A U.S. judge on Monday rejected an Iranian Turkish tycoon’s at the centre of a corruption scandal that engulfed President Recep Tayyip Erdoğan bid to dismiss an indictment accusing him of conspiring to conduct hundreds of millions of dollars in transactions for the Iranian government and other entities in order to evade U.S. sanctions.
U.S. District Judge Richard Berman in Manhattan denied the request by lawyers for Reza Zarrab, also known by the name Rıza Sarraf, who contended prosecutors had overreached when they charged a foreign citizen engaging in business abroad that is not illegal under foreign law.
Berman sided with prosecutors, who had contended that Iranian-born Zarrab and others violated the law by using the U.S. financial system to process transactions for his Iranian clients, whose identities he concealed from U.S. banks.
"The court finds that the indictment alleges a domestic nexus between Zarrab and his co-conspirators' conduct and the United States, i.e. the exportation of services from the United States," Berman wrote.
Lawyers for Zarrab did not immediately respond to requests for comment.
ZARRAB WAS ARRESTED IN FLORIDA
Zarrab, 33, was arrested in Florida in March while en route to Disney World with his family.
The case threatens to reopen a case that reached right into Erdoğan’s inner circle and to tarnish the party that he founded. It will also deepen existing tensions between Turkey and the United States.
The case has drawn much attention in Turkey, where prosecutors in 2013 accused Zarrab, along with others, of having paid cabinet-level officials and bank officers bribes to facilitate transactions benefiting Iran.
Turkish President Recep Tayyip Erdoğan, who was then prime minister, cast the case as a coup attempt orchestrated by his political enemies. Several prosecutors were removed from the case, police were reassigned, and the investigation was dropped.
MILLION DOLLARS IN CASH
Zarrab, an Iranian-born Turkish citizen, was detained and charged in Istanbul in 2013 in a huge corruption case that posed the biggest challenge to Erdoğan, the man who has dominated Turkish politics for more than a decade as Prime Minister and then as President.
The allegations centred on a claim that Zarrab was using a loophole in US sanctions on Iran to buy oil and gas in exchange for gold. The tycoon, who owns a private jet and is married to a Turkish pop star, was accused of bribing senior ministers in the ruling Justice and Development Party (AKP) in order to facilitate the transfers.
The gifts were said to include a $37,000 piano, a $350,000 watch and millions of dollars in cash. Zarrab was allegedly able to call in favours from ministers that ranged from the release of an impounded plane to a request for a police escort to help him escape Istanbul’s notorious traffic jams.
ERDOĞAN DESCRIBED THE TYCOON AS A ‘PHILANTHROPIST’
The allegations exploded into the public domain in December 2013 with a string of high-profile arrests. Three cabinet ministers resigned after their sons were implicated. Erdoğan decried the investigation as an attempt to overthrow his government by supporters of his ally-turned-enemy, Islamic cleric Fethullah Gülen. He ordered a huge purge of police, prosecutors and judges. All charges against Zarrab and those linked to the government were dropped. Erdoğan later described the tycoon as a “philanthropist” whose work had “contributed to the country”.
Lawyers for Zarrab said that the US investigation had “absolutely no link” with the 2013 scandal.
