ISTANBUL: A trial which has strained Turkish-U.S. ties before it even started opens this week in New York despite the possible absence of a defendant who Turkey says is cooperating with prosecutors in what it calls “a clear plot” against Ankara.
Turkish-Iranian gold trader Reza Zarrab, charged with conspiring to evade U.S. sanctions on Iran, has dropped out of sight in the last two months, prompting Turkey’s prime minister to suggest he has reached a plea deal with U.S. authorities.
James Margolin, a spokesman for U.S. prosecutors in Manhattan, declined to comment on whether Zarrab was cooperating with the authorities. A lawyer for Zarrab, Benjamin Brafman, declined to comment for this article.
Zarrab and eight other people, including Turkey’s former economy minister and three executives of Turkish state-owned Halkbank, have been charged with engaging in transactions worth hundreds of millions of dollars for Iran’s government and Iranian entities from 2010 to 2015 in a scheme to evade U.S. sanctions. Only Zarrab and Mehmet Hakan Atilla, one of the Halkbank executives, have been arrested by U.S. authorities.
Ex-minister Zafer Caglayan, who has not been arrested by the United States and remains in Turkey, is also accused of receiving tens of millions of dollars in bribes from the proceeds of the scheme. The Turkish government has said he acted within Turkish and international law.
Caglayan, Zarrab and Atilla have denied all the charges against them. Victor Rocco, a lawyer for Atilla, declined to comment on the case. Caglayan could not be reached for comment. Halkbank says all its transactions fully comply with Turkish and international regulations.
Turkish President Tayyip Erdogan’s government has said the case has been fabricated for political motives. The tensions it has exacerbated between Ankara and Washington – NATO allies – have hit investor sentiment toward Turkey, and traders say it has also contributed to the lira’s fall to record lows.
U.S. prosecutors claim that the defendants helped Zarrab use his network of companies to supply currency and gold to the Iranian government and Iranian entities, violating U.S. sanctions.
The prosecutors have alleged that the defendants used front companies and fake invoices to trick U.S. banks into processing transactions disguised to appear as though they involved food, which is exempt from the sanctions.
Turkish Prime Minister Binali Yildirim said the charges were baseless, and that Turkey had not violated its own or international laws regarding exports and trade.
