Turkish Trader Stays in U.S. Custody as Judge Ponders Bail

Updated on
  • Reza Zarrab accused in U.S. of helping Iran launder money
  • Lawyer calls charges ‘radical extension of existing law’

A Turkish-Iranian gold trader accused of helping Iran launder hundreds of millions of dollars in violation of U.S. sanctions will remain in a New York jail while a judge considers his request for bail.

Reza Zarrab seeks to be released on a $50 million bond and allowed to live in a New York apartment while under a 24-hour watch by guards he agreed to hire. U.S. District Judge Richard Berman said he’ll probably rule on Zarrab’s request in about a week.

Zarrab, who was at the center of a bribery, forgery and gold-smuggling investigation by Turkish authorities, is accused of using a web of companies over five years to induce U.S. banks to unwittingly launder money in transactions that breached international sanctions against Iran.

The case isn’t the “slam dunk” conviction prosecutors say it is, Zarrab’s lawyer, Benjamin Brafman, told the judge at a hearing in Manhattan Thursday. It’s the first time U.S. prosecutors have ever charged a citizen of another country for conducting transactions that occurred outside the U.S. and involved foreign companies, Brafman said. He called the charges a “radical extension of existing law.”

Zarrab was arrested in Miami on March 19. He said he was on his way with his family to Disney World.

"It’s disingenuous to punish someone whose only crime was to go to Disneyland," Brafman said.

Brafman also rebuked prosecutors for raising allegations based on the corruption probe in Turkey to support their case. Prosecutors said Zarrab was a flight risk because he could use “corrupt political connections” at the highest levels of the Turkish government to block his return to the U.S.

Zarrab had denied any wrongdoing in Turkey, saying his business was legitimate. Government ministers also denied allegations they were bribed and President Recep Tayyip Erdogan repeatedly insisted the investigation was a coup attempt. All charges against Zarrab and members of Erdogan’s government were eventually dropped.

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