Istanbul Gold Refinery Scandal: 21 Arrested in $12.5M Fraud Investigation

Turkish authorities have launched a major fraud investigation into Istanbul Gold Refinery A.Ş. (IAR) and affiliated companies, leading to police raids across Istanbul and the detention of 21 suspects. The operation stems from allegations that several gold companies defrauded the Turkish state by manipulating export-based subsidy programs intended to support foreign-currency inflows.

23 Detention Warrants, 21 in Custody

The Istanbul Chief Public Prosecutor’s Office issued arrest warrants for 23 individuals, of whom 21 have so far been detained. Among those investigated are IAR executives, subsidiary employees, and related company managers.

Authorities allege the group caused a public loss of $12.53 million by exploiting a 3% government incentive program tied to export earnings. The same scheme reportedly involved creating shell companies and falsifying export documentation to obtain unwarranted state payments.

Alleged Scheme: Faking Gold Exports for Profit

According to the indictment, the suspects established 24 front companies under the names of employees and associates. Through these entities, they claimed to have exported $543.6 million worth of precious metals, thereby qualifying for the 3% export support paid out by the state.

Investigators allege the companies melted domestically sourced gold, mixed it with chemical solutions to simulate processing, and falsely declared it as refined gold exported abroad. This manipulation allegedly enabled them to secure the incentive funds unlawfully.

The charges include “forming a criminal organization,” “aggravated fraud against public institutions,” “violating Central Bank regulations,” “violating public finance laws,” and “offenses under the Turkish Currency Protection Act.”

Key Figures Named

Among those under investigation are:

• Özcan Halaç, owner of Istanbul Gold Refinery A.Ş.

• Ayşen Esen, CEO of IAR

• Erkam Halaç, company executive

• Nasuh G., accounting director

• Serdar S., marketing director, and his spouse Betül S., a bank employee

• Mehmet Bora T., general manager of Kuyumcukent Energy

• Cenk K., operations director of Istanbul Silver Refinery

Also listed in the report is İrfan Gündüz, a member of IAR’s board of directors, former AK Party MP (21st–23rd terms), and current Chairman of the Board of Trustees at Ibn Haldun University, whose vice-chair is Bilal Erdoğan, the son of President Recep Tayyip Erdoğan. Authorities have not confirmed whether Gündüz is among those detained.

IAR Among Turkey’s Largest Industrial Firms

The Istanbul Gold Refinery ranks 5th in the 2024 “Top 500 Industrial Enterprises” list published by the Istanbul Chamber of Industry (ISO). The company is a major player in Turkey’s precious metals market and operates under the ownership of the Halaç family.

Raids Across Istanbul

Police conducted simultaneous raids on 23 locations in 12 districts, including Bakırköy, Bahçelievler, Başakşehir, Beylikdüzü, and Sarıyer, seizing financial records, electronic data, and gold samples for forensic examination.

Authorities say the operation uncovered a systematic scheme to defraud state incentive programs, which were designed to reward companies that convert foreign currency earnings into Turkish lira.

What’s Next?

The investigation, led by Istanbul’s financial crimes division, is ongoing. Prosecutors are now reviewing seized documents to trace the money flow and determine whether additional public officials or institutions were complicit.

If convicted, the suspects could face long-term prison sentences under Turkey’s anti-fraud and financial crimes legislation.