Accessibility links

Breaking News

U.S. Says Alleged Mastermind In Iran Sanctions Case Won't Stand Trial

Both Turkish banker Mehmet Hakan Atilla (left) and Turkish-Iranian businessman Reza Zarrab are in U.S. custody. (combo photo)
Both Turkish banker Mehmet Hakan Atilla (left) and Turkish-Iranian businessman Reza Zarrab are in U.S. custody. (combo photo)

A wealthy Turkish-Iranian businessman who was the alleged mastermind in what U.S. prosecutors say was a high-level conspiracy to help Iran evade U.S. sanctions will not stand trial this week as scheduled, though the case is proceeding against his co-defendant.

U.S. Judge Richard Berman announced on November 27 as jury selection got under way on the case that Reza Zarrab will not not stand trial and that Turkish banker Mehmet Hakan Atilla "is the only defendant in this trial."

Both Atilla and Zarrab are in U.S. custody.

Berman gave no explanation for Zarrab's absence from the trial after a series of unexplained no-shows at pretrial hearings. The development deepened the mystery surrounding the case and renewed speculation that Zarrab has cut a deal with prosecutors to testify rather than go on trial.

NBC News, Bloomberg News, and other U.S. media have reported that Zarrab, 34, is cooperating with U.S. prosecutors.

Zarrab’s name appeared on a list of possible witnesses and names that may come up during the trial, which was handed out to prospective jurors on November 27.

The close ties of Zarrab and other defendants with the government of Turkish President Recep Tayyip Erdogan has turned the case into a major irritant in U.S.-Turkish relations.

Turkish Deputy Prime Minister Bekir Bozdag earlier on November 27 repeated Ankara's demand that prosecutors drop the case, which he said had "no valid evidence" and "no legal basis."

Bozdag, who is Ankara's government spokesman, asserted that the aim of the case was to cause the collapse of Turkey's economy, in an apparent reference to the plunge of the Turkish lira last week to a record low against the U.S. dollar in reaction to a development in the case.

U.S. prosecutors have denied Turkey's accusations, while the judge has urged Turkey to provide any evidence it has that could prove the defendants' innocence to the court rather than hurl accusations at the prosecutors.

In court papers, prosecutors allege that Zarrab used a network of businesses and Atilla's bank, Turkish state-owned Halkbank, to funnel cash and gold to Iran while duping U.S. banks into processing the transactions.

The scheme, which allegedly occurred between 2010 and 2015, violated U.S. prohibitions against Iran using the U.S. financial system or U.S. dollars to transact business, prosecutors say.

Court documents say the defendants in carrying out the scheme paid tens of millions of dollars in bribes in cash and jewelry to Turkey's then-economy minister, Mehmet Zafer Caglayan.

Caglayan, who has denied the charges, and six other high-ranking co-defendants in the case remain in Turkey.

In an indication of why the case has become so important to Erdogan, who has pressed repeatedly for Zarrab's release, prosecutors said in a recent court filing that Zarrab once told another defendant he had spoken with Erdogan directly about the alleged scheme.

Bozdag said on November 27 that there was "pressure" on Zarrab to confess to "slanderous" claims.

Zarrab's name has also come up in connection with allegations being investigated by U.S. Justice Department Special Counsel Robert Mueller.

In that case, investigators are probing whether Turkey's government may have paid former White House national security adviser Michael Flynn to secure Zarrab's release as well as the deportation of a U.S.-based Turkish cleric, whom Erdogan blames for a failed coup against him last year.

With reporting by NBC News, AFP, dpa, AP, and Reuters