Gold Trader Vexing Turkey Denies Illicit Dealings With Russia

Prosecutors entered this photo of Turkish gold trader Reza Zarrab as evidence in a trial of a Turkish banker accused of laundering money for Iran in contravention of U.S. sanctions.

MANHATTAN (CN) – Reza Zarrab, a gold trader who has implicated Turkey’s president and ministers in billions of illicit transactions, denied from a New York courtroom Tuesday that he was caught in a similar scheme: a traffic stop at the Turkish-Russian border involving a car carrying $15 million.

The allegation came toward the beginning of Zarrab’s cross-examination, in a case involving billions of dollars laundered to Iran.

For five days, Zarrab has spoken about bribing Turkey’s most powerful with millions so that they would approve a complicated system of funneling the transactions to Iran via sham gold trades and spurious humanitarian aid.

Prosecutors claim that banker Mehmet Hakan Atilla, from the state-run Halkbank, was the “architect” of that system, a claim that took a hit during cross-examination on Tuesday, as Zarrab acknowledged he barely spoke to the man.

Asked by Atilla’s attorney Cathy Fleming, Zarrab acknowledged he and Atilla were “not fond of” each other.

Fleming then suggested that Zarrab had participated in other illicit transaction to Iran involving other countries, including Russia.

“It is true that I was involved in money exchange pertaining to Iranian trade outside the country of Turkey,” Zarrab said.

Pressing the 34-year-old witness on the details, Fleming interrogated Zarrab on an alleged incident involving his chauffeur driving from Russia to Turkey.

“My driver was never stopped with $15 million in cash” with Russian transactions involving Iran, Zarrab said, strenuously denying the allegations.

“My driver was never stopped in Russia with $150 million in cash ever, ma’am,” Zarrab said.

Zarrab did, however, acknowledge being involved in a business deal involving a plane from Ghana carrying 1.5 tons of gold.

Born in Iran, Zarrab is typically described as a Turkish gold trader, though he held citizenship in multiple countries and operated several businesses. Fleming asked at one point whether he was unwelcome in the country of his birth.

“You have problems in Iran,” she asked. “You have legal problems if you go to Iran, isn’t that true?”

“To my knowledge, there is not any, ma’am,” Zarrab said.

Since agreeing to cooperate with U.S. prosecutors, Zarrab’s fortunes in Turkey also have taken a dive.
Once an ally of the country’s President Recep Tayyip Erdogan, Zarrab saw both his and his family’s assets seized by Turkish prosecutors, a day after testifying that Erdogan gave the order to launder billions to Iran.

Zarrab flipped to the U.S. government after a prior plan to spring himself out of prison using politically connected lawyers fell apart.

Former New York City Mayor Rudy Giuliani and ex-U.S. Attorney Michael Mukasey both represented Zarrab in an attempt to find what they called a “diplomatic solution” to his incarceration.

Asked about what he thought of the prospects of that effort, Zarrab replied: “I thought that it may become possible, ma’am.”

Fleming pressed: “And, in fact, you are furious with people in Turkey that it did not work; isn’t that true?”

Zarrab insisted, “I don’t have any anger towards anybody, ma’am.”

He also claimed not to harbor any criticism of his conditions in U.S. federal lockup, an experience he refused to admit was unpleasant.

“We should not be offensive to MDC,” Zarrab said, abbreviating the name of the Metropolitan Detention Center in Brooklyn.

While locked up at a federal facility in Manhattan, Zarrab admitted to paying a $45,000 bribe to a prison guard, a feat that he claimed to have pulled off through his Turkish attorney.

Zarrab said that he obtained alcohol and a personal cellphone for his money. He also admitted to smuggling Dayquil from the prison commissary and smoking synthetic marijuana in that jail.

“I don’t know whether this is a crime or not in law,” Zarrab said, referring to smoking marijuana in prison. “It may be a regulation within the jail.”

His testimony continues Wednesday.

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