[ Editor’s Note: This case could turn out to be the “Gone with the Wind” movie of high-level corruption, in that Americans will have a front-row seat to watch how politically rotten and corrupt their government and society are.
This case could reveal like no other that it not only goes all the way to the highest levels of political leadership, but into the highest ranks of our judiciary.
The Intel community is intimately aware of this long-running problem, as such people, whether they are ex-attorneys general or not, have national security-risk profiles based not only on what they have done in the past that is now widely known publicly, but what they are capable of doing if certain entities were to request it, including foreign ones.
Legal representation in mega cases can often be based not on attorneys’ legal prowess, but their ability to get a case fixed. And that is often based on their past reputation of being “untouchable” from holding past top government positions and their ability to get a fix in with the highest possible current sitting officials, meaning the White House, where a case gets killed for “national security” issues.
This could turn out to be the mother of all corruption cases; and before it is over, the indictment list might grow to include some people who felt they were beyond the reach of the law for being charged with obstruction of justice… Jim W. Dean ]
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Special for the Armenian Weekly and VT
In a small courtroom in Manhattan, New York, there is a legal drama playing out, which may have serious consequences for the U.S., Turkey and Iran, but more critically for Turkish President Recep Tayyip Erdoğan. This court case is a ticking time bomb, which may explode in President Erdogan’s face, despite all his clandestine efforts to diffuse it.
Reza Zarrab, a 33-year-old Turkish citizen of Iranian descent, was arrested in Miami on March 17, 2016, as soon as he got off a plane. He stated that he had come to the U.S. with his wife and daughter to see Disney World.
But the three charges against him were serious—conspiring to evade U.S. sanctions against Iran, money laundering and bank fraud. He was promptly transferred to a New York jail, where he currently sits. And the connection to President Erdogan? Read on, as this is an international thriller in the making.
For several years, the U.S. had slapped sanctions on Iran to contain Iran’s nuclear ambitions. The U.S. had imposed strict controls on all international banks and corporations, banning them from doing any business with Iran. Therefore, Iran faced great difficulty getting paid for its oil exports. A couple of Iranian businessmen, Babek Zenjani in Tehran and Reza Zarrab in Istanbul, stepped up to circumvent the sanctions.
Oil payments would be made to companies and banks in Turkey, huge amounts of gold would be bought with those funds, and then the gold would be exported from Turkey to Iran, directly or perhaps with a few stops in Dubai, United Arab Emirates, and other places in between. This scheme, although very simple, required huge amounts of money and gold transferred on a daily basis, which would undoubtedly attract the unwanted attention of government officials.
That problem would be addressed by generous bribes, commissions, and police protection. When you are moving billions of dollars daily, a few hundred million dollars to government officials is just the cost of doing business.
So, with the system set up in Iran and Turkey, Reza Zarrab quickly became a “gold trading” tycoon in Turkey, making headlines with large donations to religious charities linked to Erdogan as a philanthropist, marrying a popular pop star singer, and buying several mansions along the Bosphorus.
Erdogan’s government also bestowed Turkish citizenship on him with a special decree. There were a few mishaps in the scheme, such as 1.5 metric tons of gold seized in the cargo of an airplane in Istanbul by a “misguided” or “uninformed” customs official, who was promptly suspended and sent to “exile” to the interior part of Turkey.
But the scheme blew up and came out in the open on Dec. 17, 2013, when Turkish police, or rather, a certain section of Turkish police not loyal to Erdogan, arrested Reza Zarrab and the sons of three cabinet ministers, along with a few bank leaders.
They had indisputable evidence including wiretaps, videos, telephone conversations, and documents proving the large amounts of bribes passed on from Zarrab to the ministers and bank officials. The evidence also included money counting machines in living rooms, several million dollars in shoeboxes, expensive gifts, and money being delivered to the ministers’ homes in suit bags. All the dirty laundry came out.
One of the most interesting telephone conversations released by the investigators and reported by several media outlets was between Erdogan and his son, when Erdogan instructs his son to get rid of all cash in the house, after he hears about the raids to his ministers’ houses. His son’s response after several hours of frantic work reveals that despite all his attempts to distribute the cash at home to colleagues, relatives, or associates, there is still some 30 million euros left at home.
Despite the evidence, Erdogan did manage to escape the investigation unscathed, fired the three ministers, and also fired all the police officials and prosecutors involved in this operation, claiming that this was a conspiracy and coup attempt by the followers of Fethullah Gulen, the Muslem fundamentalist preacher living in exile in Pennsylvania. Most of the police officials and prosecutors are now in jail, and a few lucky ones have fled the country.
Reza Zarrab was released from prison in two months, in Feb. 2014. His defense was very simple: “If you don’t release me immediately, I start talking.”
It is not known why Zarrab chose to come to the U.S. Perhaps he decided to seek protection there, albeit in jail, instead of facing attempts to silence him in Turkey. Meanwhile, his partner in Iran, Babek Zenjani, was arrested and sentenced to death for defrauding the Iranian Oil Ministry for four billion dollars.
The Zarrab affair gets even more interesting in the U.S. The man who brought the charges against Zarrab was Preet Bharara, the U.S. attorney for the Southern District of New York—a star attorney who made his name as a fearless prosecutor of Wall Street wrongdoers. Erdogan’s concern about the Zarrab case was evident when he asked former Vice President Joe Biden to intervene. But luckily for him, just as the case against Zarrab started moving, the new president Trump fired Bharara, along with hundreds of other Obama appointees.
Zarrab has hired nearly 20 elite white-collar criminal lawyers to defend him. The last two hired lawyers are especially noteworthy, Rudi Giuliani, former New York Mayor and U.S. Attorney, and Michael B. Mukasey, the former U.S. Attorney General, who have promptly met top Turkish government officials. The presiding U.S. District Judge Richard Berman has asked defense lawyers to explain Giuliani and Mukasey’s role in the case, and to disclose if the government of Turkey is paying their fees.
Prosecutors claimed that the hiring of Giuliani and Mukasey might present a conflict of interest because their firms also represent some of the banks alleged to be victims in Zarrab’s case. Prosecutors also said that Giuliani and Mukasey were hired to try to reach a political settlement in the case.
In another twist, Mukasey’s son, Marc, has been widely speculated as a candidate to become the New York U.S. Attorney under Trump, to replace Preet Bharara. The Zarrab case will be one of the agenda items when Erdogan meets Trump in the next few weeks.
This thriller involving power, bribery, corruption, oil, and gold will come to an end soon, but it is highly doubtful that justice will be served…
From the UK Daily Mail:
Federal prosecutors in Manhattan have accused former New York Mayor Rudy Giuliani and ex-Attorney General Michael Mukasey of going above their heads in order to get charges tossed against a Turkey-based business mogul. Giuliani and Mukasey were hired to defend Reza Zarrab, who was arrested last year in Miami, for allegedly laundering money for Iran.
In their effort to get Zarrab’s case tossed, Giuliani and Mukasey want to meet with President Donald Trump’s officials, instead of speaking with prosecutors on the case directly. Zarrab’s attorneys sent a letter to the judge on the case saying that what Giuliani and Mukasey are up to ‘quite frankly is none of the government’s business’.
Zarrab, a 33-year-old gold-trader, was arrested in Florida last year for allegedly laundering money for Iran. In the year since Zarrab was arrested, his case has grown ever more complex and far-reaching.
As Turkey presses the Trump administration to get the charges tossed, an increasingly messy web of connections has come into view, prompting questions about conflicts of interest, Turkish corruption and pro-Turkey lobbying by individuals near the center of Trump’s orbit.
On Friday, federal prosecutors raised fresh concerns about a recent trip that Giuliani and Mukasey made to Turkey to consult with President Recep Tayyip Erdogan about the case.
Zarrab, a 33-year-old gold-trader married to a Turkish pop star, and several others are accused of conspiring to evade US sanctions against Iran, using a network of companies to mask the true nature of transactions and defraud multiple banks.
Prosecutors say they processed hundreds of millions of dollars for Iran and claim to have thousands of pages of bank, email and phone records to prove it. Zarrab pleaded not guilty.
It’s not surprising the involvement of Giuliani and Mukasey would raise red flags. Giuliani, one of candidate Trump’s staunchest supporters, advises the president, in an unofficial capacity, on cybersecurity. Both his and Mukasey’s law firms have represented bank victims in Zarrab’s case, which prosecutors say may be a conflict of interest.
Trump fired Preet Bharara (pictured), the US attorney who launched the case against Zarrab. Giuliani’s company has also registered as a foreign agent for Turkey, a trait shared with another of Trump’s advisers: Michael Flynn.
The former Trump national security adviser had to register retroactively for work he performed in 2016 that could have benefited Turkey’s government. At the time, Flynn was a Trump campaign adviser. There have been no indications Flynn ever lobbied on Zarrab’s case.
Flynn’s foreign agent filing says his intelligence firm was hired by a company owned by a Turkish businessman close to Erdogan, and conducted research into a Muslim cleric and Erdogan foe who also emerges in Zarrab’s case.
If there’s intrigue about the defense team, it extends to the prosecution. Last month Trump fired Preet Bharara, the US attorney who launched the case against Zarrab, as part of a purge of Obama-era prosecutors.
Bharara was dismissed even though Trump made a point during the presidential transition of asking him to stay. Bharara’s possible replacement: Mukasey’s son, Marc Mukasey, who is frequently mentioned as a contender. That could put the younger Mukasey in charge of prosecuting the man his father has been trying to set free.
Bharara’s possible replacement could be Mukasey’s son, Marc Mukasey (pictured), who would be put in charge of prosecuting Zarrab, the man his father has been trying to set free
For Turkey, the saga is bigger than Zarrab’s case. It has its origins in a massive 2013 corruption scandal in Turkey involving allegations of bribery, fraud and smuggling. Zarrab and Turkish state-owned bank Halkbank were at the center of the storm. Homes linked to several top Erdogan lieutenants were raided and three sons of Turkish ministers detained.
Erdogan dismissed the allegations as a conspiracy by Fetullah Gulen, the Muslim cleric who lives in Pennsylvania and leads a global movement of schools and charities. The corruption scandal eventually subsided. Yet it contributed to a dramatic falling out between Erdogan – then Turkey’s prime minister – and Gulen, whose movement had long been allied with Erdogan’s party.
The rivalry has only grown worse. Turkey has been feverishly seeking Gulen’s extradition from the US after blaming him for a failed coup attempt last July that killed more than 270 people.
Michael Flynn, Trump’s former national security adviser, had to register retroactively for work he performed in 2016 that could have benefited Turkey’s government. Gulen denies involvement in the coup, and the US has said Turkey’s evidence is unconvincing.
Although the Turkish charges against Zarrab were ultimately dropped, his subsequent arrest in the US has brought fresh attention to concerns about corruption in Turkey. Worsening matters for Erdogan, the deputy CEO of Halkbank, Mehmet Hakan Atilla, was arrested in New York this week on charges of conspiring with Zarrab. Turkey’s response has been forceful. Erdogan’s government has argued that Atilla’s prosecution is politically motivated.
And at a meeting this week with Secretary of State Rex Tillerson, Turkish Foreign Minister Mevlut Cavusoglu offered another explanation: Bharara, the former Manhattan prosecutor, is loyal to Gulen. ‘He retweets or likes everything that is anti-Turkey,’ Cavusoglu said.
Rudy Giuliani and ex-Attorney General Michael Mukasey’s attempts to throw out case of Turkish-American ‘money launderer’ raise questions about conflicts of interest after the pair met with the President Erdogan
- Reza Zarrab, a Turkey-based business mogul, was arrested in Florida last year for allegedly laundering money for Iran
- Former New York City Mayor Rudy Giuliani and former Attorney General Michael Mukasey are among those helping Zarrab
- Turkey is pressing the Trump administration to get Zarrab’s case tossed
Gordon Duff posted articles on VT from 2008 to 2022. He is a Marine combat veteran of the Vietnam War. A disabled veteran, he worked on veterans and POW issues for decades.
Gordon is an accredited diplomat and is generally accepted as one of the top global intelligence specialists. He manages the world’s largest private intelligence organization and regularly consults with governments challenged by security issues.
Duff has traveled extensively, is published around the world, and is a regular guest on TV and radio in more than “several” countries. He is also a trained chef, wine enthusiast, avid motorcyclist, and gunsmith specializing in historical weapons and restoration. Business experience and interests are in energy and defense technology.
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