Zarrab implicates Turkish bank, ministers in Iran sanctions-busting

(Updates with details of bribes in seventh paragraph.)

Reza Zarrab, an Iranian-Turkish gold trader, implicated a private Turkish bank and the country’s former economy minister in a sanctions-busting scheme with Iran, as he began his first day of testimony in a New York trial.

Zarrab said he used Aktifbank, owned by Ahmet Çalık, a close business ally of President Recep Tayyip Erdoğan, to funnel tens of millions of dollars to Iran to circumvent U.S. sanctions. Turkish Energy Minister Berat Albayrak, Erdoğan's son-in-law, was CEO of Aktifbank's parent group, Çalık Holding, at the time.

Zarrab is testifying in the court in the Southern District of New York after pleading guilty to evading U.S. sanctions and turning state’s witness. The trial of the remaining defendant, Mehmet Hakan Atilla, an executive of Turkey’s state-run Halkbank, has been labelled a political witch-hunt by Erdoğan and his ministers, who say the evidence is fabricated.

After opening an account with Aktifbank, with the help of then Minister for Europe Egemen Bağış, Zarrab said he began channelling cash to Iran’s central bank, starting with 5 to 10 million euros per day. Aktifbank cut him out of the loop in late 2011, Zarrab said, after which he turned to Halkbank in 2012.

“Aktifbank was working directly with the Iranians and I was eliminated," he told jurors.

Then, he said, he reached out to then Economy Minister Zafer Cağlayan because Halkbank’s CEO, Süleyman Aslan, turned him down on grounds of his public profile. Zarrab is married to Turkish pop star Ebru Gündeş.

Cağlayan, he said, requested a 50-50 profit share in the Iran business. Cağlayan was given 45-50 million euros, $7 million and 2.5 million liras between March 2012 and March 2013 as part of the deal, he said, after scanning through documents he had brought to the court. Zarrab said there were other bribes paid as well, but he didn't have the details at hand.

Zarrab said that after his arrest in Miami in early 2016 he hired lawyers to help organize a prisoner exchange between the U.S. and Turkey. Those efforts were unsuccessful, he said.

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