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Turkey Seizes Assets of Reza Zarrab, Witness in Sanctions-Evasion Case


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Turkey Seizes Assets of Reza Zarrab, Witness in Sanctions-Evasion Case

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Turkish newspapers this week were filled with coverage of the Manhattan trial of a Turkish bank executive accused of violating United States sanctions on Iran.CreditBurhan Ozbilici/Associated Press

Turkish prosecutors on Friday ordered the seizure of assets belonging to an Iranian-Turk gold trader who has been a key witness in the Manhattan trial of a Turkish bank executive accused of violating United States sanctions on Iran, Turkish state media reported.

The order cited a part of the Turkish penal code that addresses the leaking of state secrets. It came a day after the witness, Reza Zarrab, testified in Federal District Court that he was told in 2012 by a Turkish official that Recep Tayyip Erdogan, then prime minister, ordered two Turkish banks to participate in a billion-dollar sanctions-busting scheme.

Mr. Zarrab, 34, entered a secret guilty plea in October to conspiring to evade the sanctions and other charges, and, in a bid to reduce his punishment, agreed to assist prosecutors. Mr. Zarrab, whose plea agreement was reported this week in court, testified on Wednesday that “cooperation was the fastest way to accept responsibility and to get out of jail at once.”

A newly unsealed transcript of Mr. Zarrab’s plea hearing shows that when he appeared before Judge Richard M. Berman on Oct. 26, he gave a detailed admission of his crimes, saying that from 2010 until his arrest in 2016, he conspired with others to obstruct the Treasury Department’s enforcement of the Iran sanctions.

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Reza Zarrab, a key witness in the sanctions-evasion case, in December 2013.CreditOzan Kose/Agence France-Presse — Getty Images

He also admitted that while being jailed in Manhattan, he bribed a correctional officer in return for alcohol and the use of a cellphone. He ultimately pleaded guilty to seven charges.

As part of Mr. Zarrab’s plea deal, the transcript shows, the government agreed to take steps to ensure his safety and that of “his family and loved ones,” including potential placement in the witness protection program.

The case involving Mr. Zarrab and the Turkish bank executive on trial, Mehmet Hakan Atilla, and seven other defendants who remain at large, has raised tensions between Turkey and the United States. Turkish officials have said the case is based on fabricated evidence and is a politically motivated plot to undermine the country’s economy and its leader, Mr. Erdogan, who is now president.

In a speech in Istanbul, Turkey’s prime minister, Binali Yildirim, on Friday called for Mr. Zarrab to reverse his decision to cooperate with the American authorities.

“God willing, he will turn back from this mistake,” Mr. Yildirim said.

Turkish state and pro-government media outlets have not reported on key developments in the trial, including Mr. Zarrab’s testimony this week implicating Mr. Erdogan and his account of paying tens of millions of dollars in bribes to Zafer Caglayan when he was the country’s economy minister, as part of the scheme. Mr. Caglayan has also been charged in the case and is one of the defendants not in custody.

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President Recep Tayyip Erdogan of Turkey has condemned the trial and has tried to persuade American officials to drop it the case.CreditUmit Bektas/Reuters

The Turkish state news agency, however, was the first to report on Friday’s court order to confiscate all of the assets of Mr. Zarrab and his family, including his wife, Ebru Gundes, a famous Turkish pop singer.

Asked about the Turkish order to seize Mr. Zarrab’s assets, his lawyer, Benjamin Brafman, said, “It would be inappropriate to comment until after the trial of Mr. Atilla is completed.” Prosecutors had no comment.

Mr. Zarrab testified in court for a third day on Friday, offering more details about the oil-for-gold scheme. He also described how the conspirators disguised some of their transfers of Iranian oil proceeds as food sales.

“Were you actively sending food?” a prosecutor, Sidhardha Kamaraju, asked Mr. Zarrab.

“You mean physically, food?

“Yes.”

“No, I never sent food, physically,” Mr. Zarrab said.

Follow Benjamin Weiser on Twitter: @BenWeiserNYT

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