Wealthy gold trader Reza Zarrab, nicknamed the “Turkish Gatsby”, admitted in court that he helped the Islamic Republic of Iran evade economic sanctions through a money-laundering scheme.
MANHATTAN (CN) – A New York federal judge on Tuesday handed down a time-based sentence to Reza Zarrab, a key cooperating witness in the US government’s dismissed criminal investigation into Turkish state lender Halkbank’s role in helping Iran launder billions of dollars to avoid international sanctions.
Zarrab, a Turkish-Iranian gold merchant, secretly pleaded guilty before trial in 2017 for various crimes related to fraud and money laundering and became a government witness in exchange for leniency. However, the sentencing outcome is not surprising given the decision by US federal prosecutors last month Falling the decade-long criminal investigation into money laundering and sanctions against Halkbank, largely due to Turkey’s help in brokering the Israel-Hamas ceasefire agreement.
Federal prosecutors had accused Halkbank in a criminal indictment of using illegal shipments of gold and fake food to send $20 billion to Iran, while lying to the Treasury Department to hide at least $1 billion in illicit payments that entered the U.S. financial system.
US prosecutors described Zarrabi as one of the “principal architects of a prolific Iranian sanctions evasion and money laundering machine that funneled billions of dollars of Iranian government oil money out of sanctions-restricted accounts held at Turkiye Halk Bankasi, AS”.
In his trial testimony, Zarrab implicated the most powerful politicians and financiers in Turkey in his financial crimes. He testified that Erdogan personally ran the illegal trade in 2014 while serving as the country’s prime minister.
Prosecutors with the U.S. Attorney’s Office for the Southern District of New York wrote in a sentencing memorandum that Zarrab provided significant assistance to the U.S. when he disclosed that he had paid millions of dollars in bribes to government and banking officials in Turkey and provided key testimony in the December 2017 trial of former Halkbank manager Mehmet Hakan Atilla.
Attila was convicted at trial and in the end served a sentence of over two years in prison. After the trial, Turkish President Recep Tayyip Erdogan called the verdict “scandalous.”
In one presentation memorandumprosecutors wrote that Zarrab’s October 2017 guilty plea to conspiracy, bank fraud and money laundering charges and his subsequent cooperation had been “true, complete and credible” and significant, helpful and timely. They also noted that he had suffered “danger or danger” as a result of his assistance.
Zarrab had led a quiet lifestyle in Turkey, even marrying one of the country’s women pop starsbut his testimony in the US trial about corruption at the highest levels of Turkey’s ruling AK Party led the Erdogan government to freeze his assets.
Zarrabi looking sentence served, noting in his sentencing submission that he had already been remanded in custody for 22 months in prison, in addition to five months in strict home confinement, followed by 95 months under restrictive parole conditions.
In July 2026, New York federal prosecutors announced a deferred prosecution agreement with the Turkish bank, which they acknowledged stemmed largely from “multilateral efforts in 2025” that included substantial diplomatic assistance from the Turkish government in brokering Israel-Hamas ceasefirenegotiating the release of hostages and the return of the remains of the victims following the October 7, 2023, attacks in Israel.
“In the State Department’s view, a commitment by the United States to resolve the Halkbank matter on mutually agreeable terms was an important component of those diplomatic discussions,” federal prosecutors wrote in one. STATEMENT signed by US Attorney Jay Clayton.
Signing the deferred prosecution agreement was one of Clayton’s final official acts in the Southern District of New York before he was tapped by President Donald Trump last month as director of national intelligence.
After Zarrab’s arrest in 2016, the Turkish government aggressively lobbied two successive US administrations, interfering with the Trump White House, to kill the prosecution.
Trump’s former personal attorney Rudy Juliani counted Zarrabi as a client in 2017, when the former New York City mayor shuttled between Turkey’s capital, Ankara, and the Oval Office to negotiate a prisoner swap that would derail the case.
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