Turkish gold trader says he paid $45,000 bribe to U.S. prison guard

Reza Zarrab, who is cooperating with prosecutors, testified that he got the money through a Turkish attorney whom he did not identify
Wednesday, 06 December 2017 07:21

A Turkish-Iranian gold trader testifying in the trial of a Turkish banker accused of helping Iran evade U.S. sanctions said on Tuesday that he paid a $45,000 bribe to a U.S. prison guard to obtain alcohol and use the guard's phone.

Reza Zarrab, who is cooperating with prosecutors, testified that he got the money through a Turkish attorney whom he did not identify. In exchange, the guard brought him alcohol and Dayquil when he was sick, and allowed Zarrab to use his cell phone. The phone was used to call his wife, daughter, uncle, sister and one of his lawyers, Zarrab said. Those calls weren't recorded by the government, in contrast with calls that are officially permitted. Separately, he also admitted smoking synthetic marijuana in jail.


Zarrab said that he made between $100 million to $150 million from the laundering scheme, charging a rate of $4 to $5 per $1,000 moved on behalf of Iran. His personal take was reduced, he said, by the bribes he had to pay, the fees taken by the bank and the expense of the operation. 

He testified on Monday morning that he paid money to secure his release from the Turkish prison.

"Were those payments bribes?" Assistant U.S. Attorney Sidhardha Kamaraju asked. "Partly," Zarrab replied.


Mehmet Hakan Atilla, an executive at Turkey's state-owned Halkbank, is on trial in Manhattan federal court. He has pleaded not guilty. Zarrab testified on Tuesday under cross-examination by Atilla's attorney, Cathy Fleming, that he and Atilla did not like each other. Zarrab said he worked with Halkbank from 2012 to 2016 to help Iran spend its oil and gas revenue abroad using fraudulent gold and food transactions. He said Atilla helped structure those transactions.

Under questioning by Fleming, Zarrab said he attended meetings with Atilla a "handful" of times during that period. He said he had a "close relationship" with Süleyman Aslan, who was Halkbank's general manager and Atilla's superior until 2013. Zarrab said he sometimes complained about Atilla to Aslan. Zarrab had testified earlier in the case that he complained to Aslan when Atilla refused to sign off on a transaction related to a sham sale of food to Iran.

Under direct examination last week, Zarrab testified that at that time, Atilla did not know the transaction was a sham and so was confused by it.

Zarrab said he paid bribes to Aslan, repeating his testimony in direct examination, but never to Atilla. 

Pressing the point, Fleming had Zarrab testify that he had no text-message exchanges with Atilla and didn’t have Atilla’s phone number in his phone contacts. Zarrab said that he had far more extensive contact -- Fleming said as many as 1,000 messages -- with Suleyman Aslan, the former chief executive of Halkbank who he previously said he bribed.


Zarrab said he refused to meet with Atilla's lawyers to discuss the evidence after he agreed to cooperate, partly because he was angry about statements they made about him in court filings. He also acknowledged complaining about Atilla to Aslan.

Prosecutors have charged nine people in the case with conspiring to help Iran evade sanctions, but only Zarrab, 34, and Atilla, 47, have been arrested by U.S. authorities. Prosecutors disclosed last week that Zarrab pled guilty in October to helping Iran avoid sanctions and bribing a guard. 

He told the court that he admitted to U.S. prosecutors that he had paid bribes in Turkey, misstated his Turkish income between 2002 and 2016 and procured prostitutes for other people around 2013. He said prosecutors told him he would not be charged for those crimes because they were outside U.S. jurisdiction. Zarrab has accused Turkish politicians, including President Recep Tayyip Erdogan of helping Iran evade U.S. sanctions. Erdogan on Sunday dismissed the case as a politically motivated attack on Turkey. 


Zarrab was recorded in a 2016 jailhouse phone call saying that one needed to lie "in America in order to make it out of prison," according to a summary of the conversation released on Monday.

"Reza says in such a country, in order to get out or get a reduced sentence, you need to admit to crimes you haven’t committed," the summary says.

The summary was contained in a public court filing by lawyers for the Turkish banker, Mehmet Hakan Atilla. It was part of a letter to the judge in which the lawyers complained that prosecutors had withheld summaries of five audio recordings and other potentially critical evidence for several days past a deadline the judge had set. The two-page document summarizing the conversations, which is stamped "Subject to Protective Order," was apparently filed publicly by mistake, and it was soon removed from the public docket.

On Monday, Zarrab testified that he paid bribes to obtain his release after being arrested in December 2013 in an investigation by the Turkish police, and that he soon restarted his sanctions-busting activities.

Jurors in the New York case have been told that corrupt Turkish officials shut down the investigation and organized a purge of the police and prosecutors who ran it. They were also told that Zarrab had put up bribe money for judges, "so that everything could be made to go away." Two other conversations summarized in the court filing appear to touch on Zarrab's efforts to resolve his case through diplomatic or political means.

The summary of an Oct. 20, 2016, conversation quotes Zarrab as being told, "six people will be exchanged for four people." It adds, "Don’t worry they will release/exchange you, too."

In a Nov. 4, 2016, call, an unidentified male speaker was recorded telling Zarrab that his Turkish lawyer had already talked to "Mevlüt and Bekir” — apparently references to Foreign Minister Mevlüt Çavuşoğlu and the justice minister then, Bekir Bozdağ — and that the lawyer would talk to "Beyefendi," an apparent reference to Turkish President Recep Tayyip Erdoğan. The male speaker suggests that "Beyefendi" might call President Barack Obama. In 2016, Erdoğan raised Zarrab’s case with Vice President Joseph R. Biden Jr. during talks at the United Nations. He did so again with President Trump this past September.

Based on reporting by soL News Turkish, NYT, Reuters, Bloomberg.