Bijan Kian, a former associate of Michael Flynn, was accused of working for the Turkish government but the prosecutors were unable to bring evidence.
A federal judge in the United States has overturned a jury verdict against Bijan Kian, an American lobbyist, who was accused of secretly working for the Turkish government.
Judge Anthony Trenga of the Eastern District of Virginia found that the US prosecutors have failed to provide enough evidence to get Kian convicted.
In July, a jury had found Kian guilty of trying to influence Washington's policies at behest of Ankara, which denied the allegation.
The case had threatened to further strain Turkish-US relations, which have already hit a low in recent years over a host of issues including Washington's support of YPG in Syria, which Ankara says is a terrorist organisation, and Turkey's decision to buy Russia's S-400 defense system.
The YPG is the Syrian branch of the PKK outfit, which is recognised by Turkey, the US and the EU as a terrorist group and has waged a deadly armed campaign against the Turkish state that has claimed at least 40,000 lives in more than three decades.
Kian was a business partner of Michael Flynn, the former national security advisor of US President Donald Trump.
In 2016, a few days after a bloody coup attempt in Turkey, Flynn wrote an article criticising Washington's policies toward its NATO ally - Turkey.
The US prosecutors alleged that Kian had taken money from a Turkish-Dutch businessman, Ekim Alptekin, who was alleged to be close to the Turkish government.
But the prosecutors were never able to establish any link between Kian and the Turkish government.
Even Judge Trenga, whose court has been looking into the case, had been skeptical about allegations.
At one point Trenga had considered dismissing the charges, which were filed last year, due to lack of evidence.
He refereed the matter to a jury in July nevertheless.
The Turkish government has denied engaging in a conspiracy to evade US regulations requiring foreign government lobbyists to register with the Justice Department.