said he paid tens of millions of dollars worth of bribes to then-economy minister, Zaref Caglayan, to facilitate illegal gold transactions with Iran.

Erdogan has rejected the allegations, saying Turkey did not violate the US embargo on Iran and that political rivals were behind the case.

Turkey’s Halkbank said in a statement that the court case was not yet finalised, adding that legal channels including an appeal were open.

It also noted that the bank was not a party to the case, and “nor is there administrative or financial decision taken against our bank by the court.”