A gold trader with ties to the Turkish government on Thursday accused Turkish President Recep Tayyip Erdogan of personal intervention in a scheme that allowed Iran to dodge US and UN sanctions.
It’s the first time Erdogan has been named in the closely-watched US criminal case over Iran’s violations of international sanctions and movement of billions of dollars.
The case’s central figure, Reza Zarrab, an Iranian-Turkish gold trader, was arrested in Miami last year and has since been the case’s top named defendant. There are eight other defendants facing similar charges.
He quietly cut a plea deal last month and admitted to defrauding the United States, money laundering, and bank fraud, according to court documents.
On Thursday, Zarrab testified in federal court about Erdogan’s alleged role in Zarrab’s scheme, which involved laundering funds from Iranian oil and gas sales through Turkish banks, including the state-run bank, Halkbank.
Zarrab testified that, when the amount of money illegally flowing through Turkey’s Halkbank became too much to handle, Erdogan approved getting two more Turkish banks involved: VakıfBank and Ziraat Bank.
Zarrab said he received this information from the government official he claims to have bribed to take part in the scheme, former Turkish economy minister Zafer Caglayan. Caglayan denied all allegations in a Turkish probe into these allegations that started in 2013.
On Thursday, Erdogan responded to Zarrab’s testimony from Wednesday, saying Turkey “did the right thing” and did not violate US sanctions against Iran, according to CNN Turk.
“The prime minister of that time, Recep Tayyip Erdogan, and [then] Minister of Treasury Ali Babacan had given orders for them to start the trades, the banks,” Zarrab said Thursday. CNN has sought comment from the Turkish government on Zarrab’s testimony and is awaiting response.
In their court filings, the US government has not alleged that Erdogan cooperated in the scheme.