Reza Zarrab, a Turkish-Iranian gold trader at the center of an international corruption case, is set to tell a New York jury the “inside story” of a plot to evade American sanctions on Iran that reached the highest levels of Turkey’s government, a prosecutor said.
Zarrab is the U.S. government’s star witness in the prosecution of Mehmet Hakan Atilla, a deputy chief executive officer at Turkiye Halk Bankasi AS, who is accused of conspiring with Zarrab to launder money and funnel Iranian funds through the U.S. financial system. Zarrab, who has pleaded guilty after being charged with Atilla, is likely to take the witness stand later on Tuesday or on Wednesday.
"Atilla and his lies played a crucial role in giving Iran access to U.S. dollars and U.S. banks,” Assistant U.S. Attorney David William Denton Jr. told jurors at the start of the case. “Iran did not need soldiers. Iran needed a banker.”
The disclosure of Zarrab’s cooperation, minutes before the lawyers addressed jurors on Tuesday, roiled markets in Turkey, as the Lira fell as much as 1.7 percent and Halbank shares dropped 7.9 percent. Yields on 10-year bonds have surged to records above 13 percent.
The revelation ends weeks of mystery after the gold trader suddenly stopped participating in the defense. With the U.S. expected to present evidence of corruption at the highest reaches of the Turkish government, the case has sparked outrage from Turkish president Recep Tayyip Erdogan, who claims the prosecution is a plot to undermine his country’s economy.
Zarrab was arrested in the U.S. last year on charges that he helped bank executives and others in Turkey to help Iran disguise hundreds of millions of dollars in transactions that went through the U.S. financial system. Now, instead of standing trial, Zarrab will testify against Atilla, 47, and recount the alleged scheme.
Hmm, a DoJ international money laundering investigation and Turkey's corrupt Erdogan government, now who do we know that's connected to both of those things? Oh that's right, former Trump national security adviser Michael Flynn.
Former National Security Advisor Michael Flynn's alleged plan to forcibly extradite a Turkish cleric living in Pennsylvania is now a part of Special Counsel Robert Mueller's investigation, according to a report from The Wall Street Journal.
Why it matters: Flynn had previously done consulting work on behalf of the Turkish government, which he failed to disclose before joining the Trump administration. This meeting would have taken place during the transition and after he had accepted his position as Trump's national security advisor, which occurred on November 18.
The details: Flynn and his son, Michael Flynn, Jr., reportedly met with Turkish representatives in New York in December to discuss delivering cleric Fethullah Gulen, who is living legally in the United States in exile, to Turkey in exchange for as much as $15 million. The plan would have involved transporting Gulen to a Turkish island prison via a private jet. Turkish President Recep Tayyip Erdogan has accused Gulen of fomenting 2016's failed coup attempt against him.
And it's not the first time this plan came up as Flynn held a similar meeting with high-level Turks, including Turkey's foreign minister and Erdogan's son-in-law last September. Former CIA Director James Woolsey attended that meeting, telling the WSJ that the plan then involved "a covert step in the dead of night to whisk this guy away." Woolsey later turned down his consulting fee for the meeting and alerted then-Vice President Joe Biden about its content.
Is it any surprise that a day after Flynn's lawyers met with Mueller's team that suddenly we have a major announcement in another huge federal case involving Turkey's government and money laundering? I don't believe in coincidences that large, folks, and neither should you.
What does Flynn know about Zarrab, and what does Zarrab know about Flynn? What do they both know about Erdogan...and Trump? I'm betting plenty, and both of them are supposedly cooperating with the Justice Department.