The controversial Iranian gold trader, Reza Zarrab, 34, who was
arrested in Miami in March 2016 for allegedly conspiring to evade US
sanctions against Iran is set to testify in US court against high
profile Turkish Government officials.
Zerrab was accused of engaging in hundreds of millions of dollars
worth of transactions on behalf of the government of Tehran,
money-laundering and bank fraud, and faces up to 95 years in prison.
Zarrab had last week pleaded guilty and was now the US government’s
star witness. He is set to testify against Turkish banker Mehmet Hakan
Atilla on a series of international corruption allegations that
reached the highest levels of the Turkish government.
Things started going awry for Zarrab in 2013 when he was detained by
Turkish authorities in a wide-ranging corruption investigation, along
with the sons of two cabinet ministers.
Prosecutors accused Zarrab of involvement in facilitating Iranian
money transfers via gold-smuggling, setting up bogus companies to buy
oil and gas from Iran in exchange for gold and bribing senior
ministers to cover it up.
The alleged “gifts” were said to include a $350,000 watch, a $37,000
piano and millions of dollars in cash – some of which was reportedly
transferred in shoeboxes to politicians or bureaucrats involved in the
In one incident, a Turkish government minister is claimed to have
received $500,000 in cash from Zarrab, which was delivered in a
chocolate box, along with a silver plate.
The allegations erupted when audio recordings of conversations between
Mr Zarrab and several politicians were leaked online.
Mr Zarrab denied all the bribery accusations at the time and claimed
his trading business worked within the law.
Three cabinet ministers resigned as their sons were implicated in
these recordings, and a fourth was dismissed from his post.
President Erdogan, who was then the prime minister, claimed the
recordings were manipulated, condemned the investigation and called it
“a judicial coup” orchestrated by the Islamist cleric Fethullah Gulen,
a former ally of his government, who is currently in self-imposed
exile in the US.
Soon the prosecutors were removed from the case, police investigators
were reassigned and the inquiry was dropped.
Zarrab was released after 70 days in detention, and was now being
described by Mr Erdogan as a philanthropist who had made huge
contributions to Turkish society.
Zarrab boasted in a later interview that he had helped reduce
Turkey’s current account deficit and received an award in a ceremony
attended by President Erdogan.
But the Zarrab saga took another turn when he decided to go to Disney
World with his wife and daughter in March 2016.
It is still not clear why Zarrab went to the US. Some speculate that
he must have known he could have been detained but took the risk
anyway, since he feared his life would be at stake if he stayed in
Turkey; others that he wanted to avoid possible extradition to Iran.
In November, speculation grew as to the whereabouts of Zarrab, as US
media reports suggested he had been removed from a federal prison and
was now co-operating with prosecutors to strike a plea bargain.
An NBC report also suggested that special counsel Robert Mueller was
investigating whether the Turkish government had offered former US
National Security Advisor Michael Flynn a sum of over $15m to ensure
that Mr Zarrab’s case was dropped, and to work towards the abduction
of Fethullah Gulen, whom the government claims masterminded the 2016
failed coup plot in Turkey.
These allegations were denied by Mr Flynn’s lawyers. However earlier
this year, Mr Flynn acknowledged he worked as a foreign agent
representing the interests of the Turkish government, having been paid
more than $500,000 to this end.
When Mr Zarrab was first arrested in the US, President Erdogan said
this case was of no interest to Turkey.
But since then he has allegedly lobbied for Mr Zarrab’s release in
talks in the US, called the prosecutors “secret agents of Fethullah
Gulen” and described the investigation as a plot against Turkey.
Turkish authorities have also opened an investigation into the US
prosecutors behind the case, claiming that the alleged evidence was
based on fabricated documents.
Many in Turkey believe the government fears Mr Zarrab’s testimony in a
Manhattan court could bring further embarrassment to top officials in
Will Mr Zarrab appear before the court? Will he testify against
Turkish officials? Will he confirm the alleged bank frauds? Will his
testimony lead to further indictments on others? What will come out at
the trial? How damaging will that be for future US-Turkey relations
was leading a lavish life, with two villas on the shores of the
Bosphorus worth around $40m (£30m) and gifts of million-dollar
paintings for his pop-star wife.
Zerrab’s holdings were said to include a private jet, around 20
properties, as well as luxurious cars and boats.
He was often seen posing for cameras with figures such as President
Recep Tayyip Erdogan’s wife Emine, to whose charity he is alleged to
have donated over $4m.