Gold Trader Charged in U.S. With Violating Iran Sanctions (1)

A gold trader who’s already at the center of a bribery scandal in Turkey was charged by the U.S. in a scheme to help the Iranian government launder hundreds of millions of dollars and evade U.S. economic sanctions.

Reza Zarrab, 33, owner and operator of Royal Holding A.S., and two others are accused of using a web of companies over five years to induce U.S. banks to unwittingly process transactions that violated international sanctions against Iran, according to an indictment unsealed Monday.

Ayatollah Ali Khamenei, Iran’s supreme leader, was among the officials who wrote to Zarrab in December 2013 asking him to endorse and then pass on a letter to Markazi Bank employees urging them to take action which "neutralizes the sanctions,” according to the indictment.

Zarrab, who holds Turkish and Iranian citizenship, was previously charged in a graft probe in Turkey in 2013. In that case, he was accused of bribing ministers with millions of dollars in cash and gifts to help facilitate trade in gold with Iran, according to police and court documents in Turkey reviewed by Bloomberg News. He has denied the charges, saying the business was legitimate. The ministers also denied committing wrongdoing.

In January 2014, Zarrab and his accomplices began using a network of companies in Iran and Turkey to transact business on Iran’s behalf, prosecutors said. Companies benefiting from the scheme included Bank Mellat, an Iranian government-owned bank, the National Iranian Oil Company and the Naftiran Intertrade Company, they said.

Zarrab in 2014 owned a private jet and yacht and shared a $72 million villa on Istanbul’s waterfront with his pop-star wife, Ebru Gundes.

Zarrab, who’s also known as Riza Sarraf, is charged with conspiracy to commit bank fraud, which carries a maximum 30-year prison term, Money Laundering Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Read this Term and sanctions. He was arrested March 19 and ordered held without bail after appearing in court in Miami, according to a spokeswoman for U.S. Attorney Preet Bharara.

An e-mail sent to Royal Holding AS after regular business hours seeking comment on Zarrab’s arrest wasn’t immediately returned.

(Updates with details of case in third paragraph.)

--With assistance from Mehul Srivastava and Benjamin Harvey To contact the reporter on this story: Patricia Hurtado in Federal Court in Manhattan at pathurtado@bloomberg.net. To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Peter Blumberg

By: Patricia Hurtado

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