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How to Launder $1 Billion of Iranian Oil Part 1

Over six days on the stand, a star witness for the FBI spun a stunning tale of corruption and double-dealing.

Looking nervous and somber, the FBI’s star witness entered from the lockup and shuffled across the New York federal courtroom in a beige prison smock. The Turkish-Iranian gold trader took a seat at the witness stand for the hearing on Nov. 29, the second day of testimony in a money laundering and sanctions-evasion case brought by the U.S. government. Asked to state his name, he said he was Reza Zarrab.

Not long ago, Zarrab’s life might have fit the description of a James Bond villain’s—he glided around Istanbul with his pop-star wife in Aston Martins and Range Rovers, flew on private planes, and sported around the Aegean with his own jetpack and submarine. He liked to carry a gold-plated pistol and kept an office at Trump Towers Istanbul. That all came to an end in March 2016, when Zarrab was arrested by FBI agents as he arrived in Miami for a vacation at Disney World. Over the next 18 months, Zarrab, 34, was the chief defendant in a prosecution accusing him and others of a conspiracy to launder almost $1 billion through banks in the U.S. to help Iran evade sanctions over its nuclear program.

Zarrab hired a team of 16 lawyers from some of the most elite U.S. law firms. After the 2016 presidential election, he enlisted two Donald Trump confidants, former New York Mayor Rudy Giuliani and ex-U.S. Attorney General Michael Mukasey, who tried to cut a deal for his release, including a prisoner swap. But those efforts failed. Then in September, Zarrab vanished.

How to Launder $1 Billion of Sanctioned Oil Money Out of Turkey… and Make Payments for Iran

In his testimony, Reza Zarrab gave prosecutors a step-by-step diagram of one of his schemes.

  1. Iran sells oil to Turkey. But Iran can’t take Turkey’s money because of international sanctions.
  2. Turkey deposits the money into an account owned by the National Iranian Oil Co. (NIOC) at the Turkish bank Halkbank.
  3. Zarrab’s role begins when the money is transferred from NIOC’S Halkbank account into another at Halkbank owned by the Iranian bank Sarmayeh.
  4. Halkbank transfers the money from Sarmayeh’s account into one owned by one of Zarrab’s companies.
  5. Zarrab uses the money to buy gold in Turkey. He loads a suitcase with it and gives it to a courier, who takes it onto a plane.
  6. On customs forms, the gold is marked as bound for Iran, but the courier gets off in Dubai.
  7. Zarrab takes custody of the gold through an office in Dubai.
  8. He sells it in Dubai for cash in the local currency, dirhams.
  9. Zarrab turns the funds over to a money-transfer company in Dubai, Rostamani Exchange, along with payment instructions designated by Iran.
  10. Rostamani uses the money to make payments on Iran’s behalf, running dollar-denominated transactions through accounts at banks in the U.S.

For weeks, his whereabouts were a mystery. The prison registry said he’d been released. Court papers indicated he was no longer participating in the defense of the case. It wasn’t until he appeared in court on Nov. 29 that the full story surfaced. The FBI had removed him from jail to protect him from threats, keeping him under guard at an undisclosed location. By then, Zarrab had secretly pleaded guilty to all the charges against him and agreed to help the U.S. government. As part of his deal, prosecutors offered him and his family witness protection.

Over more than a week on the witness stand, Zarrab spun a stunning tale of corruption and double-dealing that reached the highest levels of the Turkish government, all the way up to President Recep Tayyip Erdogan. The case has further soured Washington and Ankara’s already strained relationship, revealing how America’s longtime ally may have helped Iran undermine sanctions even as Turkey received millions of dollars in U.S. aid. Nine people have been charged, including Turkey’s former economy minister and past chief executive officer of Halkbank, a major Turkish bank owned by the government. Of them, only one—a senior Halkbank executive named Mehmet Hakan Atilla, Zarrab’s former co-defendant—is on trial. The others have all avoided U.S. arrest.

 

Click HERE to read the original article.


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