Wednesday, March 23, 2016

US prosecutors charge Turkish 'Gold Trader' Zarrab at Heart of Turkey Graft Scandal.

U.S. Attorney Announces Arrest Of Turkish National For Conspiring To Evade U.S. Sanctions Against Iran, Money Laundering, And Bank Fraud . (Bloomberg)


Reza Zarrab, a gold trader at the center of a bribery scandal that engulfed Turkey’s leadership more than two years ago, was charged by the U.S. of running a scheme to help the Iranian government launder hundreds of millions of dollars and evade economic sanctions.

Zarrab, 33, owner and operator of Royal Holding A.S., and two others, are accused of using a web of companies over five years to induce U.S. banks to unwittingly process transactions that violated international sanctions against Iran, according to an indictment unsealed on Monday.

The charges are a blow to Turkish President Recep Tayyip Erdogan, who has repeatedly insisted that allegations of corruption against him and his inner circle were nothing more than a coup attempt.

In response to the scandal centered around Zarrab in 2013, Erdogan turned Turkey’s bureaucracy upside-down, dismissing thousands of state employees, police officers and prosecutors, with many jailed. He also labeled a group of former allies he blamed for the accusations, the Gulen religious movement, a terrorist organization.

Zarrab had denied any wrongdoing amid the Turkish investigation, saying the business was legitimate. The ministers also denied the charges. All charges against him and members of Erdogan’s government were eventually dropped.

The U.S. indictment suggests “that the allegations of sanctions-busting were strong enough to merit U.S. action, regardless of the political consequences," said Aaron Stein, senior fellow at the Atlantic Council’s Hariri Center for the Middle East and author of the book "Turkey’s New Foreign Policy."

This "is a big deal because of Zarrab’s obvious connections to the AKP," he said, referring to the party Erdogan founded, which has governed Turkey since 2002.

Not mentioned in the U.S. indictment is Turkiye Halk Bankasi AS, the Turkish state-run bank that processed Zarrab’s payments and whose former chief executive officer, Suleyman Aslan, was also embroiled in the scandal and briefly jailed. Police found millions of dollars stuffed into shoe boxes when they raided Aslan’s home in Dec. 2013. He said the money was donations he was collecting for Islamic schools in Turkey and Macedonia.

In a television interview on Turkey’s ultra pro-government A Haber news in April 2014, Zarrab estimated he had facilitated the transfer of about $12 billion in gold, or about 200 tons, to Iran. The surge in exports driven by that business was so rapid and so extensive -- gold transfers to Iran jumped from $53 million in 2011 to $6.5 billion in 2012 -- that it distorted Turkish trade figures. Read the full story here. Hmmm......Don't worry Obama will protect his 'brother' Erdogan.The indictment can be read here.





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