Reza Zarrab case: Turkey seizes assets of trader in US trial

The case involving Mr Zarrab (centre) is being closely followed in Turkey

Turkish prosecutors have ordered the seizure of assets of a Turkish-Iranian gold trader who is testifying in a US trial of a banker accused of violating US sanctions against Iran.

Witness Reza Zarrab earlier told a New York court that Turkish President Recep Tayyip Erdogan had approved his and the defendant's sanctions-breaking deals.

Mr Erdogan has denied that Turkey breached US sanctions on Iran.

The case has strained relations between Ankara and Washington.

In a separate development on Friday, Turkey's chief prosecutor issued an arrest warrant for former CIA officer Graham Fuller.

The prosecutor accused Mr Fuller, former vice-chair of the US National Intelligence Council, of having links to Muslim cleric Fethullah Gulen.

Mr Gulen, who lives in the US, is blamed by Turkey for last year's failed coup attempt. He denies the claim.

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On Friday, the Istanbul prosecutor's office said the assets of Mr Zarrab and his family would be confiscated as part of an investigation against the trader, Turkey's state media reported.

They quoted Turkish Prime Minister Binali Yildirim as saying that he hoped Mr Zarrab would "turn back from his mistake" in co-operating with US prosecutors.

Reza Zarrab, 34, is a key witness in the criminal trial of Turkish banker Mehmet Hakan Atilla, whom he allegedly worked with to help Iran launder money.

In his testimony in New York, Mr Zarrab implicated Mr Erdogan in an international money laundering scheme that he and the banker ran between 2010 and 2015, which allegedly allowed Iran access to global markets despite US sanctions.

He said that he was told in 2012 by the then economy minister that Mr Erdogan, who was prime minister at the time, had instructed Turkish banks to participate in the multi-million dollar scheme.

President Erdogan is yet to publicly respond to the new allegations

Mr Erdogan said earlier on Thursday that Turkey did not breach US sanctions on Iran, Turkish media reported. His government has described the case as "a plot against Turkey".

The Turkish president is yet to respond to the new allegations about him made in court.

Mr Atilla has pleaded not guilty. Nine people have been charged in total.

Mr Zarrab was arrested by US officials in 2016 and accused of engaging in hundreds of millions of dollars' worth of transactions on behalf of the Iranian government, money laundering and bank fraud.

But he later decided to co-operate with the prosecutors.

On Wednesday, he told the court he paid Zafer Caglayan, then Turkey's economy minister, bribes amounting to more than 50m euros ($59m; £44m) to facilitate deals with Iran.

Turkey's Deputy Prime Minister, Bekir Bozdag, responded to the allegations, saying that Mr Zarrab had been "pressured into committing slander".

Speaking to state-run news agency Anadolu, Mr Bozdag called the trial a "theatre".

The Turkish government had previously said that Mr Caglayan acted within Turkish and international law.