August 3, 2023 | Policy Brief

Alleged Turkish Money Launderer to Face Trial 

August 3, 2023 | Policy Brief

Alleged Turkish Money Launderer to Face Trial 

A Utah court last week released Turkish businessman Sezgin Baran Korkmaz, whom Austria extradited last year, as he awaits trial in U.S. federal court for several money laundering schemes that allegedly defrauded the U.S. Treasury of $1 billion. Should he agree to turn state’s witness, Korkmaz’s revelations could demonstrate Ankara’s complicity in various illicit finance schemes. 

The Department of Justice (DOJ) pressed hard to extradite Korkmaz because he and his investment company, SBK Holding, have ties to Jacob and Isaiah Kingston, who pleaded guilty in July 2019 to defrauding the United States of $512 million in renewable-fuel tax credits. As part of the DOJ’s efforts to recover the Kingston brothers’ assets, U.S. prosecutors submitted to a federal court a list of Turkish properties owned by the Kingstons and managed by Korkmaz and SBK Holding. Relatedly, in March 2020, a federal jury convicted Lev Aslan Dermen — a co-conspirator with the Kingstons and business partner of Korkmaz — of fraud and money laundering. 

Korkmaz’s connections to Turkish President Recep Tayyip Erdogan and his inner circle made Korkmaz’s extradition to America and potential testimony damaging for Ankara. Revelations on social media by notorious Turkish mobster Sedat Peker link Korkmaz’s illicit activities to Erdogan and other senior Turkish officials. These revelations led one of Erdogan’s senior advisors to resign. In 2021, an Istanbul court granted the Turkish president’s request to ban access to 55 websites that published a photo showing Erdogan meeting with Korkmaz and Jacob Kingston. 

Erdogan’s government is particularly concerned that Korkmaz may turn state’s witness in the United States, following in the footsteps of the Turkish-Iranian sanctions evader Reza Zarrab. In a 2017 trial at a Manhattan federal court, Zarrab implicated Erdogan, his senior aides, and Turkey’s two largest public lenders in a multibillion-dollar Iranian scheme to evade U.S. sanctions.  

In addition to money laundering charges, Korkmaz and his associates reportedly have connections to Venezuela’s Maduro regime, having allegedly chartered flights for oil minister Tareck El Aissami. The U.S. Treasury Department sanctioned El Aissami for international narcotics trafficking and issued a $10 million reward for his successful apprehension. Korkmaz reportedly also has relations with Saleh Assi, a Lebanese businessman sanctioned by Treasury for laundering money for Lebanese Hezbollah

A federal district court initially denied bail to Korkmaz, who pled not guilty, after his extradition, regarding him as an extreme flight risk. If convicted, Korkmaz could face up to 20 years in federal prison, though he could reduce this sentence by testifying as a state’s witness. The actual trial is expected to begin in October 2023. 

The Korkmaz trial is likely to do further damage to Ankara’s already tarnished image in the United States. Turkey has faced increased Western scrutiny for its alleged facilitation of illicit financial transfers from sanctioned Russian persons and entities in direct breach of U.S. and international sanctions. In 2022, U.S. Deputy Secretary of the Treasury Wally Adeyemo issued verbal and written warnings to the Turkish government and associated businesses to stop enabling Russian transfers. The European Union indicated that it too would increase pressure on Ankara, specifically targeting several large Turkish banks that have integrated Mir, Russia’s alternative to the SWIFT financial messaging service.  

Korkmaz’s potential revelations of official Turkish participation in illicit financing and Turkey’s visible sidestepping of sanctions against Russia could be costly. The DOJ should push Korkmaz to disclose all of the Turkish government’s methods of evading international sanctions. In particular, the DOJ should seek to decipher how Turkish officials engage in illicit financial activities in direct contravention of U.S. and European laws. The DOJ should then share this knowledge with officials at Treasury to determine the extent of the Turkish government’s involvement and thereby take appropriate punitive measures.  

Sinan Ciddi is a non-resident senior fellow at the Foundation for Defense of Democracies (FDD), where he contributes to FDD’s Turkey Program and Center on Military and Political Power (CMPP). For more analysis from Sinan, the Turkey Program, and CMPP, please subscribe HERE. Follow Sinan on Twitter @SinanCiddi. Follow FDD on Twitter @FDD and @FDD_CMPP. FDD is a Washington, DC-based, nonpartisan research institute focused on national security and foreign policy. 


Sanctions and Illicit Finance Turkey