Turkish-Iranian businessman pleads not guilty in US trial

Reza Zarrab pleads not guilty to charges of corruption and conspiracy to dodge US sanctions on Iran.

Photo by: AA
Photo by: AA

Reza Zarrab

Updated Aug 7, 2016

Turkish-Iranian businessman Reza Zarrab has pleaded not guilty on Wednesday to charges that he and others conspired to conduct hundreds of millions of dollars in financial transactions for the Iranian government or other entities to evade US sanctions.

Zarrab, a Turkish citizen who was born in Iran, entered the plea in a hearing at the US District Court in Manhattan.

He was arrested last month in Miami after being charged by the Manhattan office of US Attorney Preet Bharara.

Along with two other defendants, who remain at large, Zarrab is charged with engaging in conspiracies to defraud the United States, to violate the International Emergency Economic Powers Act, to commit bank fraud and to commit money laundering.

Prosecutors said that from 2010 to 2015, the trio helped Iranian individuals and entities, including Bank Mellat, one of the largest banks in Iran, evade US sanctions by conducting financial transactions through companies owned and operated by Zarrab in Turkey and in the United Arab Emirates.

People walk past a branch of Iran's Bank Mellat in Istanbul on August 18, 2010.

"We are pleased that Mr Zarrab has finally arrived in New York so we can begin the process of defending this case," Zarrab's attorney, Benjamin Brafman, told reporters outside the courtroom. "We believe the charges are very defensible."

Brafman said he expected to offer a "significant bail package" within 10 days.

Zarrab has been at the centre of a graft investigation in Turkey since December 2013 when a wave of arrests that particularly targeted businessmen, politicians and bureaucrats with ties to the Turkish government. However, he was released without charge two months after his arrest.

The arrests were blamed on individuals linked to US-based Turkish congregation leader Fethullah Gulen, who were in turned accused of running a "parallel" state by infiltrating the Turkish judiciary and security forces.

At the time the efforts of the Gulenists were deemed to be an attempt to overthrow Turkey’s Recep Tayyip Erdogan, who was then-prime minister.

Turkey responded by launching a mass investigation into the group, which was later labelled as a terrorist organisation known as FETO.

Turkish cleric Fethullah Gulen, who lives in the US and has been charged with running the FETO terrorist organisation in Turkey

Controversial attorney

Indian-born Preet Bharara has made a name for himself launching cases against a number of top figures including almost 100 Wall Street executives, security officials and international arms and drug dealers.

In 2011, Bharara’s case against Russian arms dealer Viktor Bout, who was arrested in Thailand before being transferred to the US, led to a diplomatic crisis between Washington and Moscow when he was sentenced to 25 years.

Last week, Bharara informed the International Consortium of Investigative Journalists (ICIJ) that he plans to open an investigation into some aspects of the Panama Papers leak, which exposed a global network of tax evaders including a number of world leaders.

US Attorney of the Southern District of New York Preet Bharara speaks during a press conference at the Department of Justice on March 24, 2016 in Washington, DC

Bharara was also responsible for the release of former Anonymous hacker-turned-FBI informant Hector Xavier Monsegur, better known as "Sabu," in 2014.

Monsegur, who was recruited into the FBI in 2011, helped the US prevent some 300 cyberattacks and was also responsible for the capture and imprisonment of a number of wanted hackers.

During his spell as an FBI informant, Monsegur led cyberattacks on a number of foreign government websites, including Syria, Iran, Nigeria, Pakistan, Brazil and Turkey.

Monsegur quickly recruited wanted US hacker Jeremy Hammond, who thanks to Monsegur was sentenced to 10 years in November 2013, to hack Turkish government websites and gain access to confidential emails with the help of the far-left Turkish hacker group RedHack.

Hector Xaviar Monsegur (C), the notorious hacker known as Sabu, arrives for sentencing at the Manhattan Federal Courthouse in New York on May 27, 2014.

Although the FBI refused to accept responsibility for Monsegur’s actions while he was on their payroll, the US government admitted to monitoring all of his online activity during that period.

Bharara's office, meanwhile, has denied claims that Monsegur was used by the FBI to hack Turkish government websites during mass anti-government protests in the summer of 2013.

Bharara has also dismissed any connection between the case against Zarrab in the US and his arrest in Turkey just over two years ago.

There has been concern in Turkey over Bharara’s history as a former counsel to New York Senator Chuck Schumer, who allegedly received thousands of dollars in donations from Gulenists based in the US.

TRTWorld, Reuters