By Brendan Pierson

NEW YORK, Oct 22 (Reuters) – A U.S. prosecutor on Tuesday called Turkey’s Halkbank a “fugitive” after it failed to make an initial court appearance in a criminal case accusing it of conspiring to violate U.S. sanctions against Iran.

Assistant U.S. Attorney Michael Lockard said at a hearing in federal court in Manhattan that prosecutors had served a summons on the bank’s U.S. lawyer, and that the bank was “in contempt” for not appearing. He said prosecutors would give the bank more time to respond, but might seek a fine if it continued to refuse.

Such a fine would be a penalty only for failing to appear in court, and would not reflect a finding that the bank was guilty of the charges against it.

U.S. District Judge Richard Berman, who is presiding over the case, said the bank would get another two weeks.

Andrew Hruska, Halkbank’s U.S. lawyer, had said in a court filing Monday that he was not authorized to accept a summons or appear in court on behalf of the bank. Hruska could not immediately be reached for comment after Tuesday’s hearing.

Federal prosecutors in Manhattan brought the criminal charges against Halkbank on Oct. 16. The bank called the charges an escalation of Washington’s sanctions on Ankara over its military incursion in Syria, while President Tayyip Erdogan called them an “unlawful, ugly” step.

Turkey agreed to a ceasefire in northern Syria last Friday following a visit by U.S. Vice President Mike Pence. He said he told Turkish officials that the charges against Halkbank were a matter for the New York federal prosecutors.

The charges were part of a criminal case that became public in 2016 with the arrest in Miami of Reza Zarrab, a Turkish-Iranian gold trader accused of playing a central role along with Halkbank in a scheme to help Iran evade U.S. sanctions using sham food and gold transactions.

Mehmet Hakan Atilla, a Halkbank deputy general manager, was arrested in New York the following year. Zarrab pleaded guilty and testified for U.S. prosecutors at Atilla’s trial, accusing officials including Erdogan of taking part in the sanctions evasion scheme.

Erdogan at the time condemned the case as a political attack on his government.

Atilla was found guilty and sentenced to 32 months in prison. He returned to Turkey earlier this year after serving his sentence.

On Monday, Atilla was named general manager of the Istanbul stock exchange.

(Reporting By Brendan Pierson in New York Editing by Alistair Bell)