Turkish-Iranian gold trader pleads guilty, set to testify

NEW YORK: Prosecutors have revealed that a wealthy TurkishIranian gold trader struck a plea deal to testify about a vast corruption scheme they say reached into the upper levels of the Turkish government – a development that could further strain relations between the United States and one of its key strategic allies.

Reza Zarrab will take the witness stand to detail how he and Turkish banker Mehmet Hakan Atilla laundered Iranian oil money in violation of US economic sanctions against Iran, a conspiracy involv- ing bribes and kickbacks to high-level officials, Assistant US Attorney David Denton said in opening statements at Atilla’s trial in New York City on Tuesday.

The scheme was “so large that it was protected by government ministers in Turkey and Iran,” Denton said.

Zarrab, 34, was arrested last year and jailed before entering a plea to bank fraud, money laundering and other charges in secret on Oct 26.

A charging document unsealed on Tuesday alleged that he met with banking government officials – “including the then-governor of the Central Bank of Iran and the then- finance director of the National Iranian Oil Company” – in 2012 to discuss transferring Iranian natural gas proceeds to a Turkish bank, and that he spoke about paying a bribe to a bank executive.

Zarrab accepted responsibility for “busting sanctions and laundering money” and would “tell the inside story and expose the truth behind all those elaborate lies” told by his onetime co-defendant to cover up the scheme, Denton said.

In his opening statement, defence attorney Victor Rocco attacked the credibility of Zarrab by casting him as an international conman.

Zarrab’s cooperation agreement was a “deal of a lifetime” that won him his release from a US jail and “shortcut back to his lavish life,” Rocco said.

The government witness, he added, has been “squirrelled away somewhere with FBI agents in some unknown place” while waiting for his turn to testify.

The prosecution in Manhattan has been major news in Turkey, where President Recep Tayyip Erdogan has repeatedly asked the US to release Zarrab.

Turkey’s deputy prime minister recently said Zarrab, who is married to Turkish pop star and TV personality Ebru Gundes, was a “hostage” being forced to testify against Turkey’s government.

Earlier this year, Zarrab hired former New York City Mayor Rudolph Giuliani and former US. Attorney-General Michael Mukasey in a failed effort to broker a diplomatic end to the case.