Turkish gold trader details money
laundering scheme for Iran
Send a link to a friend
[November 30, 2017]
By Brendan Pierson
NEW YORK (Reuters) - A Turkish-Iranian gold
trader described in a U.S. court on Wednesday how he ran a sprawling
international money laundering scheme aimed at helping Iran get around
U.S. sanctions and spend its oil and gas revenues abroad.
Reza Zarrab, who has pleaded guilty and is cooperating with U.S.
prosecutors in the criminal trial of a Turkish bank executive, told
jurors in federal court in Manhattan that he helped Iran use funds
deposited in Turkey's state-owned Halkbank to buy gold, which was
smuggled to Dubai and sold for cash.
The testimony, given through Turkish interpreters, came on the second
day of the trial of Halkbank executive Mehmet Hakan Atilla, who has
pleaded not guilty.
U.S. prosecutors have charged nine people in the case, although only
Zarrab, 34, and Atilla, 47, have been arrested by U.S. authorities.
Prosecutors have said the defendants took part in a scheme that involved
gold trades and fake purchases of food to give Iran access to
international markets, violating U.S. sanctions.
The case has fueled tensions between the United States and Turkey, which
are NATO allies. Turkish President Tayyip Erdogan's government has said
the case was fabricated for political reasons.
Standing before the jury in tan prison garb on Wednesday, Zarrab drew a
multicolored diagram to illustrate the complex series of transactions he
said he used to avoid scrutiny of U.S. banks and regulators. He
explained how he falsified customs documents to make it appear that gold
was bound for Iran, rather than Dubai.
Zarrab said Atilla was "the most knowledgeable person about the sanction
rules" at Halkbank, and that he helped develop the scheme. He said
Atilla and Halkbank's then-general manager, Suleyman Aslan, instructed
him how to carry it out.
"He made sure that the system and method worked," Zarrab said of Atilla.
Zarrab said he began working with Halkbank on the scheme in 2012, after
bribing Zafer Caglayan, then Turkey's economy minister, to broker a deal
with Aslan. He said Aslan had initially refused to work with Zarrab
because he was too well known.
[to top of second column]
Turkish gold trader Reza Zarrab is shown in this court room sketch
as he appears in Manhattan federal court in New York, U.S., April
24, 2017. REUTERS/Jane Rosenberg
Zarrab said he paid Caglayan bribes amounting to more than $50
Caglayan and Suleyman have also both been charged in the case.
Turkey's government has previously said that Caglayan acted within
Turkish and international law. Halkbank has said that all of its
transactions fully complied with national and international
Zarrab testified that before working with Halkbank, he handled
Iranian transactions through Turkey's Aktif Bank. He said the bank
initially refused to let him open an account, but relented after
Zarrab asked Egemen Bagis, then Turkey's minister of European Union
affairs, for help.
Zarrab said Bagis set up a meeting between him and Aktif Bank's
general manager and that he was then allowed to open an account.
However, Aktif Bank later shut down the account after receiving a
warning from the United States, Zarrab said.
Reuters was not immediately able to reach anyone at Aktif Bank for
comment after working hours on Wednesday.
Zarrab is expected to continue testifying on Thursday.
(Reporting by Brendan Pierson in New York; Editing by Bill Trott and
[© 2017 Thomson Reuters. All rights
Copyright 2017 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.