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SDNY Judge Berman Denies Halkbank Special Appearance Noting 2d Circuit Logic on Fugitives

By Matthew Russell Lee, Patreon, Thread Video
Honduras - The Source - The Root - etc

SDNY COURTHOUSE, Dec 5 – Turkey's 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 5 SDNY Judge Richard M. Berman issued a 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.

  Back on October 22, when SDNY Judge Berman held a status conference, Halkbank did not show up. (Inner City Press has asked follow scofflaw UN Sec-Gen Antonio Guterres about this, in writing). Late - at 10 pm - on November 4 the US filed with Judge Berman to "respond to a letter delivered to the Court today by King & Spalding LLP, U.S. counsel for Halkbank, requesting permission to enter a limited and special appearance; and will also outline the Court’s civil contempt authority to compel compliance with its orders, specifically the summonses directing Halkbank’s appearance in court to respond to the charges against it in the superseding indictment, S6 15 Cr. 867 (RMB) (the “Indictment”). For the reasons discussed more fully below, Halkbank has been properly served with the Indictment and two summonses to appear pursuant to Rule 4 of the Federal Rules of Criminal Procedure. King & Spalding’s request to enter a special appearance should be denied, and that request does not excuse Halkbank’s obligation to comply with the validly served summonses....  the Court has the authority to impose civil contempt sanctions against Halkbank for its knowing violations of the First Summons and—in the event the bank fails to appear for the November 5, 2019 arraignment in response to the Second Summons—the Second Summons on notice to the bank and with an opportunity to be heard, based on clear and convincing evidence of the bank’s noncompliance and its lack of reasonable diligence in attempting to comply. A per diem fine for each day of Halkbank’s continued noncompliance (i.e., its failure to appear in this action through counsel to answer the charges in the Indictment) may be imposed based on the character and magnitude of the harm threatened by the bank’s continued contempt, the probable effectiveness of the fine, and the financial consequences to Halkbank in light of the defendant’s financial resources and other relevant circumstances. Should Halkbank fail to appear on November 5, the Government respectfully submits that the defendant should be ordered to show cause why contempt sanctions should not be imposed and a potential hearing date scheduled." Watch this site.

On October 23 Judge Berman has ordered: "WHEREAS the Court finds that Halkbank has willfully and knowingly disobeyed the Court's order in the First Smmnons to appear at the First Conference, IT IS HEREBY ORDERED that, to afford Halkbank an opportunity to cure its noncompliance with the First Summons, the Court is issuing a second summons (the "Second Summons") with this Order, directing Halkbank to appear for an arraignment in this matter on November 5, 2019 at 11:00 a.m, (the "Second Conference"); IT IS FURTHER ORDERED that, the Government will serve this Order, the Second Summons, and the Indictment on Halkbank as soon as practicable after the issuance of this Order, by means specified under Federal Rule of Criminal Procedure 4, including without limitation the following: 1. Delivery by mail, parcel service, or other common carrier to Halkbank's principal published business address; 2. Electronic transmission to King & Spalding; 3. Delivery to any registered agent of Halkbank in the United States. IT IS FURTHER ORDERED that the Government's execution of any of these forms of service will constitute (additional) effective service of a summons and this Order. Should Halkbank fail for a second time to appear pursuant to the Second Summons, the Court will consider any appropriate sanctions for knowing and willful noncompliance. SO ORDERED: (Signed by Judge Richard M. Berman on 10/23/2019)."

 Halkbank's longtime law firm King & Spalding put in a letter by Andrew C. Hruska that it is not accepting service of process for Halkbank, which has essentially done rogue, like the United Nations did when it dodged legal papers for killing 10,000 in Haiti by bringing cholera. This is what the international "system" has become. But Inner City Press will have more, much more, on this. For now, here is K&S scofflaw letter.

    The UN under Antonio Guterres is entirely dodging the controversy, eager as Guterres is to get a second term by not offending either the US or any other power, especially China but also including Turkey.

     Meanwhile Guterres' partner the UN Censorship Alliance (UNCA) has half of its content consisting of defense of Atilla and Erdogan, whether on assaults on the Kurds or violations of sanctions.


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