Zarrab location undisclosed as trial nears

The plot is thickening around the whereabouts of Iranian-Turkish gold smuggler Reza Zarrab, amid speculation he may have entered into a plea bargain to charges of evading sanctions on Iran.

On Saturday, Ahval was first to report that the Federal Bureau of Prisons had updated Zarrab’s inmate profile to show him as “released” from a detention centre in Brooklyn. Later that day, the prosecutor’s office made a statement saying Zarrab was still “in federal custody”, without providing further details. But what kind of custody?

On Monday, we asked the chief public information officer of the Southern District of New York, James Margolin, clarify whether or not Zarrab, 34, was in jail, or out. Had he been transferred to another location, perhaps a hotel or apartment, under the watch of U.S. authorities? “We cannot comment further,” was the response. Zarrab is still shown as released on the prison bureau's website.

"He's still in the same kind of custody, in federal custody, that's all I can say," Şeyda Yildırım, Zarrab’s lawyer, said by telephone when asked whether he was now being held outside of jail.

Speculation is mounting that Zarrab, interned pending trial for circumventing sanctions on Iran, has made an agreement with U.S. prosecutors to give details of the money-laundering scheme and implicate bigger players, possibly including senior Turkish political figures, in return for a lighter sentence.

Zarrab is the trial’s “stealth” defendant after failing to appear in court since September, the lawyer of his co-defendant, Mehmet Atilla, said two weeks ago, raising speculation Zarrab had agreed a plea bargain. His name wasn’t mentioned by prosecutors and the judge in a latest hearing to consider lifting a protective order on evidence. In addition, Zarrab’s lawyers have neither filed a challenge to the government’s indictment of Sept. 6, nor put forward questions that should be asked of possible jury members ahead of the Nov. 27 trial start-date. 

Zarrab jail

Zarrab was arrested in Miami in March 2016 as he arrived for a holiday with his family and charged with 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 allies, loyalists and ministers of the government of then prime minister and now President Recep Tayyip Erdoğan. Turkey says evidence is fabricated.

Zarrab and Atilla, a deputy chief executive of Turkey’s state-run Halkbank, are accused of laundering hundreds of millions of dollars through the U.S. financial system on behalf of Iran to help it avoid sanctions limitations. They both deny the charges. 

The scheme involved “fraudulent transactions papered over with false documents, front companies, and lies to U.S. regulators,” along with “the bribery of senior Turkish government ministers,” prosecutors said in an Oct. 16 filing.

On Friday, events surrounding the trial took another apparent twist when NBC reported that Special Counsel Robert Mueller was examining whether Mike Flynn, the former nominee for National Security Advisor of President Donald J. Trump, had discussed ways to free Zarrab with Turkish officials at a meeting in December.

As Yavuz Baydar, Ahval’s editor-in-chief, said in an editorial on Monday, the Zarrab case is becoming a main focal point of Turkish foreign policy. It is being personalized to suit the agenda of Erdoğan, who is concerned the trail of evidence in the case will lead to his closest confidants, and perhaps himself.

Last week, Erdoğan sent his prime minister, Binali Yıldırım, to Washington on an official visit that included a brief meeting with Vice-President Mike Pence. Yıldırım stated afterward that the Zarrab case was one of the issues raised during the meeting.

Erdoğan’s involvement in the case has been intense. He demanded Zarrab’s release and the firing of then U.S. Attorney Preet Bharara, who brought the case, in a private meeting with then-Vice President Joe Biden on Sept. 21, 2016. U.S. officials said half the 90-minute conversation was devoted to Zarrab. He also appealed personally to U.S. President Barack Obama in two phone calls in December and January, according to the Washington Post. 

President Trump has since fired Bharara, but his deputy has taken up the case.