A Turkish court on Monday ordered the arrest of Reza Zarrab, a Turkish-Iranian gold trader who turned witness in the New York trial of a Turkish banker charged with evading US sanctions on Iran, over illegal construction work in İstanbul, according to a report by Turkey’s state-run Anadolu news agency (AA).
On Monday an İstanbul court ordered Zarrab’s arrest for carrying out an unlawful restoration of his villa in İstanbul’s Beykoz district as part of a case in which he faces up to three years in prison.
However, it was not clear whether Turkish authorities could act on the new warrant until Zarrab is freed from US detention. AA said the İstanbul judge had asked the Foreign Ministry, Justice Ministry and Turkey’s consulate general in New York look into Zarrab’s legal status.
Zarrab, 34, a dual Turkish Iranian citizen, was a US government witness in the trial of Mehmet Hakan Atilla, the former deputy general manager of Turkey’s state-owned Halkbank who was convicted of helping Iran evade US sanctions.
Zarrab, who was detained in the United States in 2016, had initially pleaded not guilty then flipped, becoming a US government witness. Admitting involvement in a multibillion-dollar gold-for-oil scheme to subvert US economic sanctions against Iran, Zarrab struck a deal with the prosecution for a more lenient sentence.
Halkbank’s Atilla was convicted by a New York jury on Jan. 3, 2018, on five counts of bank fraud and conspiracy and was sentenced to 32 months in prison. Turkish state-owned Halkbank had helped launder the proceeds of the complex oil-for-gold scheme that Turkish President Recep Tayyip Erdoğan had green-lighted and which a Turkish minister had taken millions of dollars in bribes to cover up.
Zarrab was believed to still be in custody while awaiting an expected reduced sentence in return for pleading guilty and providing evidence to incriminate others in the scheme. But a photograph of him taken while he was eating in a New York sushi restaurant on Sept. 21, 2018, showed him apparently at liberty.
The case of Halkbank has been one of the main points of disagreement between Ankara and Washington, whose relations have plunged into crisis this year over a host of issues, including differing policies in Syria and Turkey’s defense procurement.
Halkbank denies any wrongdoing and President Recep Tayyip Erdoğan condemned the trial as a political attack on his government. On Nov. 3, Erdoğan, without giving details, said he had discussed the issue of Halkbank with US President Donald Trump, helping the bank’s shares surge on Monday.
