Halkbank executive returns to Turkey after serving U.S. sentence

ISTANBUL (Reuters) - A Turkish bank executive who served a 32-month jail sentence in New York for helping evade U.S. sanctions against Iran returned to Istanbul on Wednesday where he was met by his family, bank chief executives and the country’s Treasury minister.

A U.S. court sentenced Halkbank’s Mehmet Hakan Atilla in May 2018 in a case that strained ties between NATO allies Ankara and Washington. At the time of his sentencing, Atilla had spent more than a year in jail.

Atilla, who was greeted at the airport with flowers and a hug from Treasury and Finance Minister Berat Albayrak, has always denied the charges against him.

Turkish President Tayyip Erdogan last year called the U.S. charges a political attack against his government, and on Wednesday Foreign Minister Mevlut Cavusoglu said the U.S. Treasury should close the case as soon as possible.

Halkbank HALKB.IS denies any wrongdoing. It could still face U.S. fines related to the case, though in recent months the U.S. Treasury's Office of Foreign Assets Control, or OFAC, has been silent on the issue.

Albayrak, Halkbank CEO Osman Arslan and Ziraat Bank CEO Huseyin Aydin greeted Atilla at Istanbul’s airport, along with the banker’s family, TV footage showed.

Atilla appeared teary-eyed but joyful as he hugged relatives.

“This is a very beautiful day. In the person of our brother Hakan Atilla, I witnessed today once again how strong and beautiful sons our country raises and how beautiful mothers and fathers there are who raise them,” Albayrak said.

One senior bank official told Reuters there is an expectation among some bankers that the government should ensure that Atilla is rewarded with a generous promotion from his previous role as Halkbank deputy general manager.

Throughout his jail term, the case lingered as one of several strains in ties between fellow North Atlantic Treaty Organization members Turkey and the United States.

The allies also disagree on policy in Syria, while Turkey’s purchase of Russian S-400 missile defense systems risks U.S. sanctions.

Halkbank shares were down 1.42% at 1229 GMT on Wednesday.

Reporting by Ali Kucukgocmen; Editing by Jonathan Spicer and Frances Kerry