Reza Zarrab testifies on bank exec's role in sham food sales

Reza Zarrab gave his most detailed account yet of how he claims an executive of Turkey's state-owned Halkbank devised key parts of a plan to launder money for Iran through fake food sales
Saturday, 02 December 2017 07:13

Iranian-Turkish gold trader Reza Zarrab testifying for U.S. prosecutors in a New York court on Friday gave his most detailed account yet of how he claims an executive of Turkey's state-owned Halkbank devised key parts of a plan to launder money for Iran through fake food sales, Reuters reported.

The pace of testimony has been slowed as Reza Zarrab speaks through a Turkish translator and is sometimes questioned about telephone calls in the Turkish language that are played for the Manhattan jury.

Zarrab pleaded guilty and is cooperating to aid the prosecution of Turkish banker Mehmet Hakan Atilla, a Halkbank executive.

On Friday, Zarrab testified that Atilla played an important role in a scheme to let Iran spend its oil and gas revenue abroad through gold trades and sham food sales. Zarrab said the scheme shifted from gold trades to purported food sales, in which no food was sent to Iran, after U.S. sanctions changed in 2013, the report said.

Zarrab testified on Thursday that Atilla was initially not receptive to the food scheme, and did not understand that the food sales were fake. However, Zarrab said on Friday that Atilla eventually came up with some features of the food transactions himself, such as moving money from one of Zarrab's companies to another to conceal the link to Iran, it added.

According to the report, Zarrab said Atilla later identified a "loophole" that allowed Iran to use gas revenue, but not oil revenue, to buy gold. Halkbank has said all of its transactions complied with national and international regulations.

Over three days of testimony, Zarrab has implicated top Turkish politicians, including President Recep Tayyip Erdoğan. Zarrab said on Thursday that Erdoğan personally authorized two Turkish banks to join the scheme when he was prime minister.