Turkish-Iranian gold trader Reza Zarrab on Wednesday began testifying for U.S. prosecutors in the trial of an executive at Turkey's state-owned Halkbank accused of taking part in an international money laundering scheme to help Iran evade U.S. sanctions.
U.S. prosecutors have charged nine people in the case, though only Zarrab and Atilla are known to be in American custody. The other defendants include the former head of Halkbank, Suüleyman Aslan, and former economy minister, Zafer Çağlayan.
Prosecutors have said the defendants ran a complex money laundering scheme that involved smuggling gold and faking purchases of food to give Iran access to American dollars, violating U.S. sanctions.
Assistant U.S. Attorney David Denton told jurors in his opening statement on Tuesday that Atilla had expertise in economic sanctions that he used to design the transactions.
Zarrab, a 34-year-old dual citizen of Turkey and Iran, was arrested on a trip to the U.S. in March 2016 as he prepared to take his family to Disney World.
Zarrab was charged in the U.S. with conspiring to help the Iranian government and Halkbank make hundreds of millions of dollars in financial transactions that violated U.S. sanctions. Some of the transactions were made through U.S. financial institutions, investigators said, clearing the way for a prosecution in New York.
The indictment broadens the case targeting Zarrab over the sanctions evasion, fueling tensions between the U.S. and Turkey. Zarrab and Halkbank Deputy General Manager Mehmet Hakan Atilla, who was arrested while in the U.S. in March 2017, are scheduled to stand trial soon. If convicted, they face prison terms up to 30 years.
Turkey argues that the case has been turned into a political move against Ankara. President Recep Tayyip Erdoğan on Sept. 8 slammed the U.S. administration for filing charges against Çağlayan, calling the decision a political step taken against the Turkish state.
Previously a report in Turkey's Akşam newspaper said that a suspect linked to the Gülenist Terror Group (FETÖ) M.T. assisted police chiefs tied to the terror group in handing over documents regarding the 2013 police operations to Bharara while he was conducting the investigation into Zarrab.
Mahir Ünal, a deputy chairman and spokesperson of the ruling Justice and Development Party (AK Party), on Tuesday said the charges were a "play" staged with the help of the Gülenist Terror Grup (FETÖ) and described the case as a "political" one lacking legal basis.