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Abu Dhabi, UAESunday 24 June 2018

Turkey rounds up associates of gold trader who plotted to avoid US sanctions against Iran

Turkey's state-run news agency reported that police had detained 17 associates of Reza Zarrab

Gold trader Reza Zarrab implicated a number of Turkish Banks as well as high ranking government officials. Mr. Zarrab is accused of managing a billion-dollar scheme to smuggle gold for Iranian oil and conspiring to violate United States sanctions against Iran. Chris McGrath/ Getty Images
Gold trader Reza Zarrab implicated a number of Turkish Banks as well as high ranking government officials. Mr. Zarrab is accused of managing a billion-dollar scheme to smuggle gold for Iranian oil and conspiring to violate United States sanctions against Iran. Chris McGrath/ Getty Images

Turkey has begun rounding up associates of a gold trader who is giving evidence in New York of high-level corruption and a plot to avoid sanctions against Iran in a case that has roiled tensions between Washington and Ankara.

The state-run news agency Anadolu reported on Tuesday that Turkish police detained 17 associates of Reza Zarrab days after prosecutors moved to seize his assets.

It is the latest example of how the case has set Turkey on edge as evidence emerges of high-level corruption.

Zarrab is the star witness in the case against a Turkish banker accused of violating sanctions against Iran. In testimony delivered in Manhattan’s federal court he has already implicated the country’s president and a former minister in a complex web of financial transactions he says were used to release Iranian oil and gas money from Turkish banks.

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Read more:

Turkey's president Erdogan approved the scheme to skirt around US sanctions on Iran, gold trader tells US court

Gold trader tells US court of scheme to launder Iranian oil money and circumvent US sanctions

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The Turkish government insists no laws were broken and that the case is politically motivated.

Zarrab, a wealthy Turkish-Iranian gold trader, has admitted his role and gave evidence for a fifth day on Tuesday as defence lawyers prepared to cast doubt on his claims during their cross-examination.

A day earlier it emerged that he had been caught on tape claiming that one way of finding leniency in the US was to admit to crimes you had not committed.

The revelation came in a public court filing by lawyers for the defendant Mehmet Hakan Atilla, which included a summary of a 2016 prison phone call during which Zarrab reportedly said there was a perceived need to lie “in America in order to make it out of prison”.

The details were part of a defence complaint that the prosecution was dragging its feet in handing over crucial evidence.

The letter continued: “Zarrab is proclaiming his willingness to fabricate testimony out of whole cloth in order to obtain a reduced sentence.”

It was contained in a public filing which was quickly deleted on Monday.

Zarrab’s credibility is a central part of the defence case.

Atilla, deputy general manager of the state-owned Halkbank, has denied any role in the plot.

So far Zarrab has testified to aiding Iran by disguising money transfers as payments for fake gold and food sales, routed through Dubai, which were designed to appear as if they complied with US Sanctions.

Turkish-Iranian gold trader Reza Zarrab (third from left in the stand in this courtroom sketch) has lifted the lid on his enormous wealth, explaining how he took a commission on the millions of dollars flowing through a network of banks, front companies and money exchanges. Elizabeth Williams via AP
Turkish-Iranian gold trader Reza Zarrab (third from left in the stand in this courtroom sketch) has lifted the lid on his enormous wealth, explaining how he took a commission on the millions of dollars flowing through a network of banks, front companies and money exchanges. Elizabeth Williams via AP

On Thursday, he said he believed Recep Tayyip Erdogan, who at the time was Turkish prime minister, signed off on a decision to bring two Turkish banks into the scheme.

Mr Erdogan, now president, has repeatedly demanded Zarrab’s release.

He returned to the theme on Tuesday saying the trial was being staged to “blackmail” and “blemish” his country.

He claimed it was a ploy to distract his country while Washington strengthens Syrian Kurdish groups that Turkey considers to be terrorists.

“Turkey has no plans against the United States, but it is clear that the US has plans against us,” he said.

Soon after he spoke it emerged that Turkish police had detained 17 people as part of an investigation related to Zarrab.

They included three of the gold trader’s employees on suspicion of delivering documents from the network of Muslim cleric Fethullah Gulen to US prosecutors, according to the state-run Anadolu news agency.

Turkish authorities have accused Mr Gulen, who is based in the US, of plotting last year’s failed coup.

The conspiracy unveiled in a packed Manhattan courtroom has captivated the Turkish public. As well as the geo-political currents, alleged international financial subterfuge and links to the coup attempt, it features a wealthy, well-known witness whose marriage to a pop star made him a mainstay of the country’s gossip pages.

This week they reported that Zarrab asked an associated to consult fortune tellers about his decision to work with prosecutors, according to papers seized from his associates.

While deciding whether to co-operate, he also mulled whether he could return to Dubai, where he spent some of his youth and where he retains business interests.

“Ask the lawyer: ‘Can he settle in Dubai after he finishes his sentence if he co-operates with the prosecutors in the US? Can he arrange the residence permit if there is direct deportation to Dubai from the US?’” he wrote in a note, according to Hurriyet.