The Justice Department eventually charged Halkbank, a state-owned Turkish bank, with money laundering, fraud and conspiracy to violate sanctions against Iran. Credit: The New York Times

WASHINGTON — ​Geoffrey S. Berman was outraged.

The top federal prosecutor in Manhattan, Mr. Berman had traveled to Washington in June 2019 to discuss a particularly delicate case with Attorney General William P. Barr and some of his top aides: a criminal investigation into Halkbank, a state-owned Turkish bank suspected of violating U.S. sanctions law by funneling billions of dollars of gold and cash to Iran.

For months, President Recep Tayyip Erdogan of Turkey had been pressing President Trump to quash the investigation, which threatened not only the bank but potentially members of Mr. Erdogan’s family and political party. When Mr. Berman sat down with Mr. Barr, he was stunned to be presented with a settlement proposal that would give Mr. Erdogan a key concession.

Mr. Barr pressed Mr. Berman to allow the bank to avoid an indictment by paying a fine and acknowledging some wrongdoing. In addition, the Justice Department would […]

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