Foreign CEO Accused of Accounting Fraud in Turkey: Personal Criminal Liability 2026

Foreign CEO accused of accounting fraud in Turkey? Learn when a CEO can face personal criminal liability for false invoices, manipulated books, hidden transactions, tax evasion and accounting irregularities, and how to build a defense in 2026.

A foreign chief executive officer managing a Turkish company may become involved in a criminal investigation after tax inspectors, prosecutors or other authorities identify suspicious invoices, accounting entries, undisclosed transactions, unexplained payments or inconsistencies between company books and the underlying commercial activity.

The immediate concern is often personal liability:

Can the foreign CEO personally be prosecuted because accounting fraud allegedly occurred inside the company?

The answer depends on the CEO’s own conduct.

A fundamental rule of Turkish criminal law is that criminal responsibility is personal: a person cannot be held criminally responsible merely for another person’s conduct. Turkish criminal law also provides that criminal sanctions are not imposed on legal entities themselves, although statutory security measures concerning legal entities may apply where specifically provided.

Accordingly:

CEO title ≠ automatic criminal liability.

Share ownership ≠ automatic criminal liability.

Signature authority ≠ automatic criminal liability.

An accounting irregularity inside the company ≠ automatic CEO guilt.

The investigation should determine what the foreign CEO personally did, authorized, knew about or intentionally participated in.

What Does “Accounting Fraud” Mean in a Turkish Criminal Investigation?

“Accounting fraud” is a broad practical expression rather than one single allegation covering every accounting problem.

Depending on the facts, authorities may investigate conduct involving:

• Manipulated accounting books
• False accounting entries
• False invoices
• Misleading invoices
• Unrecorded transactions
• Accounts opened in unrelated persons’ names
• Concealed books or records
• Destruction or alteration of records
• Fictitious expenses
• Artificial supplier transactions
• Circular payments
• Undisclosed sales
• Manipulated inventory
• Related-party transactions
• Use of allegedly false documentation

Where the allegations concern tax-related accounting conduct, Article 359 of the Turkish Tax Procedure Law can become particularly important.

The current text of Article 359 regulates, among other conduct, accounting fraud in books and records, accounts opened in the names of persons unrelated to the underlying transactions, specified off-book recording designed to reduce the tax base, alteration or concealment of records, misleading documents, and false documents. The statutory consequences vary according to the category of conduct.

Not Every Accounting Error Is a Criminal Offence

This distinction should be made at the beginning of the case.

Companies can have:

• Bookkeeping mistakes
• Incorrect tax classifications
• VAT disputes
• Depreciation disagreements
• Accrual errors
• Foreign-exchange accounting problems
• Incorrect expense classifications
• Transfer-pricing disputes

An accounting error does not automatically establish intentional accounting fraud.

The prosecution must identify the conduct allegedly falling within the applicable criminal provision and establish the personal responsibility of the accused individual.

Personal Criminal Liability Is the Central Issue

Suppose a Turkish subsidiary has:

• A foreign CEO
• A chief financial officer
• A finance manager
• A procurement director
• An accounting department
• An external accountant

Investigators discover suspicious accounting entries.

It should not automatically follow that:

“The CEO runs the company, therefore the CEO committed the offence.”

The investigation should instead reconstruct the actual corporate decision-making process.

Questions That Should Be Asked About the CEO

The defense should determine:

Did the CEO personally create the transaction?

Did the CEO instruct accounting personnel to make the disputed entry?

Did the CEO know that an invoice was allegedly false?

Did the CEO select the supplier?

Did the CEO approve the underlying contract?

Did the CEO approve payment?

Did the CEO receive reports concerning the transaction?

Did the CEO obtain a personal financial benefit?

Was the CEO responsible for accounting or only general business strategy?

The answers can radically change the criminal analysis.

Example: Foreign CEO With No Accounting Responsibility

Assume the company structure is:

Foreign CEO: strategy and international operations

CFO: finance and banking

Finance Manager: payments

Procurement Director: suppliers

External Accountant: bookkeeping and tax declarations

The disputed invoices were selected and processed entirely through procurement and finance.

The CEO did not:

• Select the supplier
• Receive the invoices
• Verify delivery
• Make accounting entries
• Prepare tax returns
• Communicate with the accountant

In such a case, the defense should document the actual division of responsibilities rather than relying merely on the CEO’s statement that they “did not know.”

Example: CEO Personally Directs the Accounting Transaction

Consider a different situation.

Evidence allegedly shows the CEO instructed employees:

“Create an expense even though there was no service.”

or directed the company to obtain an invoice for a transaction that did not occur.

That presents a substantially different evidentiary situation.

The CEO’s actual instructions, knowledge and participation become central.

The title itself is not decisive.

The evidence is.

Foreign CEO and False Invoice Allegations

False invoices remain a major source of tax-related criminal investigations.

Article 359 defines a false document, for purposes of the provision, as a document created as though a transaction or situation existed even though it did not. It separately addresses misleading documents reflecting a real transaction or situation inaccurately in nature or amount.

This distinction matters.

A completely fictitious transaction is different from a genuine transaction recorded inaccurately.

Example: Transaction Never Happened

The books contain:

Consultancy expense: TRY 7 million.

But investigators allege:

• No consultant performed work
• No report exists
• No meetings occurred
• No deliverable exists
• Funds were returned indirectly

The investigation may focus on whether the transaction was created only to generate an accounting or tax result.

Example: Transaction Was Genuine

Suppose the company genuinely purchased industrial equipment.

The supplier is later investigated for false invoices.

The CEO’s company can potentially reconstruct:

Contract → Purchase order → Transport → Delivery → Installation → Bank payment → Fixed-asset records → Production use.

That evidence may materially affect the assessment of whether the company’s transaction was fictitious.

Supplier Problems Do Not Automatically Establish CEO Guilt

This is particularly important in 2026.

Turkey’s Tax Inspection Board operates the KURGAN risk-analysis system for suspicious transaction patterns.

However, the Board expressly states that KURGAN is a pre-inspection risk-analysis mechanism. It does not itself identify a purchaser as a false-document user or a seller as a false-document issuer and does not itself impose a sanction.

In August 2026, the Board reported that 34,315 taxpayers received information requests during one phase of its false-document monitoring program. It specifically emphasized that a KURGAN risk signal alone does not establish that a transaction is false or that a taxpayer used a false document.

This distinction can be critical:

Risk indicator → Investigation → Evidence → Individual responsibility.

Those stages should not be collapsed into one.

Can a CEO Be Responsible for the CFO’s Conduct?

Not simply because the CFO reports to the CEO.

The investigation should determine whether the CEO:

• Ordered the conduct
• Participated in it
• Knowingly approved it
• Coordinated it
• Otherwise engaged in conduct satisfying the applicable criminal provisions

Corporate hierarchy is evidence of organizational structure.

It is not automatically proof of criminal participation.

Can a CEO Be Responsible for an Accountant’s Conduct?

Again, not automatically.

An accountant may receive genuine-looking documentation from company departments and record it.

Alternatively, an accountant may participate in creating irregular accounting structures.

Or management may instruct the accountant to make improper entries.

The investigation must determine which scenario occurred.

Simply saying:

“My accountant did it.”

is rarely an adequate defense.

The documentary workflow should be reconstructed.

Who Sent the Invoice to Accounting?

This apparently simple question can be extremely important.

Identify:

• Who received the invoice
• Who checked it
• Who approved it
• Who confirmed delivery
• Who entered it into the accounting system
• Who approved payment
• Who communicated with the external accountant

Corporate workflow evidence can help distinguish operational responsibility from executive oversight.

Signature Authority Does Not Automatically Prove Knowledge

Foreign CEOs frequently have broad signature authority.

They may sign:

• Contracts
• Bank instructions
• Financial statements
• Corporate resolutions
• Payment approvals

But the meaning of each signature must be examined.

Suppose a payment was approved after:

Procurement approval → Warehouse delivery confirmation → Finance verification → CEO payment authorization.

That is different from evidence that the CEO personally knew the transaction was fictitious.

The investigation should determine what information accompanied the approval.

What If the CEO Signed the Financial Statements?

Signing financial statements can be relevant evidence, but it should not automatically be treated as proof that the CEO personally knew every underlying accounting entry was fraudulent.

Large companies may contain thousands or millions of transactions.

The investigation should determine:

• What the CEO was told
• What reports were provided
• Whether warning signs existed
• Whether the disputed matter was specifically disclosed
• Whether the CEO personally participated in the underlying conduct

Delegation Can Be Important — But Is Not Automatic Immunity

A foreign CEO may delegate accounting responsibility to the CFO.

Preserve:

• Organizational charts
• Job descriptions
• Board resolutions
• Delegation policies
• Signature rules
• Payment limits
• Procurement procedures

These documents can establish corporate responsibility structures.

However, delegation should not be presented as an automatic defense if evidence shows that the CEO personally participated in the disputed conduct.

Foreign CEO Who Does Not Speak Turkish

Many foreign CEOs manage Turkish subsidiaries primarily in English.

Local accounting may be conducted entirely in Turkish.

This can be relevant to actual knowledge, particularly where the CEO received only summarized financial information.

Preserve:

• English-language reports
• Management presentations
• Translations
• Board packs
• Emails
• Reporting structures

The defense should demonstrate what information actually reached the CEO.

Foreign nationality or inability to read Turkish does not itself create criminal immunity.

Parent Company Instructions

Foreign subsidiaries frequently operate according to policies issued by an overseas parent company.

Investigators may encounter emails such as:

“Headquarters requires this expense to be booked this quarter.”

That sentence should be examined in context.

It could concern legitimate accounting timing.

Or it could potentially support a different allegation depending on surrounding facts.

Preserve the complete email chain, accounting policy and underlying transaction.

Do not rely on isolated screenshots.

Group Companies and Related-Party Transactions

Accounting investigations involving foreign investors frequently concern transactions between related companies.

Examples include:

• Management fees
• Consultancy fees
• Royalties
• Loans
• Cost sharing
• Intercompany services
• Procurement services
• Intellectual-property payments

The existence of a related-party transaction does not itself establish criminal accounting fraud.

The defense should establish:

What was provided?

Why was it commercially necessary?

How was the price determined?

What documentation exists?

Who approved it?

Management Fee Investigations

Suppose a Turkish subsidiary pays EUR 2 million annually to its foreign parent for management services.

Investigators may ask:

• Which services were provided?
• Who provided them?
• When?
• What deliverables exist?
• How was the fee calculated?
• Was the expense commercially genuine?

Preserve:

• Intercompany agreement
• Reports
• Emails
• Meeting records
• Cost-allocation calculations
• Personnel records
• Presentations

Bank Records Can Become Critical

Accounting records should be compared with actual money movement.

Investigators may examine:

Invoice → Accounting entry → Bank payment → Recipient → Onward movement.

Unusual onward transfers can generate further suspicion.

But banking evidence can also support the defense by showing genuine commercial payment patterns.

Circular Money Movement

Consider:

Company → Supplier → Related intermediary → CEO’s personal account.

That pattern would likely require careful investigation.

But even unusual financial movement should be analyzed accurately rather than treated as self-proving criminal liability.

Determine:

• Legal basis for each payment
• Contract
• Timing
• Recipient
• Economic purpose
• Whether funds were returned
• Who authorized the movement

Personal Benefit Can Be Important Evidence

If investigators allege that the CEO personally received proceeds from a fictitious accounting transaction, the defense should trace the money precisely.

Ask:

Did the CEO actually receive it?

Was it salary?

Dividend?

Expense reimbursement?

Loan repayment?

Unrelated transfer?

Bank movement should be interpreted together with its legal and commercial basis.

Cash Transactions Can Increase Evidentiary Difficulties

Large cash transactions may be harder to reconstruct.

If legitimate, preserve:

• Cash ledger
• Bank withdrawal
• Receipt
• Person making payment
• Recipient
• Transaction documents

Never create receipts retrospectively and present them as contemporaneous records.

Company Books May Be Seized

If authorities seize accounting books or documents, the defense should immediately identify:

• What was taken
• Relevant periods
• Relevant transactions
• Available copies
• Related digital evidence

Seizure itself is not proof that the CEO committed accounting fraud.

Computers and Phones May Become Evidence

Modern accounting investigations can extend to:

• Accounting computers
• CEO laptops
• Mobile phones
• Email accounts
• Enterprise software
• Cloud systems
• Messaging applications

A device containing evidence should not automatically be equated with the identity of the person who created every file on it.

Investigate:

• User accounts
• Access rights
• Shared devices
• Remote access
• File metadata
• Creation and modification dates

Do Not Delete Digital Evidence

Once an investigation is known or reasonably anticipated, do not:

• Delete emails
• Factory-reset phones
• Wipe laptops
• Delete cloud files
• Remove accounting databases
• Alter spreadsheets

Preserve evidence.

Legal objections concerning scope or privacy should be addressed through lawful procedures.

False Accounting Entries and Article 359

Article 359 currently expressly covers specified accounting and bookkeeping conduct, including accounting fraud in books and records and certain arrangements involving accounts or transactions recorded in a manner that reduces the tax base.

Therefore, when investigators use the broad phrase “accounting fraud,” the defense should ask:

Which specific act under Article 359 is alleged?

Do not defend an undefined accusation.

Concealment of Books

Article 359 also addresses concealment of books and documents in specified circumstances. The current text provides that failure to produce books and documents whose existence is established through notarization or other means when requested during an authorized tax inspection can constitute concealment for purposes of the provision.

A CEO should therefore not casually order employees to withhold requested company records.

Destroying Books or Records Creates Different Risks

Article 359 separately addresses destruction of books and records and specified false-document conduct.

Accordingly, an investigation should distinguish:

Incorrect entry

from

concealment

from

destruction

from

false-document creation or use.

The statutory consequences differ.

How Does the Matter Reach the Prosecutor?

Article 367 of the Turkish Tax Procedure Law regulates the criminal referral framework for offences under Article 359.

Under the current provision, tax inspectors who identify relevant Article 359 offences during an inspection must notify the Chief Public Prosecutor’s Office together with the opinion of the relevant report-evaluation commission. Article 367 also regulates situations in which prosecutors learn of suspected Article 359 conduct through another route.

This means that a CEO may face a prosecutor investigation after a substantial tax-inspection file has already been created.

Review the Tax Crime Report, Not Just the Indictment

The defense should identify the factual basis of the referral.

Ask:

• Which transactions are challenged?
• Which accounting entries?
• Which invoices?
• Which tax periods?
• Which suppliers?
• What evidence indicates fictitious activity?
• How is the CEO personally connected?

A corporate-level finding should not automatically substitute for an individualized analysis.

Tax Penalties and Criminal Proceedings Are Separate

Article 367 states that conviction for an Article 359 offence does not prevent separate tax-loss or irregularity penalties.

Therefore, the company and the CEO may face related but legally distinct processes.

The criminal defense should be coordinated with the tax strategy.

2026 Enforcement Environment

Tax crime remains an active enforcement area in Turkey.

On May 21–22, 2026, representatives of the Ministry of Justice, Court of Cassation, Tax Inspection Board, regional appellate courts, prosecutors and judges held an inter-agency meeting specifically addressing investigation and prosecution procedures concerning Articles 359 and 367, practical problems and institutional cooperation.

In June 2026, the Tax Inspection Board also announced further automation of reports concerning false-document-use examinations. The system integrates queries, calculations, data analysis and current legislation into the reporting process.

Foreign CEOs should therefore expect increasingly data-driven investigation of corporate accounting transactions.

KURGAN Risk Does Not Establish CEO Intent

This distinction is particularly important.

The Tax Inspection Board states that KURGAN does not itself classify purchasers as false-document users and that taxpayers can prove the reality of their transactions through evidence during inspection. The Board also describes criteria used in the tax-inspection process when assessing the intent element concerning false-document use.

Therefore:

Suspicious supplier ≠ fictitious transaction automatically.

Fictitious transaction allegation ≠ CEO knowledge automatically.

CEO knowledge allegation ≠ proven criminal responsibility automatically.

Each link requires evidence.

What If the CEO Became CEO After the Transactions?

Chronology can be decisive.

Example:

2023 — disputed invoices

2024 — disputed accounting treatment

2025 — foreign investor acquires company

2026 — foreign CEO appointed

Preserve:

• Appointment resolution
• Employment agreement
• Trade registry records
• Signature authority
• Banking authority
• Acquisition documents

A person’s current position should not automatically create responsibility for historical transactions.

What If the CEO Resigned Before the Transactions?

Document the end of authority.

Preserve:

• Resignation
• Board resolution
• Registry records
• Bank mandate cancellation
• Signature-authority termination

Precise dates matter.

What If Several Directors and Managers Are Accused?

Individualize each person’s conduct.

For example:

CEO: corporate strategy

CFO: financial reporting

Procurement Director: supplier selection

Finance Manager: payments

Accounting Manager: bookkeeping

External Accountant: tax declarations

Do not allow a complex organizational structure to be reduced to:

“They were all managers.”

Prepare a Responsibility Matrix

A useful defense document can map each disputed transaction:

Function	Responsible Person	CEO Role
Supplier selection	Procurement	None
Contract approval	Procurement + CFO	Oversight only
Delivery verification	Operations	None
Invoice entry	Accounting	None
Payment	Finance	Final approval
Tax declaration	External accountant	None

The matrix must reflect genuine historical operations.

Prepare an Invoice-by-Invoice Analysis

Where multiple transactions are involved, avoid blanket explanations.

Use a table such as:

Invoice	Transaction	Evidence	Payment	CEO Involvement
101	Machinery	Delivery + installation	Bank	Contract signature
102	Raw materials	Freight + inventory	Bank	None
103	Consultancy	Reports + emails	Bank	Meetings
104	Software	License + implementation	Bank	Approval

This allows individual allegations to be answered with individual evidence.

Preserve Exculpatory Evidence Early

Evidence supporting the CEO may include:

• Organizational charts
• Job descriptions
• Delegation documents
• Emails
• Board minutes
• Bank authorization rules
• Procurement procedures
• Supplier correspondence
• Delivery evidence
• Customs records
• Travel records
• Management reports
• Accounting-system logs

Do not wait until the prosecution stage if these records may disappear through ordinary retention processes.

What If the CEO Was Outside Turkey?

Travel evidence may sometimes be relevant, but it is not automatically decisive.

A CEO can issue instructions remotely.

Conversely, physical absence combined with:

• No communications
• No system access
• No banking authority
• No supplier contact
• Delegated responsibility

may contribute to a broader defense.

Evaluate the complete evidence.

Corporate Email Evidence

Preserve complete email chains.

An isolated statement such as:

“Fix the numbers before reporting.”

could mean many different things depending on context.

It might refer to correcting an accounting error.

Or investigators may allege something more serious.

Context, attachments and surrounding messages matter.

Messaging Applications

WhatsApp and similar communications may also become evidence.

Preserve:

• Complete conversation
• Dates
• Participants
• Attachments
• Voice messages
• Related emails

Do not rely solely on selected screenshots.

CEO Statement to the Prosecutor

Before giving a detailed statement, determine:

• Exact suspected offence
• Relevant accounting period
• Disputed transactions
• CEO’s alleged role
• Documents carrying the CEO’s signature
• Communications attributed to the CEO
• Bank transactions relied upon

Avoid guessing about accounting processes outside the CEO’s personal knowledge.

Do Not Coordinate a False Corporate Story

If several executives are being investigated, do not create a common fictional explanation.

Never:

• Fabricate contracts
• Backdate documents
• Alter invoices
• Delete messages
• Manipulate accounting records
• Pressure employees
• Coordinate false witness statements

The defense should be based on contemporaneous evidence.

What If an Employee Committed the Fraud?

Investigate objectively.

Determine:

• Employee authority
• Accounting access
• Supplier relationship
• Banking access
• Communications
• Personal benefit
• Instructions received

If evidence demonstrates unauthorized employee conduct, preserve it.

But unsupported blame should be avoided.

What If the CEO Reported the Problem Internally?

This can be important evidence.

Preserve:

• Internal audit reports
• Compliance notifications
• Emails
• Investigation instructions
• Board reports
• Corrective measures

Contemporaneous evidence that a CEO identified and attempted to correct irregularities may materially differ from evidence of knowing participation.

Internal Investigation After Discovery

A company may need to determine what occurred.

Any internal investigation should preserve evidence and maintain an accurate chronology.

Questions can include:

When was the irregularity discovered?

Who discovered it?

Who had system access?

What transactions are affected?

Were documents altered?

Did anyone receive personal benefit?

Who knew what and when?

Avoid altering original data while investigating.

20-Step Defense Checklist for a Foreign CEO

1. Identify the exact criminal allegation.
2. Identify the relevant Article 359 category if tax accounting is involved.
3. Determine the relevant tax periods.
4. Identify each disputed transaction.
5. Preserve accounting records.
6. Preserve invoices.
7. Preserve contracts.
8. Preserve bank statements.
9. Preserve supplier correspondence.
10. Preserve delivery and inventory evidence.
11. Preserve customs records where relevant.
12. Preserve emails and messages.
13. Preserve organizational charts and job descriptions.
14. Identify who controlled accounting.
15. Identify who controlled procurement.
16. Identify who authorized payments.
17. Reconstruct the CEO’s actual role.
18. Preserve evidence favorable to the CEO.
19. Do not alter or destroy records.
20. Coordinate the tax, corporate and criminal defense strategies.

Frequently Asked Questions

1. Can a foreign CEO be personally prosecuted for accounting fraud in Turkey?

Potentially, yes, if the evidence establishes the CEO’s personal involvement in conduct constituting a criminal offence. Foreign nationality does not provide immunity.

2. Is the CEO automatically responsible because they are the highest-ranking executive?

No. Turkish criminal law recognizes the principle of personal criminal responsibility. The individual’s own conduct must be examined.

3. Can a bookkeeping mistake become a criminal case?

A mere mistake should be distinguished from conduct satisfying a criminal provision. The precise accounting conduct, knowledge and evidence must be examined.

4. Can false invoices create personal liability for the CEO?

They can create criminal risk where evidence establishes the CEO’s relevant personal participation and the statutory elements of the offence. Article 359 separately regulates false and misleading documents.

5. Is signing a payment enough to prove accounting fraud?

Not necessarily. The circumstances of the payment, information available to the CEO and underlying transaction should be examined.

6. Can the CEO blame the CFO or accountant?

Responsibility should be determined through evidence rather than blame. Investigators should establish who selected the supplier, created or approved the transaction, controlled accounting and authorized payment.

7. What if the CEO does not speak Turkish?

Language may be relevant to what the CEO actually knew or understood, but it does not provide automatic immunity. Preserve translations, English reports and internal communications.

8. Is a KURGAN risk signal proof of accounting fraud?

No. The Tax Inspection Board expressly states that KURGAN is a risk-analysis mechanism rather than a determination that the buyer used a false document or the seller issued one.

9. What if the CEO joined the company after the disputed accounting period?

Document the chronology. Appointment, signature and banking-authority dates can be highly important in demonstrating whether the CEO had any role at the relevant time.

10. What should a foreign CEO do immediately after learning about a criminal investigation?

Identify the exact allegation, preserve records, determine the relevant transactions, reconstruct internal responsibility, secure exculpatory evidence and avoid providing speculative explanations before understanding the investigative file.

Legal Assistance for Foreign CEOs Accused of Accounting Fraud in Turkey

Accounting fraud investigations involving foreign executives can become particularly complex because corporate responsibility, accounting systems, tax legislation, financial evidence and personal criminal liability must be separated carefully.

The decisive questions are often:

What accounting transaction is alleged to be fraudulent?

Was the underlying commercial transaction genuine?

Who created the accounting entry?

Who selected the supplier?

Who approved payment?

What did the CEO actually know?

Did the CEO personally participate?

What evidence connects the CEO to the alleged offence?

Fırat Fesih Kaya Law Office provides legal assistance to foreign CEOs, company directors, investors, shareholders and executives facing corporate, accounting and tax-related criminal investigations in Turkey.

Lawyer Fırat Fesih Kaya assists foreign clients with accounting fraud allegations, false invoice investigations, tax crime investigations, company-book seizures, banking and digital evidence, prosecutor proceedings, corporate responsibility analysis and individualized criminal defense strategies.

Early intervention can be especially important where the investigation concerns historical corporate transactions. Accounting-system records, internal approvals, organizational charts, bank authorizations, emails, supplier records and evidence establishing the reality of commercial transactions may need to be preserved before they become unavailable.

Phone: +90 312 434 22 22
Mobile: +90 532 769 22 22
Email: info@firatfesihkaya.av.tr
Address: Mevlana Boulevard No:221, Yıldırım Tower No:148, 06520 Balgat, Çankaya, Ankara, Turkey

This publication is provided for general informational purposes and does not constitute legal advice. Personal criminal liability depends on the precise alleged conduct, the law applicable to the relevant period, the individual’s corporate role, evidence concerning knowledge and participation, and the procedural status of each investigation.

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