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Turkish Iranian Gold Trader Pleads Guilty in Sanctions-busting Scheme

By Masood Farivar November 28, 2017

Turkish-Iranian gold trader has pleaded guilty and will be the star witness at a trial over an alleged scheme to evade U.S. sanctions against Iran.

Reza Zarrab pleaded guilty to a seven-count indictment against him on Oct. 26 and will take the stand on Wednesday, prosecutors revealed on Tuesday.

The plea followed weeks of speculation that the 33-year-old had cut a deal with the prosecution to avoid decades behind bars for his role in running an audacious, multibillion-dollar sanctions busting scheme involving senior Turkish officials.

Zarrab's guilty plea was an outcome Turkish officials had long feared and is likely to rattle already strained U.S.-Turkey relations.

Calling it a politically motivated plot against Turkey, Turkish President Recep Tayyip Erdogan unsuccessfully pressed the Obama and then Trump White House to drop the case.

"It raises the stakes for the trial going forward," said Nicholas Danforth, a policy analyst with the Bipartisan Policy Center in Washington. "We're going to find out what exactly Reza Zarrab knows, what exactly he testifies to in public, and either in the course of his testimony or in the coming weeks, who else prosecutors in the United States might look into."

With Zarrab pleading guilty, a case that includes nine defendants will proceed with the trial of only one of them – Mehmet Atilla, a former deputy general manager of Halkbank, one of Turkey's largest banks.

Seven other defendants, including a former Turkish economy minister, Mehmet Zafer Caglayan, remain at large.

Zarrab was arrested in Florida last year while on a family trip to Disney World and was later transported to New York to face charges of conducting hundreds of millions of dollars of business on behalf of the Iranian government and other Iranian entities in violation of U.S. sanctions.

A conviction on the the charges, which included conspiracy to defraud the United States, conspiracy to commit bank fraud and conspiracy to commit international money laundering, could bring decades in prison.

Nick Biase, a spokesman for the U.S. Attorney's Office for the Southern District of New York, said the plea agreement is sealed.

Zarrab's lead lawyer, Benjamin Brafman, declined to answer VOA's questions about his client's guilty plea.

Zarrab's testimony at Atilla's trial could come as early as Tuesday or Wednesday, Biase said.

Zarrab's role in the scheme first came to light in 2013 when Turkish police arrested him and 88 others as part of an investigation into corruption that implicated senior government officials, including Caglayan, the former economy minister. The Erdogan government later shuttered the investigation, calling it a plot by political opponents.

The so-called "gas for gold" scheme exposed by the Turkish investigation involved a series of shell companies and fictitious trades that allowed Iran to receive shipments of gold in exchange for its natural gas exports to Turkey.

The transactions undercut U.S. sanctions, which were aimed at cutting off Iran from international financial institutions.