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Fraud, Corruption and U.S. Justice: The Rise and Fall of Reza
Zarrab
By Ilgin Yorulmaz
At 8:41 on a warm evening on March 19th
, Turkish Airlines flight TK
77 from Istanbul landed at Miami International Airport. On board was
Reza Zarrab, an Iranian-Turkish businessman of Azerbaijani origin; his
pop star wife, Ebru Gündeş; and their 5-year-old daughter. The
family was on vacation, heading to Disney World.
The FBI had been tipped about Zarrab as soon as he boarded the
Boeing 777 in Istanbul Atatürk Airport some 12 hours earlier. Zarrab
was arrested as he stepped off the plane and charged with money
laundering, bank fraud and conspiring to evade the U.S. embargo
against Iran.
The day after Zarrab’s arrest, Preet Bharara, U.S. Attorney for the
Southern District of New York, tweeted:
After that tweet, Bharara’s Twitter followers increased from a mere
1,000 to a whopping 300,000 as of now, the majority of them Turkish

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citizens, who dubbed Bharara “the Sheriff,” because they believe he is
finally pursuing justice in a case where it has long been elusive.
Dubbed the “Great Turkish Gatsby” for leading a life that is the envy
of film stars, Zarrab is the object of both fascination and scorn in
Turkey.
He was born the youngest son of a wealthy Azerbaijani family in
1983 in Baku. His Iranian-Azeri family comes from the city of Kerec
near. When Zarrab was one year old, the family left Iran and moved
to Turkey. The family then moved to Dubai in 1999. Zarrab, who
holds Iranian, Turkish and Macedonian passports, didn’t study
beyond high school, but has business acumen, starting to work in
the family’s trade business at 14.
Zarrab’s meteoric rise started with his decision to move to Istanbul
from Dubai in 2002 at the age of 19. Dealing with shipping, gold,
finance and money markets, he quickly set up six companies under
Royal Holding, at least one of which is mentioned in the U.S.
indictment as a source of illegal money transfers to Iran. He identifies
himself as Turkish and speaks Turkish fluently – a skill that opened
many doors for him.
Fame and fortune never abandoned Zarrab.
He once tried his hand at writing songs for his Azeri singer girlfriend
of eight years, Günel Zenelova, with whom he parted ways rather
inamicably. She was accused of threatening to kill him if he left her
for the woman of his dreams: Ebru Gündeş, a diva of Turkish pop
music, who has a huge following in Turkey and is on the jury of the
Turkish version of “The Voice.”

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Zarrab bought Gündeş a $10 million waterfront mansion on the
Bosphorus and sprinkled a truckload of rose petals on her path on
the day she moved there. He also bought a racehorse for her
birthday and named it, appropriately, Duty Free. He proposed to her
by writing on all the walls in their house “I love you. Will you marry
me?” They got married in 2010.
How did this foreign affair become an American legal case? And
where does it go from here?

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Tracking gold trail and the only honest customs officer in Turkey
On New Year’s Eve in 2012, Master Sara Turizm company of Dubai
made a deal to buy 1.5 tons of gold from Omanye Gold Mining Ltd.
of Ghana.
The gold was packed in 30 packages worth $65 million, labeled
“mineral samples,” and shipped to United Arab Emirates.
The customs declaration paper and the invoice shows that one ton
of the gold was destined for an Iranian named Babek Zanjani, owner
of a company called Sorinet and director of the First Islamic Bank in
Malaysia. The remaining half-ton belonged to Duru Döviz, a money
exchange company owned by Reza Zarrab, who was 32 at the time.
A sanctions regime put in action in the ‘80s in response to national
security threats from Iran prohibited anyone from “engaging in
unlicensed transactions or dealings with Specially Designated
Nationals (SDN),” according to the U.S. Department of Justice.
Zanjani, First Islamic and a Sorinet unit had been blacklisted by the
European Union previous month for evading sanctions. Four months
later, the U.S. Department of Treasury put all of them on the Special
Designated National list for laundering money for Iran, according to
Bloomberg News.
The gold was loaded onto a ULS Airlines cargo flight from Accra. The
initial plan was for the plane to make a fuel stop in Istanbul’s less
busy Sabiha Gökçen Airport. But when an early morning fog
prevented landing there, the plane was rerouted to Atatürk Airport,
where it landed at 7 a.m. on January 1, 2013.

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Turkish customs officials became suspicious of the cargo and its bill
of lading, and decided to inspect the plane. Soon, they found the
gold and established that the shipment papers were fraudulent. The
customs chief, a man named Teoman Dudak, who would be known
forever as “Officer Teoman” in social media, sealed the plane.
Zarrab’s plans were suddenly upended and thus began frantic calls
among Zarrab, his associates and Turkish authorities. According to
Bloomberg News, wiretapped conversations in Turkish indictment
papers revealed that Zarrab discussed various options, including
using his private jet to get the gold out of country.
He also called a trusted friend for help: Turkish Minister of Economy
Zafer Çağ layan, who had close ties to (then Prime Minister, now
President) Recep Tayyip Erdoğ an.
A couple of months before the gold incident, Zarrab had
accompanied his wife, Ebru Gündeş, to Çağ layan’s son Kaan’s lavish
wedding where Gündeş had performed.
It was also alleged in Turkish indictment that Çağ layan had received
a Patek Philippe watch from Zarrab, costing between $350,000 and
$400,000 and a $37,000 piano. Newspapers in Turkey released
excerpts of video and text messages with Çağ layan wearing the
watch in press conferences.
One person would resist Zarrab’s bribes: Officer Teoman, the customs
official at Atatürk Airport who had sealed the plane carrying gold.

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Court documents reveal Zarrab’s wiretapped complaint to one of his
associates: “I promised everything to Teoman. Everything. He’s not
taking it. He says ‘I can’t destroy my career.’”
The plane stayed on the tarmac for a total of 18 days, but was finally
released thanks to the intervention of ministry officials, who let it
continue its journey to Dubai.
A few years later, Turkish people would hear about Officer Teoman’s
honesty, and like, Preet Bharara, he would become an internet
sensation overnight.
Despite overwhelming evidence, the corruption case against Zarrab
was eventually dropped. Prosecutors and investigating police officers
were reassigned or removed from the case. Erdoğ an labeled the case
as a coup attempt against the government and tied it to an Islamic
movement led by an elusive imam currently residing in Pennsylvania,
Fethullah Gülen. Officer Teoman was rotated to an office far away
from Istanbul.
After serving a short sentence, Zarrab was let go.
Iranian connection
The U.S. had issued and was enforcing sanctions, prohibiting the
exportation, re-exportation, sale or supply, directly or indirectly, to
Iran of any goods, technology or services from the United States or
by a United States citizen.
Before the lifting of sanctions last year, those who traded oil or
natural gas with Iran, but didn’t want to be burdened by the

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embargo would deposit payments in Turkish Lira in accounts of Bank
Mellat, an Iranian state-owned bank. Hossein Najafzadeh, one of the
co-conspirators indicted with Zarrab in U.S. courts, worked as a
supervisor there. The Iranian government would use these funds to
buy gold in Turkey through multiple companies like Zarrab’s. At the
beginning, the Iranian government would have the gold exported to
Iran directly. Gradually, this transfer started taking place via Dubai.
According to the Organized Crime and Corruption Reporting project,
Zarrab became a symbol of a worldwide scheme that allegedly saw
nearly $12 billion in gold transferred to Iran. It is alleged that Iran
was using this money to run an illegal nuclear program and other
operations posing a threat to U.S. national security.
During interrogations after his earlier arrest on corruption and
bribery charges in 2013 in Turkey, Zarrab said that his associates
would carry gold, purchased overseas, into Iran in handbags on daily
flights between Istanbul and Dubai.
The Financial Times reported that the gold was apparently intended
as payment for natural gas Iran was selling to Turkey, at a time when
sanctions blocked Iran from using SWIFT, the international banking
system.
UAE was long known as a gold silo for Iran. The gold would then be
transferred from Dubai to Iran on ships. As Zarrab strengthened his
political ties with the Turkish government, he allegedly continued
gold transfers to Iran in return for large sums of money with
untraceable sources.
Through his Turkish lawyer, Ş eyda Yıldırım, Zarrab denied vehemently
that he was a partner with Babak Zanjani in evading sanctions on

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Iran. However, the gold that was transported from Istanbul to Dubai
had traveled on a fraudulent bill of lading registered under one of
Zanjani’s companies in Dubai.
American holiday
Although he freely traveled to the U.S. in March, Zarrab had been on
the FBI’s radar long before he boarded that fateful flight and landed
in Miami. Three months before that, and two days before the third
anniversary of Turkish corruption investigations, Preet Bharara had
prepared the indictment for his arrest and had presented it to Judge
Richard Berman in Southern District of New York. It is not clear if
Zarrab was aware of this, or why the U.S. Treasury didn’t blacklist him
despite the charges against him for evading the Iranian embargo.
Berman, who is best known for having ruled in favor of Tom Brady in
the “inflategate” case brought by NFL, accepted the indictment. The
fact that the FBI was waiting for Zarrab in Miami Airport with a
sealed indictment at hand was interpreted as an indication that
Zarrab was actually willing to cooperate with the FBI.
When the U.S. lifted its embargo on Iran recently, Zarrab and his
business partner in Iran, Babak Zanjani, suddenly became disposable,
even dangerous, for corrupt politicians in both Iran and Turkey.
Zanjani was swiftly arrested in Iran, tried and sentenced to death on
corruption charges this month.
It is thought that Zarrab, fearing for the same fate, decided to
cooperate, knowingly traveled to the U.S. and orchestrated his own
arrest by the FBI.

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Sheriff in town
Bharara’s subsequent tweets on other cases -- such as protection of
vulnerable children, corrupt politicians and press freedom, all
unrelated to the Zarrab case but familiar to daily life in Turkey --
resonated with his new Turkish followers, most of whom don’t speak
English, yet are thirsty for justice, even if it is distributed by a U.S.
prosecutor.
The demand for justice voiced by the hundreds of thousands of
Turkish people who want to see Zarrab face trial for his actions
surprised even the seasoned attorney.
Speaking at the New York Press Association last month, Bharara
mentioned the corruption case and the importance of prosecutors
like him for people in far-flung corners of the world thirsty for
justice. “We believe that no one’s above the law. We don’t care how
much money you have, we don’t care how powerful you are. We
don’t care how strong you are, we don’t care what your connections
are. Nobody is above the law,” he said.

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Recently, Zarrab declined to seek bail in a Florida court and
requested his case to be heard in Manhattan. He was transported by
bus from city to city, sleeping in four different jails along the way in
Miami, Atlanta and Oklahoma City, before finally arriving at
Manhattan Correction Center. It’s a long way from jewelry, yachts,
mansions by the Bosphorus and racehorses.
On April 26, Zarrab appeared in the Manhattan federal court for the
first time since his arrest in March. Wearing a blue jumpsuit, he was
in ankle chains and seemed to have lost weight, according to Voice
of America. He pleaded “not guilty” in the hearing.
It is no surprise that a man of means chooses an equally high-profile
man to defend him. Zarrab’s choice, Benjamin Brafman, has in the
past defended controversial figures like Dominic Strauss-Kahn, former
head of International Monetary Fund accused of sexual assault
(charges were later dropped and he chose to settle for an
undisclosed amount); musician Sean Combs (a.k.a. Jay-Z); and most

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recently, disgraced drug company owner Martin Shkreli. Before
Zarrab’s appearance in court, Brafman declined to comment to this
reporter, saying only that “it is truly unfortunate that it is taking this
long to have him brought to New York City.” Since the hearing, he
has told reporters that the case against Zarrab is “very defensible.”
Questions remain as this complicated case moves forward.
After all, Zarrab’s alleged partner in crime, Babak Zanjani, had been
declared a Specially Designated National by the U.S. back on April 11,
2013. Why wasn’t Zarrab? Is it true that Zarrab tried bribing his way
into the U.S.? If U.S. wants to keep Zarrab as a trump card for a
prisoner swap (like the case of Jason Rezanian, the American-Iranian
journalist held captive for many years in Iran and only released
recently), how will that affect the relationship between the U.S.,
Turkey and Iran? Last year, defendants pleaded guilty in 97.6 percent
of federal criminal cases, according to the New Yorker magazine,
which profiled Preet Bharara recently. If Zarrab enters a plea bargain
with Bharara’s office for a reduced sentence, will the expectant
Turkish audience feel betrayed by their “Sheriff”?
And the burning question of all: Will Zarrab talk about his co-
conspirators in the Turkish corruption case from three years ago and
implicate Erdoğ an and his then government?
J. Cahit Akbulut, a Turkish lawyer registered with the New York bar who
has been following Zarrab’s case, thinks a deal had been made
between Zarrab and U.S. prosecutors. “He must be stupid to have
traveled to U.S., otherwise,” he says. According to Akbulut, the trial in
Iran for Zanjani has ended, Iran sanctions were lifted, and then this
case happened. “It became clear that Turkey did not need this man
anymore.”
It’s interesting to see how Zarrab, a man who seems to have fallen
out of favor in Turkey and Iran after the lifting of sanctions, is treated

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now. 14 months ago, Istanbul Municipality ordered the demolition of
an illegally built section in one of Zarrab’s mansion, but the order
was not carried out.
Until now.
The day after Zarrab’s court appearance in Manhattan on April 26,
Municipality forces 5,000 miles away moved in to demolish the
three-story building in the mansion garden. It seems like something
kicked off the notoriously slow Turkish justice system to finally
function.
Never a man of modest means, Zarrab has recently offered a record
$50 million bail for his release. To convince the judge, his lawyers
have indicated that Zarrab would not risk escape so as not to tarnish
his singer wife Gündeş’s fame. During Turkish corruption hearings in
2013, Gündeş had protested media coverage of her husband, and
had appealed to the public to not victimize her and her young
daughter. Her wish was granted and this episode even increased her
following among her fans.
A few months later, when Zarrab was eventually arrested for
corruption charges as part of December 17-23 investigation in 2013,
Ebru Gündeş was criticized for having personally secured with the
prosecutor to visit Zarrab three times in his very first week in Silivri
Prison in Istanbul despite clear guidelines limiting visits by friends
and family. Zarrab and his family’s proximity to Turkish government
was seen as favoring “friends of the government” like Zarrab when
other friends and family of other inmates were strictly prohibited
from visiting them more than the designated number of times a

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month even in life and death circumstances, as was the case of at
least one inmate.
Favorable treatment in prison isn’t the only trouble spot in Zarrab’s
case.
His philanthropic activities, which are well documented by his
defense team in his appeal for bail, point to a Turkish non-profit
organization named Togem-Der. The organization works under the
patronage of Emine Erdoğ an, the wife of Turkish president whose
then government three years ago was at the center of the corruption
investigation that Zarrab was prosecuted for and found guilty of.
Beyhan Bağ ış -- the wife of Egemen Bağ ış, Turkey’s former minister
for EU Affairs, who is one of the four former ministers investigated in
the same corruption scandal -- was also involved in the said
nonprofit. So was Bağ ış himself.
Zarrab is next scheduled to appear in court in June.
Although not a talented songwriter, it’s ironic that Zarrab once wrote this
ominous song for another Turkish pop singer, as if he knew what was in
store for his future self:
Well, that’s the end of the movie/We didn’t understand what the matter
was/Never mind this and that/Another star has faded.