Southern District Assistant U.S. Attorney Michael Lockard said Reza Zarrab is charged with a “serious national security offense,” despite efforts by former New York City Mayor Rudolph Giuliani and former U.S. Attorney General Michael Mukasey to minimize his involvement in a multiyear conspiracy to allow the government of Iran and other entities to access U.S. financial institutions.
Zarrab has pleaded not guilty to conspiring to process hundreds of millions of dollars’ worth of financial transactions for Iranian businesses or Iran’s government. Authorities say those transactions are banned by U.S. and international sanctions.
Lockard criticized Giuliani and Mukasey—both members of Zarrab’s legal team—during a pretrial hearing before Southern District Judge Richard Berman. He said separate affidavits filed by Giuliani and Mukasey to explain their roles in the case mischaracterized the alleged crimes as not serious or harmful to the United States because no transactions involved weapons, nuclear technology or other contraband.
“The entities that benefited from this alleged scheme include the Islamic Revolutionary Guard Corps and agents or affiliates of that entity, Iranian banks that have been sanctioned for their role in providing financing for Iran’s nuclear programs, and Iranian commercial airlines,” he said.
He said prosecutors would prove Zarrab and coconspirators worked with high-level government and banking officials in Iran and Turkey after offering those services to Iran in a letter personally addressed to then-Iranian President Mahmoud Ahmadinejad.
“Zarrab funneled tens of millions of dollars to high-level government and bank officials to facilitate and protect this scheme,” Lockard said.
He also said Giuliani and Mukasey tried to “muddy the waters” by suggesting in their affidavits that the government had leaked through publicly filed court documents the fact that Giuliani and Mukasey had joined the case.
Lockard said it was not a confidential conversation when Zarrab’s lawyers notified prosecutors earlier this year that Giuliani and Mukasey planned to speak with Turkey’s president.
He said it was necessary for prosecutors to reveal the meeting as they asked the judge to conduct a hearing to ensure that Zarrab was aware that law firms employing Giuliani and Mukasey had represented banks in the case and that he understood there could be a conflict of interest. Giuliani’s firm also has represented the government of Turkey.
Zarrab’s criminal lawyer, Benjamin Brafman, declined to comment Monday after telling the judge he didn’t “want my silence to suggest that I agree with what Mr. Lockard just said.”
Last week, Berman said he will appoint independent counsel in the hearing to make sure the defendant understands the possible conflicts involved with his choice of counsel (NYLJ, April 24).
Previewing their evidence against a Turkish gold trader accused of laundering money for Iran, prosecutors told a federal judge Monday that Reza Zarrab spoke about the scheme directly with Iran’s former hardline president.
“We expect the evidence will show that Mr. Zarrab offered these services to Iran in a letter personally addressed to then-Iranian President Mahmoud Ahmadinejad, and that Mr. Zarrab funneled tens of millions of dollars to high-level government and bank officials to facilitate and protect this scheme,” Assistant U.S. Attorney Michael Lockard told the court.
Reports compiled by Courthouse News Service and New York Law Journal