Turkish-Iranian gold trader Zarrab set to testify at US trial against Mehmet Atilla
Turkish-Iranian businessman and gold trader Reza Zarrab is set to testify at a New York trial about how he helped Iran evade U.S. economic sanctions.
Prosecutors say Zarrab likely will take the stand on Nov. 29 and will be a key witness against Turkish banker Mehmet Hakan Atilla, the deputy general manager of Turkey’s state-owned lender Halkbank, the Associated Press reported.
Court papers show Zarrab pleaded guilty last month to bank fraud, money laundering and other charges as part of a deal to testify.
Prosecutors say Zarrab and Atilla laundered Iranian oil money in violation of U.S. economic sanctions against Iran. They say the conspiracy involved bribes and kickbacks to high-level officials.
Atilla has pleaded not guilty.
Prosecutors had kept secret that Zarrab was cooperating in a bid for leniency. Atilla’s lawyer says the trial is about Zarrab’s crimes.
Zarrab will describe a multibillion-dollar international money laundering scheme “from the inside,” Assistant U.S. Attorney David Denton said during his opening statement in the New York federal court trial of Atilla on Nov. 28.
Atilla’s lawyer, Victor Rocco, told jurors in his opening statement that Zarrab was prepared to lie in order to avoid jail time and lacked credibility.
U.S. prosecutors have charged nine people in the criminal case, though only Zarrab and Atilla are known to be in U.S. custody. The other defendants include the former head of Halkbank Süleyman Aslan and the former Turkish Economy Minister Zafer Çağlayan. The Turkish government has said the case has been fabricated for political motives, adding to tensions between Ankara and Washington, NATO allies.
‘Zarrab would provide the means, Atilla would provide the method'
In the New York trial, Denton described two schemes intended to help Iran to spend money from global oil sales despite U.S. sanctions.
In one, he said, the defendants helped entities in Iran buy gold, which was in turn smuggled to Dubai and sold for U.S. dollars or other currencies.
In the second scheme, Denton said, transactions prohibited by sanctions were disguised as purchases of food, which fell under a humanitarian exemption to the sanctions regime.
Denton said Zarrab’s companies carried out transactions, but Atilla, whom he called “an expert on finance and economic sanctions,” designed the schemes to make them appear legitimate.
“Zarrab would provide the means, Atilla would provide the method,” Denton said.
Denton said Zarrab, Atilla and the other defendants lied to conceal the scheme from U.S. officials.
‘Zarrab and Atilla didn’t like each other’
In addition to Zarrab, Denton said the prosecutors’ witnesses would include a former Turkish law enforcement officer who participated in a Turkish investigation into the alleged money laundering scheme, made public in 2013.
Erdoğan, then prime minister, called that case an attempted “judicial coup,” and it was eventually dropped.
Rocco, in his opening statement, told the jury that Atilla never took part in a conspiracy.
“Hakan Atilla rarely communicated with Zarrab,” he said.
“They weren’t friends, confidantes or conspirators. They didn’t like each other. Reza Zarrab saw Hakan Atilla as a money wrench in his schemes.”
Zarrab, Rocco said, bribed other people to further his scheme, including Aslan and Çağlayan, but he never bribed Atilla.
Rocco also said Zarrab bribed a U.S. prison guard for access to “liquor, drugs and women,” though he did not give details, Reuters reported.
Halkbank’s fall from grace
Two weeks ago Turkish authorities had launched an investigation into the prosecutors who initiated the U.S. case.
Halkbank and Turkish officials have said all the bank’s transactions have been fully compliant with national and international regulations, but investors are worried.
At 11:00 GMT on Nov. 28, shares in Turkey’s state-owned lender Halkbank were trading 4.47 percent lower at 8.97 Turkish Liras.
Turkish Foreign Minister Mevlüt Çavusoğlu has said he sees in this case the hand of U.S.-based Fethullah Gülen, accused of being behind last year’s failed coup attempt.
Acting U.S. Attorney Joon Kim last week called the claim that Gülen was behind the U.S. case “ridiculous.”