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Former Trump Aide Seeks to End Case Against Turkish Gold Trader


A former surrogate for President Donald J. Trump tried to cut a deal between the Turkish and U.S. governments, seeking an end to the prosecution against a Turkish gold trader accused of evading U.S. sanctions against Iran.

Former New York City Mayor Rudy Giuliani and former U.S. Attorney General Mike Mukasey grabbed media attention for their role in a case that sent waves of ripples in Ankara. A federal prosecutor alleged on Friday that both Mr. Giuliani and Mr. Mukasey, who joined the defense team of Turkish-Iranian businessman Reza Zarrab, met with Turkish President Recep Tayyip Erdogan in Turkey and sought meetings with officials in the U.S. administration to reach a disposition in the case.

The two lawyers notified the office of U.S. Attorney General Jeff Sessions of their plans beforehand, Bloomberg cited the letter sent by the prosecutors to the judge overseeing the case. The lawyers worked to cut a deal between Turkey and the U.S. governments by sidestepping prosecutors of the case.

U.S. authorities accuse Mr. Zarrab of helping Iranian government to evade sanctions and launder hundreds of millions. The case appeared to take a new dimension after Mr. Zarrab hired former New York City mayor and Mr. Mukasey to bolster his defense team.

U.S. District Judge Richard M. Berman in Manhattan sought to learn the nature of roles of Mr. Giuliani and the former attorney general, asking lawyers to explain how their involvement might differ from other members of the defense team. Their involvement in the case raised the issue of conflict of interest as both Mr. Giuliani and Mr. Mukasey also represent banks which are victims of Mr. Zarrab’s money-laundering efforts.

Also their presence in the defense team led to concerns whether their involvement is particularly sought to use their connections and influence with the Trump administration to resolve the case in a way that was favorable to Mr. Zarrab and the Turkish government, Bloomberg noted.

Their hiring raised concerns whether they were retained to use their connections and influence with the Trump administration to resolve the case in a way that was favorable to Zarrab and the Turkish government

Joon Kim, acting U.S. attorney for the Southern District of New York, sent a letter Judge Berman on Friday. He says both Mr. Giulani and Mr. Mukasey told the prosecution’s office, “without protection of attorney-client and work-product privilege,” that they went to Turkey in late February to meet with President Erdogan to “discuss potential ways to facilitate a resolution of the charges against the defendant in the case.”

They also “informed this Office that Mr. Giulani and Mr. Mukasey had sought to meet other officials in the U.S. government outside of this Office to discuss a potential disposition of the case,” NBC News reported on Friday.

Prosecutors accuse Mr. Zarab and two others of using a network of companies in Iran, Turkey and elsewhere to launder the proceeds and defraud several financial institutions, including U.S. banks, by concealing the true nature of the financial moves.

The issue had diplomatic repercussions as Mr. Erdogan unloaded a torrent of critical remarks against the arrest of Mr. Zarrab last year. He portrayed it as a coup attempt. The Turkish president sees the legal process as a launching pad to get to him by citing Mr. Zarrab’s connection to his family.

He described the Turkish-Iranian businessman as a philanthropist who donated $ 4.5 million to his wife’s charity foundation. Earlier this week, the U.S. authorities arrested a deputy executive director of HalkBank, one of the largest state-owned banks in Turkey, which the U.S. officials believe played a critical role for Mr. Zarrab’s financial transactions to Iran in his money laundering efforts.

Mr. Zarrab propelled to the national spotlight in late 2013 when the Turkish prosecutors shattered the political world by opening a sweeping graft investigation that also implicated Mr. Erdogan’s family members, government ministers, and close associates. At the center of the corruption buzz, a young Turkish-Iranian businessman who was married to TV celebrity Ebru Gundes and who was accused of bribing cabinet ministers and money laundering, appeared as the key figure.

Given the gravity of the accusations and political ramifications of the probe, the politically explosive legal drama would bring down a government anywhere in the world. But in Turkey, Mr. Erdogan saw it as a coup attempt against himself and waged a political war to push back the investigation.

His government purged the prosecutors and police chiefs who launched the graft investigation. After months of tremendous efforts, Mr. Erdogan finally reversed the tide and managed to hold on to power. He held perceived sympathizers of U.S.-based Fethullah Gulen within bureaucracy responsible for the investigation as an effort to stymie his political power.

The Zarrab case in the U.S. also commanded close attention from Turkish policy makers, including President Erdogan. His government accused former U.S. Attorney of Southern District of New York Preet Bharara who initiated the sanctions evasion case against Mr. Zarrab and arrested him, of having ties to Gulen movement. The prosecutor has repeatedly refuted such allegations and deemed as ridiculous.

Turkish Foreign Minister Mevlut Cavusoglu still clung to that conviction and this week again accused Mr. Bharara. The U.S. former prosecutor declined to respond to the Turkish foreign minister. Turkey’s Justice Minister Bekir Bozdag said Gulen movement was behind the arrest of Halkbank senior executive Mehmet Hakan Atilla, and even called on FBI to unearth the link between Gulenists and Mr. Bharara.

But former New York City mayor’s thrust to the case raised concerns over conflict of interest and also rekindled questions over Mr. Erdogan’s renewed interest in the case.

Prosecutors underlined that Mr. Giuliani’s law firm, Greenberg Traurig LLP, is a registered agent of Turkey. “Putting aside for the moment, the curious claim that the defense hopes … to negotiate a disposition of the criminal charges in this case without directly engaging the Office prosecuting the case, their contention that a [conflict of interest] hearing is unnecessary is both factually and legally wrong,” NBC News quoted acting Attorney Kim.

Lead Attorney Ben Brafman came up with a different argument and rejected any wrongdoing or inappropriate conduct. He said Mr. Giuliani and Mr. Mukasey would not be appearing in the court on behalf of Mr. Zarrab. They did not inform the court formally that they represent the client. The court judge asked the defense team to disclose the role of Mr. Giuliani and Mr. Mukasey and explain why it had not been disclosed previously.

Mr. Brafman insisted that the government is not entitled to learn what two men are trying to do to assist Mr. Zarrab.

“That information quite frankly is none of the government’s business,” ABC News quoted Mr. Brafman as he wrote to the judge, explaining the role of Mr. Giuliani and Mr. Mukasey.

He accused the government of attracting “media attention in the hope of undermining efforts of counsel to structure a resolution to this case without the direct involvement” of prosecutors.


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