Facing 130 years in prison, the infamous Turkish-Iranian money launderer Reza Zarrab took a plea deal in 2017 agreeing to testify in U.S. courts. Federal officials have since kept him out of the spotlight while allowing him to live a government-sanctioned life of luxury under a false identity in Miami.
But the man who made his fortune cleaning profits from sanctions evasion and dealing with companies tied to slave labor and organized crime has been anything but idle.
An investigation by OCCRP, Law&Crime and the Miami Herald found that Zarrab remains connected to his former criminal network and has received multiple questionable wire transfers from Turkey. Using fake identities, he’s invested in thoroughbred horses and a palatial equestrian facility, entering an industry rife with fraud and money laundering.
U.S. officials declined to comment when asked if they have concerns about his activities or if he’s surrendered a dime of his fortune.
Dubbed the “The Turkish Gatsby” for his playboy lifestyle, Zarrab ran a vast money laundering operation that channeled funds to Iran, in violation of U.S. sanctions against the Persian Gulf country. U.S. prosecutors offered a conservative estimate that his network moved at least US$20 billion from 2010 to 2015 alone.
Reporters tracked Zarrab, 38, to Miami’s Coconut Grove, where he has been living in a $3.6 million condo in a luxury high-rise that affords panoramic views of yachts that crowd the shores of Biscayne Bay. Credit: OCCRP Convicted money launderer Reza Zarrab, now using false names while living in Miami, is seen walking and talking on his phone near the entrance to his high-rise condo building in July.
In July, OCCRP and Law&Crime reporters watched Zarrab as he paced the parking lot of the Park Grove condominiums, talking loudly on his cell phone in Turkish. After several circuits of the area — watched over by a trio of gold-colored statues of men in “See No Evil,” “Hear No Evil,” and “Speak No Evil” poses — he was whisked away in a chauffeur-driven Cadillac Escalade.
Turkey has already seized some of Zarrab’s assets, and he is expected to forfeit more to the U.S. when he is sentenced. That won’t happen until after the trial of Turkish state bank Halkbank, however, and it’s unclear when that will be. In the meantime, Zarrab can afford a lavish lifestyle — some of it funded by the wire transfers from Turkey.
“I’ve long been concerned with how the Justice Department handled this case, and the appearance of political interference on behalf of Turkey influencing the department’s decision-making,’’ said U.S. Senate Finance Committee Chairman Ron Wyden.
“This was the largest sanctions-evasion scheme in U.S. history, and the possibility that the U.S. financial system is being used to facilitate improper transactions for Reza Zarrab and other co-conspirators implicated in the scheme deserves the immediate attention of U.S. officials.”
Two Zarrab defense attorneys — one of whom has allowed Zarrab to use his car and credit card — said their client is living up to his plea deal and “all material aspects” of his activities are known to the government.
Zarrab did not respond to interview requests made through his legal team
Ties to His Old Life
Just over a week after Zarrab’s 2017 plea deal, corporate records show that a key member of his inner circle, Iranian businessman Amir Fathrazi, started a new Turkish company.
Its founding chairman was Sami Al-Bazz, the brother of a Turkish lawyer who relocated to New York to help with Zarrab’s defense in December 2017. People familiar with the money launderer’s affairs say that lawyer, Şems Al-Bazz, now works as Zarrab’s personal administrative assistant in Miami. She did not respond to requests for comment. Credit: Instagram Sami Al-Bazz (right) and his sister Şems Al-Bazz (left) in Florida in an Instagram post by Yasemin Daga (center) on July 22, 2019.
Fathrazi was a shareholder in Royal Holding A.S., which Zarrab used to launder billions of dollars for Iran, and his family is closely aligned with Zarrab’s.
OCCRP identified at least a dozen companies in Iran that involved Fathrazi, his father, or another relative as directors alongside members of Zarrab’s immediate family in Iranian corporate records. At least six are now active.
The new Turkish company, Amir Al Gayrimenkul Yatırımları Anonim şirketi, is on paper a real estate investment firm. But like dozens of shell firms Zarrab used to move illicit money, it shows no signs of real business activity. Only scant details of its business affairs appear in public records, and the company has no website or online presence.
Sami Al-Bazz told OCCRP that Zarrab has no connection to the business in Turkey.
“It’s just real estate, but I don’t want to comment about my business,” he said in a brief telephone conversation.
Multiple attempts to reach Fathrazi through his business and individually were unsuccessful.
Zarrab was still a teenager when he partnered with Fathrazi in 2003, according to records for their Turkish jewelry business, Zafer Kuyumculuk. Turkish law enforcement later identified one of its directors, Ertugrul Bozdoğan, as part of Zarrab’s criminal organization. He could not be reached for comment.
A decade later, in 2013, Fathrazi established a gold refining business in Iran with Zarrab’s father, Hossein. Three months earlier the elder Zarrab had been fined $9.1 million by the U.S. in relation to a money exchange in the UAE, which prosecutors later identified as integral to Reza Zarrab’s money laundering scheme. Fathrazi was not charged in the Zarrab prosecution.
Peter Sprung, a retired assistant U.S. Attorney who handled complex criminal cases in the Southern District of New York, said Zarrab’s financial arrangements and apparent continued contact with former money laundering colleagues could cause big problems for prosecutors who plan to use him as a witness against Halkbank.
“If it emerged that Zarrab had acted dishonestly or fraudulently, or associated with known criminals, or even worse, committed a crime, it would seriously undermine his usefulness as a cooperator. Depending on how important he is to the [Halkbank] case, it could grievously harm that case,’’ Sprung said.
Zarrab himself could also face his full 130-year prison term and entirely new charges if the Department of Justice determines he has breached the terms of the deal, Sprung added.
Zarrab’s New York-based criminal defense attorney, Robert Anello, would say little about his client beyond rejecting any suggestion that Zarrab has been involved in improper dealings since his plea deal.
“All material aspects of what Mr. Zarrab has been doing the past couple of years … have been known to the government,” Anello said.
“There have been some suggestions made of activity that you have characterized as money laundering or the like, and to the extent any such suggestion is made — it would be false, defamatory and obviously damaging to Mr. Zarrab.”
Follow the Money
Credit: OCCRP Reza Zarrab in his Istanbul office with stacks of money, shortly before his arrest in the United States for laundering money in violation of Iran economic sanctions.
Financial records obtained by OCCRP indicate that Zarrab’s Florida lifestyle and his horse business are being financed by international wire transfers from dubious companies and people in Turkey with no known connection to the money launderer.
In July 2020 a man in Turkey, Suat Aktas, wired $78,000 to the owner of Zarrab’s former rental home, who lives in Portugal. That wire passed through the Manhattan branch of Standard Chartered Bank, a British lender that processed more than $1.2 billion for 10 Zarrab-linked companies between 2007 and 2015.
Five days later, Aktas wired $10,000 on Zarrab’s behalf to a South Florida interior designer who decorated his condo and house in Davie, a town northwest of Miami. The interior designer said Zarrab identified himself by yet another name, John Kaplan, and said he was from Turkey. She said she dropped him as a client because he was slow to pay and “things just didn’t seem right.”
Aktas’ wires list two Istanbul addresses where he isn’t registered. He could not be further identified by OCCRP or located for comment.
Zarrab arranges even small payments directly from Turkey. In July 2020, for example, a Florida man Zarrab hired to transport horses received a $1,600 Western Union wire transfer initiated by Uğur Kolcu, an Istanbul-based accountant for an automotive company.
The following month, a man named Erhan Okcuoglu wired $3,350 from Turkey to Wellington, Florida horse trainer and riding coach Endel Ots, who confirmed that he had received the payment for riding lessons he provided to Zarrab’s former girlfriend.
Reached in Turkey, Okcuoglu said he doesn’t know Zarrab and never transferred him money. When pressed, he stopped replying to messages. OCCRP also contacted Kolcu through social media, but he immediately deleted his account.
When not paying with international wire transfers, Zarrab has used a high-limit platinum American Express card bearing the name Erich C. Ferrari, the attorney whose firm handles the sanctions violation portion of Zarrab’s defense. The Escalade Zarrab uses is also registered to Ferrari in Washington, DC.
“Mr. Zarrab is my client and my relationship with him is an attorney-client relationship, and not personal in nature,” the attorney said in a written statement. “Further, any financial arrangements between Mr. Zarrab and myself were proper and lawful, were in connection with my representation and/or to protect his safety, and the government is aware of them.”
Anello, Zarrab’s New York-based attorney, agreed with his colleague, saying: “There has been no financial impropriety and the government is aware of Mr. Ferrari’s representation of Mr. Zarrab and his assistance.”
The U.S. Attorney for the Southern District of New York, which oversees Zarrab and the Halkbank prosecution, declined to comment.
But attorneys who were briefed by reporters about what’s known of Zarrab’s financial entanglement with Ferrari questioned its propriety.
Jennifer Rodgers, a former prosecutor in the Southern District of New York, said there can be legitimate reasons for a defense attorney to help a client with expenses, often adding it to their bill later. But she said the financial dealings involving Zarrab’s lawyer appear to be “weird stuff” that suggests prosecutors were “not being as careful as they should be.”
“Maybe they were more lenient than they should have been in terms of letting him keep more than he should,’’ she said.
Sprung, who spent more than a decade in the Justice Department public integrity section, said the arrangement could come back to haunt Ferrari.
“When he [Ferrari] stands up and addresses the court, he’s got to speak with authority and impartiality,” Sprung said. “If [Ferrari’s] getting involved in seemingly sketchy financial transactions with his client, then he’s undermining his ability to do that.”
Read More: https://www.occrp.org/en/how-iran-used-an-international-playboy-to-launder-oil-money/notorious-money-launderer-reza-zarrabs-lavish-life-and-new-business-in-miami