- Zarrab says he was questioned without being advised of rights
- He spoke to FBI after arriving for family Disney World trip
Turkish-Iranian gold trader Reza Zarrab arrived at Miami International Airport in March with his wife and five-year-old daughter for a family trip to Disney World. But he says a routine stop at "passport control" turned into an illegal search by American agents who gained access to his iPhone 6 and questioned him without advising him of his rights.
Zarrab, 33, owner and operator of Royal Holding A.S., is accused by federal prosecutors of using a web of companies over five years to induce U.S. banks to launder hundreds of millions of dollars in transactions that violated international sanctions against Iran. He’s been in U.S. custody since his arrest in March.
The trader is now asking a federal judge in New York to bar prosecutors from relying on statements he made to Federal Bureau of Investigations agents about his bank accounts and businesses as well as all the data that U.S. investigators got after they forced him to give them his pass code to his phone and iPad.
“I provided the pass code to my iPhone to the agent, feeling that I had no choice," Zarrab said in a statement filed in court. “The agent then left the room with my iPhone. I have not since seen my iPhone. I did not know that I had the right to not provide the agent with my pass code to my iPhone. I was not advised of my right to remain silent or my right to an attorney."
Jim Margolin, a spokesman for Manhattan U.S. Attorney Preet Bharara, who brought the case, declined to comment on Zarrab’s claims.
Zarrab says he asked for a lawyer after his arrest and that FBI agents, aided by a Turkish interpreter, stopped an interrogation that was being videotaped. He said that he also unwittingly answered an FBI agent’s questions about his assets and businesses, residences, bank accounts and family addresses before asking for a lawyer for a second time.
“This was done after I had already asked for an attorney," he said. “I was not provided a lawyer when I was questioned by the FBI this second time, nor did I waive my initial request."
Zarrab and two accomplices are charged with conspiring to thwart U.S. and international economic sanctions against Iran by concealing financial transactions that were on behalf of Iranian entities. Prosecutors say he used a network of companies in Turkey and the United Arab Emirates to transact business on Iran’s behalf and defraud the U.S. from about 2010 until 2015.
Companies benefiting from the scheme included Bank Mellat, an Iranian government-owned bank, the National Iranian Oil Company and the Naftiran Intertrade Company, according to the U.S.
Zarrab separately on Monday asked the Manhattan judge to dismiss the case, saying that American prosecutors have wrongfully charged him with violating sanctions that he says can’t be enforced against non-U.S. citizens. Zarrab argues that Bharara is engaging in “prosecutorial overreach” for attempting to extend American laws to a businessman who’s engaged in overseas transactions between foreign entities.
His lawyers, Viet Dinh and Christine Chung, said Zarrab’s transactions were "fundamentally foreign" and they are entirely legal under foreign laws that govern non-U.S. citizens.
"Zarrab is a Turkish businessman and citizen of Turkey and Iran," Dinh and Chung said in a filing Monday. "As such, he is free to engage in transactions with Iranian businesses without running afoul of U.S. laws that criminalize U.S. sanctions against Iran."
Prosecutors are trying to “assert global criminal jurisdiction” just because some of the transactions alleged to be part of the scheme were cleared through American banks, though the charges fail to allege how the banks were harmed, according to Dinh and Chung.
"None of these executed or contemplated transactions triggers criminal liability because Zarrab did not export or conspire to export anything," defense lawyers said. "All actions by Zarrab and the alleged co-conspirators took place abroad."
Last month a federal judge presiding over Zarrab’s case declined to free him on $50 million bail, saying he might flee the country if he were released.
The case is U.S. v. Zarrab, 15-cr-867, U.S. District Court, Southern District of New York (Manhattan).