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In the third hearing of trial of then Halkbank Deputy General Director Mehmet Hakan Atilla, Reza Zarrab has started his testimony in Federal District Court in Manhattan by explaining that he spoke about food trade with then largely state-owned Halkbank General Director Süleyman Arslan. Atilla is charged with evading US sanctions on Iran.
Photos of Muammer Güler and Zafer Çağlayan are in the file
Photos of then Minister of Interior Affairs Muammer Güler and then Minister of Economy Zafer Çağlayan were included in the file as evidence.
Zarrab said that Mehmet Hakan Atill was uninformed about some of the issues. In the previous hearings, Zarrab spoke on favor of Atilla and said that Atilla “never asked for bribery”.
“We turned onto food trade as the US started to impose sanctions on the gold trade. I didn’t do food business, I just ‘made it look like I did’. Atilla didn’t know whether these transactions were not actual food trade. On the other hand, Süleyman Aslan did”.
“Iran wasn’t interested in whether it was gold or food trade”
Concerning shifting from gold trade to food trade, Zarrab said that the Iranians didn’t stir any trouble:
“Iran wasn’t interested in what sort of trade it was as long as it received money”.
“We copied Çağlayan’s signature”
In his testimony, Zarrab said “Whenever I call Süleyman Arslan, I was being indebted to him. In order to not have to bribe Aslan, I gave the order to copy his signature”.
How did Zarrab's system work?
Zarrab said facilitating a payment for Iran requires a minimum of 10 transactions. He called Halkbank the heart.
Here are the 10 transactions:
1- The NIOC sells oil to TÜPRAŞ and natural gas to BOTAŞ.
2- The company called Sermaye Exchange (Capital Exchange), established in Iran, opens an account in Halkbank. The company isn’t actually involved in trade. It is used for money transfer.
3- NIOC transfers the payment it receives from the TÜPRAŞ and BOTAŞ to Zarrab's company.
4- Sermaye Exchange transfers the payment to Zarrab's company.
5- Zarrab's company's account is also in Halkbank. The transfer occurs between the two accounts in Halkbank.
6- Zarrab converts the money coming to his account in Halkbank to different currencies (euro, dollar, lira) and transfers it to his other account in Denizbank.
7- The account in Halkbank is cleansed that way.
8- Zarrab purchases gold with the money in Denizbank through Royal Group, which he established in Turkey and made gold trade.
9- Gold is moved to Dubai via couriers. Gold is converted to Dirham in Dubai.
10- Since money never enters Iran, it is used to pay for Iran's international debts.
Trial of Reza Zarrab
Reza Zarrab was arrested on December 21 as a part of the December 17-25 corruption and bribery investigation. He was released after 70 days of imprisonment.
Iranian businessperson Babek Zencani, who was indicated to be Zarrab's partner in Iran, was sentenced to capital punishment on the charge of corruption on March 6, 2016.
Zencani has companies in Turkey too. Kont Group Cosmetics in Beşiktaş district of İstanbul is one of them. Zencani is also allegedly linked to Onur Air. Zencani's attorneys in the past few days had stated in the lawsuit they brought in İstanbul that Onur Air belongs to them.
Zencani was frequently associated with Reza Zarrab in this period. In the report prepared by inspectors of the Ministry of Customs and Trade, a relation between the two was mentioned.
Zarrab had been taken into custody in the Miami city airport while trying to enter the United States and was arrested on March 22.
On his first hearing on April 27, Zarrab facing up to 95 years of imprisonment denied the accusations of conspiring to evade US sanctions against Iran, money laundering and bank fraud.
On October 26, Zarrab pleaded guilty and it was announced by the state attorney's office on November 28.
What did Zarrab explain in the hearings?
Reza Zarrab accepted to be a witness in the trial of then Halkbank Deputy General Director Mehmet Hakan Atilla charged with evading US sanctions on Iran. Zarrab appeared before jury for the first time on November 29, 2017.
Zarrab explained that Iran hid the source of the money it obtained through its oil and natural gas sales to Turkey by transferring it from account to account via Halkbank, and converted it to gold and transferred it to Dubai. On the first day of the hearing, Zarrab said that then Minister of the EU Egemen Bağış intermediated for him to work with Halkbank and then he bribed then Minister of Economy Zafer Çağlayan to be able to work with Halkbank.
On the second day, he explained that he bribed then Halkbank General Director Süleyman Arlsan, and Hakan Atill was the one who run the operation as the person who knew best about the methods of money laundering. Zarrab also said that then Prime Minister Recep Tayyip Erdoğan and then Vice Prime Minister in Charge of Economy Ali Babacan gave the order as he heard from Zafer Çağlayan.
On the third day, he explained why he gave up the gold trade and laundered money through food trade. The US court started to share some of the evidence Zarrab introduced as witness with the public. (HK/TK)
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