Gold trader Reza Zarrab testifies at Iran sanctions trial

Turkish gold trader Reza Zarrab testified at a co-defendant’s Iran sanctions-busting trial Wednesday that he decided to flip and become a cooperating government witness when efforts to win his freedom through a prisoner exchange for Americans held in Turkey fell through.

Zarrab, whose arrest last year triggered diplomatic tensions with Turkey and complaints from Turkish President Recep Erdogan, also described how he arranged to pay millions of dollars in bribes to Erdogan’s economy minister in 2012 to clear the road for the sanctions scheme.

The testimony in the Manhattan federal court trial of banker Mehmet Hakan Atilla came one day after prosecutors officially revealed the cooperation deal with Zarrab, who hired ex-mayor Rudy Giuliani and former attorney general Michael Mukasey earlier this year to try to work out a diplomatic solution.

Although he didn’t name them, Zarrab told jurors that he decided to inform on co-conspirators in the alleged billion-dollar scheme after he “hired lawyers” to try to work out a prisoner swap “within the legal limits” and the effort failed.

“Cooperation was the fastest way to accept respo and get out of jail at once,” he said.

Zarrab, 34, a wealthy Turkish celebrity married to Ebru Gündeş, a pop-music star, is accused of leading a complex scheme to launder Iranian oil money through purported transactions in gold and food that provided access to U.S. banks and helped Iran break the American economic stranglehold.

A dual Iranian-Turkish citizen, he said he was first turned down when he proposed the scam to a top manager at Turkey’s Hakbank, where Atilla works, because he was too much of a public figure.

“He said I am too popular to do the gold trade and I am a person who is very transparent,” Zarrab testified. “Because my wife was a famous artist in Turkey, I was a person who was within the public eye all the time.”

To get help, he said, he went to Turkey’s economy minister, who he knew socially, to get him to lean on the bank.

“He got some more information about the details of the trade,” Zarrab said. “He asked about the profit margins. And he said I can broker this providing there is a profit shared 50/50.”

Zarrab testified that he paid bribes in three currencies — 2.4 million Turkish liras, about 7 million in U.S. dollars, and euros. “I’m thinking that I paid bribes in amount of 45 to 50 million euros,” he said.

During his testimony, Zarrab spoke through a Turkish translator and wore a tan prisonlike smock, although he conceded he is no longer in a prison or jail, and is being held in an undisclosed location by the FBI.

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