Reza Zarrab
Reza Zarrab is an Iranian-born Turkey-based businessman. He has quadruple Iranian, Azerbaijani, Turkish and Macedonian citizenships.
On 19 March 2016 he was arrested in the United States, and is accused of being a member of an international criminal organization. He was charged with evading the US economic sanctions on Iran and money laundering in an alleged racket scheme to help Iran bypass the sanctions, involving ministers of the Turkish government of then prime minister and now president of Turkey, Recep Tayyip Erdoğan.
His father, Hossein Zarrab, had a close relationship with Mahmoud Ahmadinejad, who served as the President of Iran between 2005 and 2013. The U.S. Department of Treasury accused Hossein Zarrab of violating U.S. sanctions on Iran and slapped a $9.1 million fine against him. His fine was reduced to $2.3 million following his cooperation with the U.S. officials.
Zarrab was arrested by the FBI in Miami in the US on 19 March 2016 and was accused of bank fraud, money laundering and helping the Iranian government in evading the US economic sanctions on Iran to hinder its nuclear-weapons program. His charges; conspiracy to defraud, violating the International Emergency Economic Powers Act, money laundering, and bank fraud; could bring up to 70 years in prison if found guilty in the U.S. Federal Court.
Early life
Zarrab was born in Tabriz, Iran, to Iranian Azerbaijani parents, and grew up in Azerbaijan and Turkey. Reza Zarrab became a dual citizen of Turkey and the Republic of Azerbaijan after settling in Istanbul. Zarrab's parents remained in Baku through 2010–11; in 2013 they were granted Turkish citizenship reportedly through facilitation of then Interior Minister Muammer Güler.In 2008, Reza Zarrab married to a Turkish pop star, Ebru Gündeş and had a child in 2011. He started his business life in Turkey in 2008 with the company named Royal Maritime A.S. He founded Royal Holding with his brother Mohammed Zarrab in 2010.
Zarrab's chauffeur, Turgut Harpani, was arrested by the Turkish Customs Protection agency during his trip to Russia from Turkey in 2011 for carrying $150 million in cash and was accused of conducting illegal money couriering, but he was then released by Turkish authorities. Happani shared his own pictures on Facebook with suitcases full of money.
The Turkish National Intelligence Agency urged then Prime Minister Erdoğan in April 2013 about Zarrab's corrupted relations with the Turkish cabinet members. Zarrab received an "exceptional citizenship" and became a Turkish citizen with the decision given by the Turkish Council of Ministers on 1 June 2007. He was accused of bribing $1.5 million to receive Turkish Citizenship in the indictment.
2013 corruption scandal in Turkey
Zarrab, who has a business affiliation with the Iranian billionaire and business magnate Babak Zanjani, was detained in Istanbul on 17 December 2013 due to his involvement with the sons of three ministers in the Turkish government and Egemen Bağış, the former minister for EU Affairs and Turkey's chief negotiator in accession talks with the European Union, in an alleged bribery, corruption and smuggling racket. The court ordered his arrest on 21 December along with Barış Güler, son of Muammer Güler, and Kaan Çağlayan, son of Zafer Çağlayan. He was released on 28 February 2014.The investigation in Turkey revealed a system to help Iran bypass US sanctions against the country concerning the SWIFT payment system, in a scheme based on Turkish public bank Halkbank, whereby money was transferred to front companies in China and Turkey, and gold bought with that money transferred to Iran via Dubai.
Then Interior Minister Muammer Güler's son, Barış Güler, then Economy Minister Zafer Çaglayan's son, Kaan Çaglayan, and General Director of Halk Bank, Suleyman Arslan, were among the suspects including Reza Zarrab. They were arrested due to accusations of "bribery, professional misconduct, bid rigging, and smuggling".
Erdogan backlashed and announced the investigation as a "judicial coup" against his government, and dismissed the prosecutors and police officials investigating the corruption scheme. After a 70-day detainment, Zarrab and the sons of cabinet members were released from jail. Erdogan received harsh criticism for obstructing and undermining justice and putting the judiciary under his executive authority. However, Erdogan announced that "justice has been served".
Egemen Bağış, then Minister of European Union Affairs, was dismissed after the corruption investigation. The Ministers of Interior Affairs, Economic Relations, and Environment and Urbanization – Muammer Güler, Zafer Çaglayan, and Erdoğan Bayraktar, respectively – had to resign from their positions. The indictment charged high-ranked officials with significant accusations for receiving bribes: Zafer Caglayan received $52 million worth of bribes; Muammer Guler received $10 million worth of bribes; and Egemen Bağış received $1.5 million worth of bribes. The summary of proceedings were sent to the Turkish parliament for the vote on whether to lift ministers' immunity and send them to court. However, given the strong majority of Erdoğan's ruling party, in January 2015 the parliament did not lift their immunity and swept away the significant investigation.
In May 2014, Erdoğan announced that he initiated a "witch-hunt" against the Gulen movement for, as he alleged, being behind the corruption investigation. Two months after this announcement, the government arrested and detained police officials who conducted the corruption investigation. The prosecutors of the corruption investigation were also dismissed from their positions.
While Erdoğan has alleged that Zarrab conducted trade and business in aligned with Turkish interests, there have been several reports that suggest Zarrab's illegal activities extensively harmed the Turkish economy.
Arrest in the United States
On 19 March 2016, Zarrab was arrested in Miami, Florida, for conspiring to evade U.S. sanctions against Iran, money laundering and bank fraud. He was later indicted by a grand jury with charges that could bring up to 75 years in prison. The case is being prosecuted by the U.S. Attorney for the Southern District of New York, led by Preet Bharara, with assistance from a trial attorney of the National Security Division's Counterintelligence and Export Control Section.During the case, prosecutors have noted that Zarrab donated $4.5 million to a charity founded by Emine Erdoğan, the wife of former prime minister and now president of Turkey Recep Tayyip Erdoğan. Prosecutors stated that Zarrab has "close ties" to Erdoğan.
After Zarrab's arrest, shares in Halkbank, whose CEO was among those charged with taking bribes from Zarrab, had fallen by 20%. He has offered to pay $50 million to be granted a bail. Bail has been denied. In their brief against granting bail, prosecutors had argued that "if the defendant were able to reach Turkish soil, he could cause the highest levels of Turkish government to block his return to the United States."
In April 2017, media reported that negotiations involving the U.S. and Turkish governments were undergoing, to the effect that Zarrab would be extradited to Turkey while in return "Turkey would be much less resistant to the US’s missions in Syria, and primarily its support to the PYD."
One of the most striking arguments in the indictment about Zarrab was that the Zarrab family sent a letter addressed to the president of Iran's Central Bank and stated that he was ready for "Economic Jihad" against sanctions on Iran.
Erdoğan's first comment on Zarrab's arrest by the United States government was: "it was not a case that interests Turkey". However, it is claimed that Erdoğan, on 21 September 2016 during a special meeting with then Vice President Joe Biden, requested Zarrab's release from jail and prosecutor Bharara to be dismissed from his position. Also, it is claimed that Erdogan's wife, Emine Erdogan, did a similar request to Biden's wife, Jill Biden. Furthermore, Bekir Bozdag, the Turkish Minister of Justice, visited the United States Attorney General Loretta E. Lynch in October 2016 and stated how the Zarrab case was unfounded and that Zarrab should be released
In February 2017, Erdoğan agreed to a secret meeting with Zarrab's attorneys, Rudy Giuliani and former Attorney General Michael Mukasey.
Halkbank Deputy Chief Executive Mehmet Hakan Atilla, who was in connection with Zarrab, was arrested in the United States in March 2017 with the charges of "conspiring to evade US sanctions against Iran and other offenses". Afterwards, it was announced in September 2017 that the US charged then Turkish Minister of Economic Affairs Zafer Caglayan and former General Manager of Halk Bank Suleyman Aslan with offenses similar to Zarrab's.
Erdoğan appeared to be involved in the allegations about the US investigation. It was claimed that Erdogan's effort to save Zarrab was the fear that the inquiry had reached him. It is also alleged that Erdoğan wanted the US to release Zarrab in return for the detained US citizen pastor Andrew Brunson being held in a prison in Turkey.
Metin Topuz, a Turkish employee of the US Consulate General in Istanbul, was arrested on 4 October 2017 for espionage, being a member of crime network, and taking the evidences of the 2013 corruption investigation to the US. In the arrest warrant, it is emphasized that the main suspects of the 17 December corruption investigation were "foreign intelligence agencies and countries."
As a response to the arrest, the US Embassy in Turkey announced on 8 October 2017, that "visa applications from Turkey were suspended."
On 16 November 2017, NBC News, reported that Zarrab is now cooperating with federal prosecutors in a money-laundering case and that he was then out of jail, a move President Erdoğan had been desperately hoping to avoid. It is thought that Zarrab is Robert Mueller's key to taking down Michael T. Flynn in the 2017 Special Counsel investigation.
In response to Zarrab's release from detention to another facility inside the United States, the Turkish government expressed concern as to the status of Zarrab. Two weeks later, Zarrab reappeared in Manhattan court as a witness in the case against Atilla, having accepted a plea deal with federal prosecutors.
A day after Zarrab testified in US Federal District Court, the Turkish government seized the assets of his and his family, including his wife Ebru Gündeş.
In October 2019, Bloomberg News claimed that President Donald Trump had in 2017 urged his then-Secretary of State Rex Tillerson to persuade the Department of Justice to drop its case against Zarrab.