The news is by your side.

Zarrab Says He Bribed Former Turkish Economy Minister Up to 50 Million Euros

Reza Zarrab, a Turkish-Iranian gold trader who currently testifies at a Manhattan court on charges of evading U.S. sanctions against Iran, admitted that he gave 45 to 50 million euros of bribe to former Turkish Economy Minister Zafer Caglayan to get an official permission of using state-run Halkbank as a cover in the sanctions-evasion scheme.

Mr. Zarrab, who became “a star witness” in the case against Turkish public bank Halktank deputy CEO Mehmet Hakan Atilla, began to testify on Wednesday. He told the court judge that he contacted Mr. Caglayan after his attempts to get former Halkank Director Suleyman Aslan on the board failed.

The Halkbank general director refused to work with him because he was too visible due to his famous wife, Ebru Gundes who is a pop star in Turkey.

The economy minister demanded 50 percent of the share with of the business with Iran, Mr. Zarrab told the court. He read his notes detailing how much he paid to the Turkish minister.

He paid 45 to 50 million euros, $7 million and 2.465.000 TL to Mr. Caglayan.

He said he thinks that he so far paid 45 to 50 millions of euros to Mr. Caglayan who is being tried in absentia.

Zarrab Hires Giuliani, Mukasey to Work Out Prisoner Exchange With Turkey

He also acknowledged that he hired former New York Mayor and President Donald J. Trump aide Rudy Giuliani and former U.S. Attorney General Michael Mukasey to work for a prisoner exchange with Turkey.

After pleading guilty on 7 counts of crimes, he said he hired Mr. Giuliani and Mr. Mukasey to work out a prisoner exchange with Turkey, decided to flip when it failed.

“I pleaded guilty to 7 crimes. Defrauding the United States, IEEPA violations. Money laundering. Bank fraud. Conspiracy to commit bank fraud. Paying bribe to a federal prison guard,” Mr. Zarrab told jurors at the court.

Zarrab stated that he decided to cooperate with the U.S. prosecutors to get out of the jail as soon possible.

He said that “cooperation was the fast way to accept responsibility and to get out of jail.”

Mr. Zarrab also revealed the role of Halkbank executive Mehmet Hakan Atilla. He states that Atilla knows a lot about the sanctions evasion scheme, calls him the most knowledgeable person in the bank about sanctions rule.

How Gold Trade and Sanctions Evasion Works?

Mr. Zarrab explains before the court with a complicated diagram how he is using gold to pay Iran’s international payments. Here is how (simplified):

Iran sold gas and oil to Turkey’s state-run companies, Tupras and Botas, both of which have accounts at Halkbank, Turkey’s state bank. Zarrab’s scheme was to take money out of Halkbank.

Turkey couldn’t pay Iran directly by dollars due to sanctions, and Zarrab used several mechanisms to benefit Iran. He used Halkbank and several other financial institutions throughout the process.

Turkey’s payment for oil and gas eventually went to Zarrab’s company — all transactions until now took place within Halkbank.

He would then purchase gold through Royal Group. His couriers used to load suitcases with gold and transport directly to Dubai.

Since Turkey was paying Iran for oil and gas, Turkish customs officials wrote “Iran” as the final destination of gold. Gold would never go to Iran because Iran under sanctions can’t make international payments.

Mr. Zarrab’s operatives would exchange gold with UAE currency dirham in Dubai and make payments to companies on behalf of Iran. Payments were made through different banks like Standard Chartered, as well as American banks.

From Turkey’s payment for oil and gas to the transportation of gold to Dubai, Mr. Zarrab’s scheme involved at least 10 transactions. Halkbank is at the center of it.

Comments are closed.