Ilhan Tanir
Nov 29 2017

“The mystery witness is Mr. Reza Zarrab”

Reza Zarrab, an Iranian-Turkish gold trader who was charged with evading U.S. sanctions against Iran with the help of Turkish officials, has pleaded guilty and will cooperate as a witness for the U.S. government against a Turkish state-bank official, court documents show.

An attorney for former Halkbank official Mehmet Hakan Atilla submitted a motion before Tuesday’s hearing to adjourn the trial, saying that the government had produced thousands of new documents about a key witness, Reza Zarrab, right before the trial.

U.S. District Judge Richard Berman denied the request, saying it was Atilla who had demanded a quick trial because he was incarcerated and adding that information about the sanctions regime against Iran – including the U.S. Congress testimony of a Treasury Undersecretary [David Cohen], who will be a witness at the trial – was public information.

Judge Berman also noted:

The government should also make clear that the mystery witness is Mr. Reza Zarrab. (This is something that experienced counsel knew and should have known for several months.) ... The government should now make its case, so the public will know what it is all about.

The New York Times tweeted the news about Zarrab’s plea deal in Turkish:

“Reza Zarrab pleaded guilty and will testify against Hakan Atilla.”

Zarrab’s guilty plea was signed on Oct. 26, 2017 in a closed court session.

Reza Zarrab pleaded guilty to seven charges in total, six of which concerned the Iran sanction-busting scheme, bank fraud and money laundering, while the final one referred to his attempt to bribe a prison guard, Law360 reporter Peter Brush wrote.

The prosecutor’s opening statement was about the role Zarrab played in Iran’s “economic jihad” by converting oil into gold and then to U.S. dollars, and how Atilla provided the methods for the scheme.

They “covered up their lies with millions of dollars of bribes to the highest-level officials of the Turkish government,” Assistant U.S. Attorney David William Denton Jr. was quoted by Bloomberg as telling the jurors.

U.S. prosecutors also plan to call on a Turkish police officer who was involved in the 2013 Turkish investigation which had been suppressed after implicating four then-ministers. Zarrab is expected to talk about the 2013 wiretaps where he allegedly admitted Turkish President Recep Tayyip Erdoğan’s knowledge of the scheme, Wall Street Journal reporter Nicole Hong said.

Former Halkbank official Atilla’s attorney, Victor Rocco, build his defence around the peripheral role of his client, whom he described as “a dedicated hard-working civil servant caught in an international storm.”

Besides Zarrab, Rocco accused former Turkish Economy Minister Zafer Çağlayan and called former Halkbank CEO Süleyman Aslan “Zarrab’s true partner in crime”, Brush reported.

Rocco also noted that former mayor of New York City, Rudy Giuliani, had tried to bargain with U.S. President Donald Trump on behalf of Erdoğan to get Zarrab out of jail. Giuliani and another Trump ally, Michael Mukasey, a former U.S. attorney general, went to Turkey and met Erdoğan, Reuters had reported.

Special counsel Robert Mueller is also investigating whether Erdoğan allegedly offered Trump’s former national security adviser, Michael Flynn, $15 million for the charges be dropped against Zarrab and for Fethullah Gülen, a U.S.-based Islamic preacher that Turkish government blames for the failed July 2016 coup, be extradited, NBC reported.

Zarrab's plea also appears to confirm that Turkey, as a NATO ally, worked intentionally to undercut sanctions on Iran and helped Iran's nuclear program. Allegedly, billions of dollars went into the pockets of the Iranian regime, and in turn, the Iran Revolutionary Guards likely used that money to support organisations like Hizballah and the Assad regime in the region. All the while, Erdoğan was supporting anti-Assad fighters and jihadists. At a time when Turkey's NATO ties are facing intense scrutiny, Zarrab's plea deal to confirm the Erdoğan government's role will inject more tension into Ankara's already strained ties with the West. 

(Court ruling shared by Adam Klasfeld, Courthouse News.)