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Reza Zarrab, who was arrested in March 2016 in the United States (US) and faced up to 95 years in prison, had accepted to cooperate with the prosecutors and testify as a witness in the trial.
In the fifth hearing, Zarrab testified under cross-examination and answered to the questions of Attilla's attorneys in Federal District Court in Manhattan. Some headlines from the hearing are as follows:
* Judge informed that some parties tried to take some evidence out of the file
Before Zarrab's testimony, judge of the trial, Richard Berman referred to some documents that were submitted to court as evidence, being shared by the court with public and noted that some parties tried to take certain evidence out of the case file. Berman said that he demanded that the documents be put back to the files afterwards.
* Atilla not demanding any bribe
Cross examined by the attorneys of Atilla, Zarrab was asked whether Atilla asked for any bribe from him.
Zarrab stated that Atilla never asked for any bribe and that he had to complain to then Halkbank General Director Süleyman Aslan about Atilla from time to time.
* Cooperation with the FBI
Hakan Atilla's attorney Cathy Fleming asked Zarrab about his cooperation with the Federal Bureau of Investigation (FBI).
Zarrab confirmed that before the cooperation agreement with the FBI, he had contacted authorities from the Prosecutor's office 12 times (first time in 2016) and after the agreement almost everyday. Zarrab stated that he made a deal with the prosecutor's office for "indulgence in his punishment" in return.
* Bribing prison guard
Zarrab admitted that he had bribed a prison guardian in New York prison.
He added that the bribe in amount of 45 thousand Dollars was paid to the guardian by his "Turkish attorney" and that he used the bribe to "buy alcohol, cell phone and common cold medications".
He stated that he used the cell phone to talk to his daughter and contact his attorneys.
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.
He accepted to cooperate with the prosecutors and testify as a witness in the trial.
What did Zarrab explain in the hearings?
Rıza Zarrab accepted to testify as a witness in the trial of former Halkbank Deputy General Director Mehmet Hakan Atilla who is standing trial for evading embargo against Iran. In the hearing on November 29, 2017, he testified before the jury for the first time.
In the first hearing, Zarrab explained the money laundering system for Iran, that could not carry out any international business due to the embargo by the United States (US). Sarraf told that he hid the resource of the money that Iran had earned by oil and natural gas by transferring the money between various different accounts with the held of Halkbank.
He stated that former Minister of the European Union (EU) Egemen Bağış helped him open an account at Aktif Bank and later bribed the then Minister of Economy Zafer Çağlayan to work with Halkbank.
On the second day of the trial on November 30, Zarrab explained that he bribed then-Halkbank General Director Süleyman Aslan. He added that former Halkbank Deputy General Director Mehmet Hakan Atilla who is the suspect of the trial, was carrying out the operation as the person who had the best knowledge of money laundering within the embargo but that he did not ask for bribe.
Sarraf also noted that Çağlayan informed him that then-Prime Minister Tayyip Erdoğan and then-Vice Minister of Economy Ali Babacan "gave approval an order to start doing that trade".
Sarraf said that Mehmet Hakan Atilla was uninformed about some of the issues and that they copied former Halkbank General Director Arslan's signature to bypass him since they were tired of Arslan asking for bribe everytime they called him for business.
On the third day of the trial on December 1, Zarrab explained why they gave up on gold trade and chose to launder money through food trade instead. Following the third hearing, US courts have begun to share some evidence with the public.
On the fourth hearing of the trial on December 4, Zarrab confirmed that he bribed his way out of prison after getting arrested in the December 17-25 corruption and bribery investigations in 2013 in Turkey. He also explained the details of the fictitious trade with the state-owned Halkbank.
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