Turkish-Iranian gold trader Reza Zarrab testified in federal court on Wednesday that he had bribed Turkey’s former economy minister, Mehmet Zafer Çağlayan, in a billion-dollar scheme to smuggle gold for oil in violation of US sanctions on Iran, The New York Times reported.
In US custody since March 2016, Zarrab had been expected to stand trial with Mehmet Hakan Atilla, an executive with Turkey’s state-owned Halkbank, claimed by prosecutors to have been involved in the scheme. But Zarrab secretly pleaded guilty last month and agreed to cooperate with authorities.
“Cooperation was the fastest way to accept responsibility and to get out of jail at once,” Zarrab said in response to a prosecutor’s question as to why he agreed to work with US authorities.
On his first day of testimony Zarrab detailed how he had carried out the scheme, saying he had paid Çağlayan tens of millions of dollars in bribes, going through accounting records for the jury that were displayed on a screen which listed the amounts and dates of the payments.
Drawing a colored chart illustrating how the scheme worked, Zarrab counted at least 10 transactions that got the money “from where it couldn’t leave to where it could leave,” responding to a question posed by Judge Richard Berman.
Zarrab told prosecutor Sidhardha Kamaraju that he had hired lawyers to explore whether he could be released as part of a prisoner exchange but said it had been unsuccessful. Former New York mayor and Donald Trump ally Rudolph Giuliani and former US attorney general Michael Mukasey had been retained to secure a diplomatic resolution to Zarrab’s case, meeting with Turkish President Recep Tayyip Erdoğan and senior Trump officials, to no avail.
The prosecution of Zarrab, Atilla and seven others who remain at large, including Çağlayan, has set off alarm bells in the Turkish government.
In a 2013 investigation in Turkey, when Erdoğan was prime minister, allegations had surfaced that Çağlayan had taken bribes, but the probe was shut down by corrupt Turkish officials and the police and prosecutors involved in it were removed, the prosecutor told the jury, adding that the FBI, however, had pursued the allegations, and their investigation “tells the same story” as the Turkish police had discovered.
By the end of the day in Turkey and more than four hours after Zarrab testified to having bribed Çağlayan, news of the testimony had not been reported by either the Turkish state broadcaster or the state-owned news agency, but Twitter was “abuzz with tens of thousands of Turks following live feeds from other news outlets, such as BBC Turkish and other independent news sites, causing ‘Zafer Caglayan’ to become a worldwide Twitter trending topic,” The New York Times reported.