Gold Trader Zarrab Seeks Release in U.S. on $50 Million Bond

  • Turkish-Iranian man accused of helping Iran launder money
  • Zarrab was at the center of a bribery scandal in Turkey

A Turkish-Iranian gold trader, facing U.S. charges that he helped the Iranian government launder hundreds of millions of dollars and evade American sanctions, asked a federal judge to treat him like con man Bernie Madoff and allow him to be placed under house arrest.

Reza Zarrab, 33, who was at the center of a bribery scandal that engulfed Turkey’s leadership, asked to be released on $50 million bond, according to court documents filed Wednesday. He offered to pay for private security guards who could watch him round-the-clock and remain in New York with GPS monitoring. He’s been in U.S. custody since March 21 when FBI agents arrested him in Florida just as he arrived for a family trip to Disney World.

Zarrab’s lawyer Benjamin Brafman, who previously represented several high-profile defendants including Macau billionaire Ng Lap Seng, said in the filing that Manhattan U.S. Attorney Preet Bharara rejected the offer as "inadequate.” While the prosecutor may argue that it’s inappropriate to allow a wealthy defendant to “pay for a private jail,” Zarrab isn’t nearly as rich as Ng, who’s worth $1.8 billion, Brafman said.

‘At Odds’

“Unlike Mr. Zarrab, Mr. Ng owned or had access to several private planes in the U.S. and was intending to leave the U.S. when arrested,” Brafman said. “On the other hand, Mr. Zarrab was arrested entering the country on a commercial airline on what was to be a visit to Disney World with his family.”

Zarrab, who holds Turkish, Iranian and Macedonian citizenship, has already surrendered all of his passports, the lawyer said.

Bharara’s position is “inexplicably at odds” with other cases handled by his office including Madoff’s, Brafman said in court papers. The convicted con man was allowed out on bail with electronic monitoring and private security guards paid for by his wife at his $7 million Manhattan apartment, he said. Others like Jeffrey Webb, a FIFA vice president from the Cayman Islands, were freed on bail and placed under house arrest in the U.S. while facing federal charges, according to the lawyer.

Jim Margolin, a spokesman for Bharara, declined to comment on Zarrab’s request.

Turkish Scandal

Zarrab established a gold brokerage business with his family in 2002. He’s also the owner and operator of Royal Holding AS, a manufacturer of river-cruise ships, according to his lawyer.

He was a key figure in a 2013 scandal in which prosecutors accused him of bribing the country’s cabinet ministers in a gold-trading scheme worth at least $12 billion, a charge he denied. Turkey’s President Recep Tayyip Erdogan called the investigation a coup attempt and all charges against Zarrab and members of Erdogan’s administration were eventually dropped.

In the U.S., Zarrab is accused along with two others of using a web of companies to induce American banks to unwittingly launder transactions that violated international sanctions against Iran, according to an indictment unsealed in March by Bharara. The prosecutor became an overnight Twitter celebrity after announcing the charges, with followers of his account surging from about 12,000 to 50,000. He now has 300,000.

The case is U.S. v. Reza Zarrab, 15-cr-867, U.S. District Court, Southern District of New York (Manhattan).

Before it's here, it's on the Bloomberg Terminal.