Ilhan Tanir
Nov 01 2017

"Zarrab has to give up all names and everything to get a deal"

Washington D.C. - Kenneth Rijock is a financial crime consultant based in Miami, Florida. A former lawyer, Rijock spent the 1980s as a career money launderer, working for narcotics trafficking organisations located in the United States, Europe and Canada. After serving time in Federal Prison, Rijock has been an adviser to law enforcement, intelligence services, and the private sector, as well as the financial crime consultant at World-Check. A Vietnam veteran, his autobiography, The Laundry Man, published by Penguin Press UK, is available in eight languages. His blog, Kenneth Rijock's Financial Crime Blog, covers money laundering and global financial crime.

Mr. Rijock responded to Ahval’s questions on the phone with regards to Reza Zarrab's trial and his conditions for a plea agreement. Zarrab is an Iranian-Turkish gold trader due to go on trial in New York in late November, accused of shipping bullion to Iran in return for sanctions-busting oil. 

Zarrab was arrested in Miami in March 2016 as he arrived for a holiday with his family and charged on four counts including money laundering and running an alleged racket to help Iran bypass U.S. sanctions imposed over its nuclear programme. According to U.S. prosecutors, the scheme involved ministers of the government of then-prime minister and now president Recep Tayyip Erdoğan.


What does getting a plea agreement mean in the U.S. justice system? How does it work?

If Zarrab changes his plea from innocent to guilty, then he would be required to enter into a plea agreement, which is a sort of a contract between government and defendant. It spells out what the government will do and what the defendant would do. In many cases the defendant would just plead guilty to one count, rather than several. Meaning that he would be looking at a shorter prison sentence.

In many cases he or she would plead guilty to a lesser crime. But in this Zarrab case, this will certainly not happen. This is an extraordinary case. In this case, the U.S. is seeking to impose its own will on an Iranian who did not carry out these crimes in the U.S., but the U.S. was affected. For political reasons, he will not get to plead to some minor charges. It won't happen. What would happen is he would enter as guilty to at least one serious count. In exchange for this benefit, he would be required to do any one of a number of things: For instance, he must be truthful and give full account of a story of crimes. By doing that, he might be implicating others in Iran, in Turkey or other countries. Because those statements and the evidence he gives most likely would implicate others.

Does he need to testify at trials against the individuals he may name?

He would be required to testify at trials against these individuals that he has given their names. So others will or could be indicted. And he would then need to sign the agreement that he will have to testify. Of course, if he is not truthful then his plea agreement goes out the window and his trial starts again, and he gets some 70 years or whatever the horrible sentencing he gets. Remember, the amount of prison sentence he would get would be proportionate to the amount of money that is involved in his case. And that's billions of dollars. So, he would be required to assist and that means of course other people being indicted and charged. It's called "substantial assistance." If he renders "substantial assistance", then the court could deviate and depart from the guidelines. We have something called "U.S. sentencing guidelines." And those are not mandatory, but they suggest the judge can give a shorter prison time than guidance asks for if Zarrab is qualified for "substantial assistance."

For "substantial assistance" to happen, he either needs to get other people implicated/indicted or help the U.S. to seize/recover a big chunk of money, or both.

Zarrab's co-defendant, Halkbank executive Mehmet Hakan Atilla’s lawyers think he might be already cooperating with the prosecutors? (Mr. Mehmet Hakan Atilla was the deputy general manager of publicly owned Turkish Halkbank. He was arrested in late March 2017 in New York JFK airport and his indictment was combined with Zarrab's.)

Zarrab has not filed any notice that he has intended to change his plea to guilty or to cooperate with the U.S. Attorney's Office. Why Atilla's attorney is claiming that his attorneys are not working with them cannot be ascertained from the pleadings. Anything else would be pure speculation, though Zarrab faces a long sentence if convicted, and he may be considering changing his plea. That would be the smart move on his part, because the evidence appears sufficient to obtain a conviction, and any appeal that he files later statistically has a small chance of success. Jury verdicts are generally sustained on appeal, unless there are serious errors of law at trial.

This may just be a way for Atilla's attorney to focus attention upon his client. If Zarrab pleads out, it may not come until just before the trial commences.

If Zarrab speaks, will the public know everything he has said? Will he be speaking in public?

No. He would be probably testifying in front of a grand jury. Grand jury proceedings are secret and they are not disclosed to the public. A grand jury would be comprised of a bunch of people, civilians, who would look at evidence and determine if someone should be punished with a crime.

What happens usually is he would testify against other defendants at the trial where other defendants are being tried. His testimony will be on the record and people get the transcript … and it would be public.

What are the conditions for a deal?

His lawyers may advise him to enter a plea deal if the evidence against him is so powerful that he would not have much of a chance at a trial. What generally happens if a client's lawyers are not happy about their chances and the evidence is powerful, then they may suggest him to plead guilty so he would receive a shorter sentence so that he will not die in prison.

Under our system, a defendant needs to serve 85 percent of his sentence. There is no parole in the U.S. anymore. These are huge sentences. The government doesn't have to give a deal. The prosecutor’s office may want him to go to trial for political reasons and in order for all that information to come out. So he needs to convince the prosecutor that a plea agreement would be the best interests of the U.S..

You have been following the Zarrab case since 2013. You have done dozens of analyses over the years. In your opinion, how would you qualify the evidence that the U.S. government appears to have?

Traditionally and typically U.S. law enforcement would work several years on a case until they get a bullet-proof case. I think they not only have bank evidence but they have telephone conversations that are recorded, emails, letters. I think, yes, they have a clear and convincing case against him.

Can Zarrab enter a plea deal without giving up names?

As part of his plea agreement he has to give up everything. He has to be absolutely truthful. But remember whatever he would like to say is not going to be immediately in the public domain. These statements that he will debrief, all will be private. And there is a certain reason for that, because when a suspect speaks then certain other people may be indicted. If testimonies are public then the implicated people would flee the jurisdiction and from justice.

So, he will need to give up names?

Yes. That's what pretty much what he needs to do. It's very rare for a defendant who enters a plea deal not to give names. The only other alternative; he has got so much evidence and the prosecutors would be satisfied. To make sure that they keep him honest, they would not sentence him until he gives his testimony and all the names of co-conspirators. So, they would delay the sentencing until he would then have to get a reduced sentence after implicating other people. So, this would take sometime. He would sit and talk about maybe 5–10 people and then those people named by Zarrab may all go to trials. If some of people he implicates are indicted then they themselves plead guilty and decide to cooperate and cut their own sentences. In many cases, the fact that Zarrab may testify against you, you may just take the deal they are offering. So that instead of receiving 50 years from a judge that they may give you after trial, you get 10 years by offering to talk early.


Tomorrow: 

  • What happens if Zarrab names head or top officials of another country as co-conspirators?
  • Is there a chance New York and the U.S. Treasury could separately charge Turkish banks?
  • How does the U.S. Treasury mechanism work? They are different from the court case?