If you needed another reminder of the dangers of exposing oneself on social media, you should probably take a look at the curious case of the disappearance (and re-appearance) of Reza Zarrab, the US government's star witness in a case alleging that he helped Turkish and Iranian traders abuse the financial system.
In late August, a photo appeared in PS Dressage magazine as part of an article about Sonata MF, a horse who had just become a national champion in the equestrian sport.
The since-removed picture showed “Aaron Goldsmith,” the smiling owner of the facility near Palm Beach, FL., where the horse trained.
However, it didn't take long for Turkish journalists to identify Goldsmith as Reza Zarrab.
While long forgotten for some, in the summer of 2014, we reported in detail on what appeared to be the biggest, most bizarre money-laundering scheme ever, involving Turkey trading "200 tons of secret gold" with Iran...
The topic of Turkey's Oil-for-Gold 'deals' has not been far from our thoughts over the last few years (here, here, and here) but as Bloomberg reports, after accessing a report leaked on March 14 of a network that spanned Turkey, China, Dubai and Iran, the plot reveals "one of the most complex illicit finance schemes [prosecutors] have seen."
It included the classic money-laundering techniques of over-invoicing and false invoicing (exactly as in the case of the Chinese commodity financing scandal underway) but the secret government plan to juice Turkey's exports goes much deeper; and if you think that the exposure of this scheme is slowing Turkey's manipulation, think again. Turkey’s trade balance continues to fluctuate unpredictably as gold stocks flow out of the country in bursts.
“Turkey’s going to continue it,” the Turkish economy minister said. “If those casting aspersions on the gold trade are searching for immorality, they should take a look in the mirror.”
We first started noticing major 'odd' exports of gold from Turkey to Iran in May 2012. But in 2013, with a plunging currency, surging inflation, slowing growth, and specter of rapid QE-driven hot money outflows leaving his nation desperate; Zafer Caglayan, the minister in charge of Turkey's $800 billion economy decided that the only way to ensure success in the looming election... was to cheat...
It highlighted a network including Turkey, China, Dubai, and Iran which dedicated itself to evading US sanctions. One observer called it, “one of the most complex illicit finance schemes [prosecutors] have seen.”
At the time, Zarrab pleaded guilty and cooperated against his Iranian co-defendant, who was eventually convicted.
Specifically, Zarrab testified in December 2017 that he had bribed Turkey’s former economy minister, Mehmet Zafer Çağlayan, in a scheme to smuggle gold for oil in violation of US sanctions on Iran and that then-Prime Minister and current President Erdoğan personally authorized the involvement of Turkish banks in the scheme although he was not charged in the case.
Zarrab's apparent reappearance has caused a media sensation in Turkey, with some outlets including including TR724 and TurkishMinute publishing the identifying details about his new life and his "current circumstances,"
A federal judge in New York on Monday unsealed previously-secret conditions of Zarrab’s release that showed that he was permitted to live in Florida under his newfound opulence.
As Bloomberg reports, Robert Anello, Zarrab’s lawyer, responding to questions about whether his client was violating terms of his bail, said: “Mr. Zarrab has abided by the court’s requirements and the terms of his release.” Anello said he would not confirm any details of his client’s current life and said “any attempt by media to disclose his whereabouts would be irresponsible.”