A top Turkish government official recently met with Attorney General Loretta Lynch and told her the prosecution of Turkish-Iranian tycoon Reza Zarrab was “based on no evidence,” according to a court filing unsealed on Nov. 15.
The filing from federal prosecutors in Manhattan said Turkish Justice Minister Bekir Bozdağ also asked that Zarrab be released from U.S. custody and returned to Turkey. The meeting happened approximately two weeks ago, according to the filing.
Zarrab, a gold trader in Turkey with dual Turkish-Iranian citizenship, was arrested in March when he arrived in Florida for a family vacation. Prosecutors charged him with conspiring to violate U.S. sanctions and help Iranian entities conduct hundreds of millions of dollars’ worth of financial transactions through U.S. banks.
Local prosecutors in 2013 charged him with bribing Turkish ministers with ties to then-Prime Minister Recep Tayyip Erdoğan, charges which were later dropped following a switch in the prosecutorial team.
Reza Zarrab also known as Rıza Sarraf, a 33-year-old Iranian-Turkish citizen, became the symbol of a massive alleged graft and influence-peddling scheme that became public in December 2013 when Turkish prosecutors arrested him and detained government ministers with close ties to Erdoğan, then prime minister.
His 2013 arrest, his confessions — and his eventual exoneration in 2014 — revealed a worldwide scheme that involved the transfer of billions of dollars of gold to Iran, effectively circumventing US banking sanctions.
Zarrab was also accused of giving millions in bribes, to expedite the gold shipments, to cabinet ministers closely tied to Erdoğan.
In 2013, Erdoğan called for the investigation and arrest of Zarrab and members of the government following an attempted coup by the followers of Fethullah Gülen, an outlawed cleric and former ally of the government. Erdoğan launched a purge, which is ongoing, of the Turkish judiciary and police force to cleanse it of officials involved in the investigation. Erdoğan praised Zarrab as a philanthropist, charges were dropped and he was later awarded a prize for exporter of the year by the government.
Zarrab, who was married to a Turkish pop star, lived in a $72m mansion on the Bosphorus, drove with a police escort and gave lavish gifts, including a $37,000 piano and a $350,000 Patek Philippe watch to a cabinet official, according to a copy of records of that interrogation.
During that interrogation he also said his associates would purchase vast quantities of gold from abroad, including a planeload from a Ghanaian company, and carry it to Iran in handbags on daily flights. This was when Iran was cut off from international banking systems and the gold was intended as payment for the natural gas Iran was selling to Turkey.
According to the Turkish government, payments would be paid into an account at Halk Bank, a major Turkish lender, but could not be transferred to Iran because of the sanctions.
Zarrab’s vast scheme, which eventually swelled to nearly $12bn, according to an interview he gave to local TV before his 2013 arrest, allowed the Iranian central bank to recover the costs of that gas while the international community was applying pressure on Tehran over its nuclear programme.
The then-chief executive of Halk Bank, Süleyman Aslan, was detained in Turkey in 2013, when shoeboxes full of US dollars were found in his house which investigators alleged were bribes given to help facilitate the gold for gas deal. Mr Aslan had denied any wrongdoing and said the money was meant as a donation for an Islamic school in Macedonia. He is not a subject of the US indictment.
CORRUPTION SCANDAL
The 2013 corruption scandal in Turkey refers to a criminal investigation that involves several key people in the Turkish government. All of the 52 people detained on 17 December were connected in various ways with the ruling Justice and Development Party (AKP). Prosecutors accused 14 people – including Süleyman Aslan, the director of state-owned Halkbank,Reza Zarrab, and several family members of cabinet ministers – of bribery, corruption, fraud, money laundering and gold smuggling.
On 17 December 2013, the Financial Crimes and Battle Against Criminal Incomes department of the İstanbul Security Directory detained 47 people, including officials from TOKİ (Housing Development Administration of Turkey), the Ministry of Environment and Urban Planning, and the District Municipality of Fatih. Barış Güler, Kaan Çağlayan and Oğuz Bayraktar, who are sons of the Turkish ministers, Muammer Güler (Minister of the Interior), Zafer Çağlayan (Minister of Economy), and Erdoğan Bayraktar (Minister of Environment and Urban Planning) were implicated, as well as Mustafa Demir, the mayor of the district municipality of Fatih; the real estate businessman Ali Ağaoğlu; Süleyman Aslan, the general manager of Halkbank and the Iranian tycoon Reza Zarrab. who was considered as the key suspect in the investigation, who was reportedly involved in a money laundering scheme particularly regarding his transfer of gold and money to Iran via Turkey’s government-controlled Halkbank as part of a strategy to bypass United States-led sanctions on Iran. Demir was detained on accusations of approving the construction license for a hotel near the route of the recently inaugurated Marmaray railway, despite warnings from Japanese engineers that the construction could put the tunnel at risk of collapsing. Demir was investigated for ordering the ministry report to be shelved in exchange for bribes.
Moreover, Egemen Bağış, the Minister of European Union Affairs, is cited in newspaper articles as a potential suspect of bribery related to Reza Zarrab who has business affiliations with Babak Zanjani.
The police confiscated some US$17.5 million as money used in bribery during the investigation; US$4.5 million was found at Süleyman Aslan's residence and US$750,000 at Barış Güler's. Prosecutors accused 14 people including Barış Güler, Kaan Çağlayan, Süleyman Aslan and Reza Zarrab of bribery, corruption, fraud, money launderingand smuggling gold. On 21 December, the court ordered the arrest of these 14 people.
In total, 91 people were detained in the investigation; 26 of them were arrested by the court.
Several newspapers reported that a new investigation was expected on 26 December, possibly involving then-Prime Minister Erdoğan's sons, Bilal Erdoğan and Burak, as well as certain Al-Qaeda affiliates from Saudi Arabia such as Sheikh Yaseen Al Qadi and Osama Khoutub. The police officers in Istanbul Security Directorate, newly appointed by the government just a few days previously, refused to carry out their orders, and the Deputy Director of Public Prosecutions did not approve this new operation. The man behind this second investigation, Prosecutor Muammer Akkaş, was dismissed on the same day. Akkaş said he was prevented from performing his duty.
A second wave of arrests was planned, and a list was leaked to the press.
ERDOĞAN AND HIS SON'S BİLAL PHONE RECORDS
In 2013 Turkey Erdoğan and his son’s Bilal phone records leaked allegations. A heated controversy erupted after the release on YouTube of audio recordings in which Erdogan was reportedly heard telling his son, Bilal, to urgently get rid of tens of millions of dollars. Erdogan has claimed the recordings were a montage but the experts begged to differ.
