U.S. Prosecutors: Iranian Merchant Reza Zarrab and Erdogan Had Connections

U.S. prosecutors say that Reza Zarrab, a wealthy gold trader on trial for violating U.S. sanctions against Iran, used the name of then-Prime Minister Recep Tayyip Erdogan of Turkey to advance his business activities and even sought his assistance. Reuters reports that new details of the indictment were submitted on Friday and are set to be reviewed in a federal court session in New York on Monday. However, on Friday, following the release of this news by Bloomberg, the value of the Turkish lira against the U.S. dollar dropped by one percent. Recep Tayyip Erdogan has not been accused of any crime in this case, but the investigation into Reza Zarrab has complicated U.S.-Turkey relations. Zarrab's lawyer declined to comment on the new information, and Turkish government officials have not yet made any statements. The U.S. Attorney's Office has accused Reza Zarrab, born in Iran, of helping the Iranian government and institutions move hundreds of millions of dollars in assets to circumvent sanctions between 2010 and 2015. Nine individuals have been indicted in this case, but only two, Reza Zarrab and Mehmet Hakan Atilla, a manager at Turkey's Halkbank, are currently in custody in the U.S. The trial is set to begin on November 27. Mr. Atilla's lawyer requested on Friday that the trial be postponed to January, arguing that part of the defense preparation needs to occur in Turkey, and Mr. Atilla's imprisonment in Manhattan makes this difficult. Prosecutors in the latest evidence submitted to the court stated, 'We believe the new evidence presented will show that the Turkish government and officials of its banks were an inseparable part of the process of circumventing sanctions.' According to the prosecution, recorded phone conversations and other documents indicate that Reza Zarrab was acting in the interests of Recep Tayyip Erdogan. In one of these conversations dated April 16, 2013, Zarrab told another defendant that he was considering establishing a bank for conducting banking transactions for Iran. The U.S. Attorney's Office states that Reza Zarrab and Recep Tayyip Erdogan, who was then the Prime Minister of Turkey, spoke four days prior to this date at a wedding ceremony. According to the prosecution, in the recorded phone conversation, Zarrab tells the other defendant, 'I explained the matter at the wedding. I will tell him in the next meeting, Mr. Prime Minister, if you approve, grant me permission.' Lawyers for Mehmet Hakan Atilla stated, 'Reza Zarrab had no role in this case,' and Mr. Atilla may be the only defendant present in court. This statement has led some to predict that Reza Zarrab may cooperate with the prosecution and that the charges against him may change.