By Luc Cohen
NEW YORK, July 14 (Reuters) - A key cooperating witness in the U.S. government's criminal investigation into Turkish state-run lender Halkbank's alleged role in helping Iran evade sanctions avoided prison time at his sentencing hearing on Tuesday.
U.S. District Judge Richard Berman said he would sentence Reza Zarrab to time served at a hearing in Manhattan federal court. Prosecutors had urged the judge to take his cooperation with their case into account in determining his punishment.
Zarrab, a 42-year-old Turkish-Iranian gold trader, pleaded guilty on October 26, 2017 to conspiring to evade U.S. sanctions.
He testified against former Halkbank official Mehmet Hakan Atilla at trial in New York in 2017. Atilla was convicted of helping Iran evade U.S. sanctions.
The U.S. separately charged Halkbank in 2019 with secretly transferring $20 billion of restricted Iranian funds, converting oil revenue into gold and cash to benefit Iranian interests, and documenting fake food shipments to justify transfers of oil proceeds.
The bank had pleaded not guilty. Berman formally dismissed those charges last month, after the Justice Department said in March it had reached a deal with Halkbank to end the case in exchange for the bank hiring a monitor to review its sanctions and anti-money laundering compliance.
The dismissal relieved a longstanding irritant betwen NATO allies Turkey and the United States. Turkish President Recep Tayyip Erdogan once called the case unlawful and "ugly."
The countries are experiencing their best ties in decades since President Donald Trump returned to the White House last year.
The Justice Department said the agreement arose out of Turkey's role in securing a ceasefire last year between Israel and Hamas.
(Reporting by Luc Cohen in New York; Editing by Alistair Bell)
