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A strange case of bribery and money laundering strengthens sketchy ties between Flynn and Erdogan

Investigators are looking into links between Flynn and the case of the Turkish-Iranian gold trader implicating Erdogan in violating U.S. sanctions against Iran.

D. Parvaz Twitter
Front pages of some of Turkish newspapers with headlines concerning a trial in New York against a Turkish banker charged with violating U.S. sanctions against Iran, in Ankara, Turkey, Thursday, Nov. 30, 2017. Turkish-Iranian gold trader Reza Zarrab has testified Wednesday during the trial that he bribed former economy minister Zafer Caglayan. The headlines read: "I gave 50 million Euros to Caglayan," "Zarrab speaks at trial," "Zarrab is used to bribing." CREDIT: Burhan Ozbilici/AP Photo.
Front pages of some of Turkish newspapers with headlines concerning a trial in New York against a Turkish banker charged with violating U.S. sanctions against Iran, in Ankara, Turkey, Thursday, Nov. 30, 2017. Turkish-Iranian gold trader Reza Zarrab has testified Wednesday during the trial that he bribed former economy minister Zafer Caglayan. The headlines read: "I gave 50 million Euros to Caglayan," "Zarrab speaks at trial," "Zarrab is used to bribing." CREDIT: Burhan Ozbilici/AP Photo.

As Michael Flynn, President Donald Trump’s former national security advisor, pleaded guilty on Friday to lying to FBI agents about conversations he had with Russian Ambassador Sergey Kislyak, another case playing out in a New York court room might make things even worse for Flynn and have serious repercussions for the Trump administration.

In a case that seems right out of a slick Hollywood movie, Reza Zarrab, a Turkish-Iranian gold trader, is cooperating with U.S. prosecutors in a criminal trial that involves truckloads of gold, a scheme to evade U.S. sanctions on Iran, and a money-laundering and bribery scheme that goes all the way up to Turkish President Recep Tayyip Erdogan, knocking down the country’s economy and treasury ministers along the way. If Erdogan had his way, this case would have never gone forward — and there’s a chance that Flynn had a role in trying to make that happen.

Investigators working for Special Council Robert Mueller are already looking into Flynn’s ties to the Turkish government, including a scheme that involved Flynn and his son, Michael Flynn Jr., somehow kidnapping Turkish opposition figure Fethullah Gulen from his home in the United States and deliver him to Turkey, where Erdogan accuses him of orchestrating the failed July 2016 coup against him. NBC reported that investigators are also looking into whether Flynn and others were involved in discussions on how to free Zarrab, allowing Erdogan to save face. 

Retired Gen. Michael Flynn, left, introduces Republican presidential candidate Donald Trump at a campaign rally, Thursday, Sept. 29, 2016, in Bedford, N.H. CREDIT: John Locher/AP Photo.

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Zarrab testified on Thursday that Erdogan, then the country’s prime minister, had authorized banks to move money for Iran. An executive for a Turkish state-owned Halkbank, Mehmet Hakan Atilla, has also been charged in the case and has pleaded not guilty in Manhattan federal court. Although nine people have been charged in the case, Zarrab and Atilla are the only ones who have been arrested in a case that, Reuters reports,  Erdogan’s spokesman is calling a “plot against Turkey.” Erdogan himself has denied violating U.S. sanctions on Iran over the country’s nuclear program.

So far, Zarrab has testified that using money deposited in Halkbank, he bought gold, smuggled it to Dubai, and sold it there for cash. When sanctions tightened in 2013, he started faking large food purchases to launder money, bribing high-level officials to facilitate the deals.

Bloomberg reported that Zarrab, who operated out of an office in Trump Tower in Istanbul, disappeared for a while after being apprehended by U.S. authorities in March 2016 before agreeing to cooperate with prosecutors.

Now, if U.S. prosecutors have this case right, it certainly follows a long-established script of money moving across the Iran-Turkey border — there have been bizarre stories in Turkish media for years on containers filled of U.S. dollars and Iranian gold being seized by authorities — as far back as 2009.

In 2009, a story broke about an Iranian businessman, Esmael Safarian-Nassab, shipping containers holding $18.5 billion in gold and cash to Turkey in 2008. According to PBS’s Tehran Bureau, that’s right about the time that Erdogan gave a speech about $18.5 billion in foreign investment in Turkey. He credited divine intervention for the cash infusion that saved Turkey from needing another loan from the International Monetary Fund at the time, saying, “Turkey’s God is great, he injected $18.5bn into the Turkish economy in these hard economic times,” the Guardian reported at the time.
Zarrab’s scheme, though, was initially uncovered by Turkish police undertaking a major corruption sting in 2013, but the evidence he could provide was never used as it would implicate Erdogan, who wields full control over all aspects of security, governance, and media in Turkey. Now, U.S. prosecutors managed to flip Zarrab as a witness, thereby getting him to testify against Atilla.