Reza Zarrab, a Turkish-Iranian gold trader, who has been testifying at the trial of a Turkish bank executive in a New York federal court, said Monday that he paid bribes to secure his release from jail in Turkey in 2013 after he was arrested there in a corruption investigation.
Reza Zarrab (34) has not testified as to who received the bribes. He has pleaded guilty to charges that he schemed to help Iran evade US sanctions. Zarrab is testifying for US prosecutors against Mehmet Hakan Atilla, an executive at Turkey’s state-owned Halkbank facing related charges. Atilla has pleaded not guilty.
During the 5th hearing, Zarrab continued testifying about the Iranian money transfers he had carried out with the help of Halkbank Deputy General Manager Mehmet Hakan Atilla. The prosecutor went over some intercepted official documents between Zarrab and Halkbank relating to the alleged illegal money transfers from Iran, then asked about the Dec. 17, 2013 indictments in Turkey for the first time during these hearings.
According to a report by online news portal Ahval, after Zarrab testified that he had been arrested by the ‘financial guards’, the prosecutor asked him whether he meant ‘Turkish law enforcement officers’ and asked Zarrab how he had managed to get out of prison later on.
Zarrab, at first claimed that he was released through the efforts of his lawyers, though later he admitted to bribing officials to be released. Zarrab, in saying that he had ‘partly’ paid bribes to be released, is admitting to this crime for the first time. After being released from detention in Turkey, he had publicly denied the Turkish prosecutors’ claim that he had bribed officials to be released from prison.
Zarrab later testified that he had continued working with Halkbank following his release. In his deposition, Zarrab said that he met with Ali Fuat Taşkınoğlu, who had replaced Süleyman Aslan as Director-General at Halkbank, to negotiate the continuation of the Iranian trade.
Zarrab said that the purpose of this meeting was to resume the “old system” and that the new president Taşkınoğlu had asked him to hold a meeting with the international operations staff of the bank. Zarrab told the court that the bank officials asked for further and more detailed documents such as an accreditation letter during this meeting, and noted that he had had one other meeting with Taşkınoğlu. Hence, Aslan’s replacement Taşkınoğlu’s connection to Zarrab was established just before the lunch break.
Meanwhile, Ebru Gündeş, the popstar wife of Zarrab, has decided to file for divorce after almost eight years of marriage, Hürriyet daily reported. Gündeş told people close to her that she does not want her daughter Alara to be affected by Zarrab’s arrest in the US last year for evading sanctions on Iran, and his subsequent decision to turn state’s witness.
Turkish prosecutors last week ordered the seizure of Zarrab and his family’s assets, including property placed in Alara’s name. Gündeş did not have her assets seized due to a pre-nuptial agreement with Zarrab that kept their wealth separate.
Zarrab and eight other people, including Turkey’s former economy minister and three Halkbank executives, have been charged with engaging in transactions worth hundreds of millions of dollars for Iran’s government and Iranian entities from 2010 to 2015 in a scheme to evade US sanctions.
Zarrab was the prime suspect in a major corruption investigation in Turkey that became public in December 2013 and implicated the inner circle of the ruling AKP government and then-Prime Minister Recep Tayyip Erdoğan. Zarrab was alleged to have paid Cabinet-level officials and bank officers bribes to facilitate transactions benefiting Iran.
After Erdoğan cast the case as a coup attempt to overthrow his government orchestrated by his political enemies, several prosecutors were removed from the case, police were reassigned and the investigation against Zarrab was dropped in Turkey.
While the pro-Erdoğan media were declaring Zarrab a “national hero” for his “great contribution” to the Turkish economy with exports to Iran, the Iranian-born Turkish businessman was given Turkey’s top exporter award on June 21, 2015 by Economy Minister Nihat Zeybekci and Deputy Prime Minister and AKP Deputy Chairman Numan Kurtulmuş.
When Zarrab was detained in the US in March 2016, President Erdoğan tired to rescue him from prison, US media reported.
Erdoğan demanded the release of Zarrab as well as the firing of then-US Attorney Bharara during a private meeting with then-US Vice President Joe Biden on Sept. 21, 2016, devoting half the 90-minute conversation to Zarrab, David Ignatius wrote for The Washington Post on Oct. 12.
“Erdogan’s campaign to free Zarrab has been extraordinary. He demanded his release as well as the firing of Bharara in a private meeting with then-Vice President Joe Biden on Sept. 21, 2016, in which U.S. officials say half the 90-minute conversation was devoted to Zarrab,” Ignatius wrote.
“Erdogan’s wife [Emine Erdoğan] pleaded the case that night to Jill Biden [wife of Biden]. Turkey’s then-justice minister, Bekir Bozdag, visited then-Attorney General Loretta E. Lynch in October to argue that the case was ‘based on no evidence’ and that Zarrab should be released.”
Reports in October that Zarrab could have pled guilty rang alarm bells in Ankara. The Turkish government issued two diplomatic notes urging the US to notify Turkish authorities before relocating Zarrab to another facility.
President Erdoğan on Oct. 24 strongly criticized the US administration for allegedly trying to force Zarrab to give them names from the Turkish government, saying he would explain all the details.
Zarrab, who Erdoğan called a “philanthropist businessman” following a graft investigation in December 2013 and a citizen of Turkey who must be rescued from US prison, has been the focus of criticism by Erdoğan’s deputies and media after his revelations in the New York court.
The property of Zarrab and his family members was seized on Thursday as part of an investigation into espionage and providing confidential official information to a foreign government, launched by the Istanbul Public Prosecutor’s Office. According to a media report, the decision was taken as a measure to prevent Zarrab from smuggling his property outside Turkey.
Zarrab testified in federal court on Wednesday that he had bribed Turkey’s former economy minister, Mehmet Zafer Çağlayan, in a billion-dollar scheme to smuggle gold for oil in violation of US sanctions on Iran.
On Thursday Zarrab said that Turkey’s then-prime minister and current president, Recep Tayyip Erdoğan, personally authorized the involvement of Turkish banks in a scheme to evade US sanctions on Iran.
Zarrab also said for the first time on Thursday that Turkey’s Ziraat Bank and VakıfBank were involved in the scheme and that former Deputy Prime Minister Ali Babacan signed off with Erdoğan on the operation.
