By Jonathan Stempel
NEW YORK (Reuters) - A U.S. appeals court put the federal government's prosecution of Turkish state-owned lender Halkbank for allegedly helping Iran evade American sanctions on hold while the bank appeals to the U.S. Supreme Court.
Friday's order from the 2nd U.S. Circuit Court of Appeals in Manhattan allows Halkbank to appeal without having to defend against the criminal case at the same time. It expressed no view on the merit of an appeal.
The U.S. Department of Justice had opposed a delay, saying Halkbank's "meritless" claims neither raised "substantial" questions nor overcame the public interest in a speedy trial.
Halkbank has pleaded not guilty to bank fraud, money laundering and conspiracy over its alleged use of money servicers and front companies in Iran, Turkey and the United Arab Emirates to evade sanctions.
Its alleged misconduct includes helping Iran secretly transfer $20 billion of restricted funds, including $1 billion laundered through the U.S. financial system, and converting oil revenue into gold and then cash to benefit Iranian interests.
The U.S. Attorney's Office in Manhattan and U.S.-based lawyers for Halkbank did not immediately respond to requests for comment.
In an Oct. 22 decision, the 2nd Circuit said Halkbank could be prosecuted because its alleged misconduct involved commercial activity that was not covered by sovereign immunity.
Halkbank said that decision conflicted with Supreme Court precedents as it "greenlights the first criminal trial of a foreign sovereign in the nation's history."
It also said it would suffer irreparable harm if forced to defend against "a case from which it is immune."
The Supreme Court denies most appeals. In its last term it received 5,307 filings and heard arguments in 72 cases.