Turkish-Iranian gold trader testifies at US trial - InfoNews

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Turkish-Iranian gold trader testifies at US trial

In this courtroom sketch, Assistant U.S. Attorney David Denton points at defendant Mehmet Hakan Atilla, right, during opening arguments of a trial, Tuesday, Nov. 28, 2017, in New York federal court. Denton said Atilla, deputy CEO of Halkbank, was the architect of a "massively successful" scheme to dupe U.S. banks into letting Iran move money around the world. Judge Richard Berman is seated at the bench, background left. (Elizabeth Williams via AP)
November 29, 2017 - 12:02 PM

NEW YORK - A Turkish-Iranian gold trader testified at a New York trial Wednesday that he paid over $50 million in bribes to Turkey's finance minister in 2012 to overcome a banker's fears he was too popular in Turkey to launder Iranian money and evade U.S. sanctions.

Reza Zarrab, 34, calmly described his 2012 encounters with one of Turkey's most important public officials as he began what will be several days on the witness stand at the trial of Turkish banker Mehmet Hakan Atilla, who is charged in a conspiracy that involved bribes and kickbacks to high-level officials.

Zarrab's decision to co-operate with U.S. investigators — revealed Tuesday — was a surprise twist in a prosecution that seemed in jeopardy just months earlier after Zarrab tried to free himself by hiring prominent and politically connected American attorneys to try to arrange a prisoner transfer between Turkey and the United States.

Zarrab said he began co-operating after efforts by former New York Mayor Rudy Giuliani and former U.S. Attorney General Michael Mukasey failed. In the spring, prosecutors seemed alarmed after learning that Giuliani and Mukasey would meet with Turkey President Recep Tayyip Erdogan and top U.S. officials to try to broker a deal.

With Zarrab as a powerful addition to their arsenal of evidence, prosecutors wasted no time in getting him to name names and muddy reputations in the banking industry and in government.

Testifying with an American flag behind him, Zarrab answered questions from Assistant U.S. Attorney Sidhardha Kamaraju as the prosecutor elicited details of what the United States has said was a well-orchestrated conspiracy to evade U.S. sanctions against Iran and enable $1 billion in Iranian oil proceeds to move through international banking markets.

Zarrab said he ran into resistance from a Halkbank executive when he approached the Turkey government-owned bank in late 2011 or early 2012 to try to gain access to Iranian money through trades in gold.

The executive, he said, feared that Zarrab's marriage to Turkish pop star and TV personality Ebru Gundes made him too popular and transparent to make gold trades.

Feeling unjustly rejected, he said he met with Zafer Caglayan, Turkey's finance minister. He said Caglayan told him he would broker gold trades in return for half the profits.

Zarrab said he paid Caglayan over $50 million to broker the trades and that Caglayan's involvement overcame the bank's resistance.

Caglayan is indicted in the case. The indictment describes his alleged role in the gold-transfer scheme and in another scheme in which he and other Turkish government officials supposedly approved of and directed the movement of Iranian oil proceeds by claiming they were in connection with the sale of food and medicine to Iran from Dubai.

Erdogan has called on American authorities to "review" the decision to indict Caglayan, saying the former minister had not engaged in any wrongdoing because Turkey had not imposed sanctions on Iran, an important trade partner.

Zarrab took the stand wearing tan scrubs a month after pleading guilty to seven crimes, including conspiracy, violating U.S. sanctions, bank fraud, money laundering and paying a bribe to a prison guard to get alcohol and the use of a cellphone.

Atilla, a 47-year-old former deputy CEO of Halkbank, has pleaded not guilty. A lawyer for Atilla attacked Zarrab's credibility Tuesday during opening statements, saying the trial is about Zarrab's crimes.

As he testified, Zarrab described his 2016 arrest as he arrived in the U.S. for a trip to Disney World with his wife and daughter.

He said he initially lied to U.S. authorities when he was confronted with crimes.

"I did not know what I was facing and after a long trip I was shocked and I couldn't give the right answers," Zarrab said. "I was afraid."

The prosecution in Manhattan has been major news in Turkey, where Erdogan has repeatedly asked the U.S. to release Zarrab.

Turkey's deputy prime minister recently said Zarrab was a "hostage" being forced to testify against Turkey's government.

News from © The Associated Press, 2017
The Associated Press

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