A Turkish-Iranian gold trader has testified in a U.S. court that Turkey’s President Recep Tayyip Erdogan personally authorized a transaction in a $1 billion money-laundering scheme to help Iran evade U.S. sanctions.
Reza Zarrab made the claims on November 30 as a U.S. government witness on the third day of the trial of Turkish Halkbank executive Mehmet Hakan Atilla in a New York.
Atilla has been charged with laundering Iranian oil and gas revenue through the U.S. banking system by way of gold transactions in violation of U.S. sanctions. He denies the accusation.
Zarrab on October 2 pleaded guilty to bank fraud, money laundering, and other charges and has been cooperating with authorities.
In the federal court, he has described giving bribes and kickbacks to high-level officials to cover up the moves that helped Iran secretly use its funds in the global market despite the sanctions.
Zarrab previously told the court that former Turkish Economy Minister Mehmet Zafer Caglayan in 2012 helped him secure a role working directly in the scheme with Turkish state-owned Halkbank in exchange for 50 percent of the profit.
Zarrab said he learned from Caglayan that Erdogan and then-Treasury Minister Ali Babacan had personally agreed to the transaction.
Erdogan has denied any wrongdoing and said: "We did the right thing no matter what comes out of the court case. We did not violate the embargo."
Zarrab said he paid more than $50 million in bribes to Caglayan to advance the scheme.
Caglayan, who is no longer in office, has denied the charges. He and six other high-ranking officials are being charged in absentia.
Zarrab, 34, and Atilla, 47, are the only two defendants currently in the United States.
Zarrab has told jurors he helped Iran use funds deposited at Halkbank to buy gold, which was smuggled to Dubai and sold for cash. He said Atilla helped set up the transactions.