Trump Ally Giuliani to Aid Turkish Dealer in Sanctions Case

(Bloomberg) -- An Iranian-Turkish gold dealer hired two confidants of President Donald Trump to help defend him against U.S. charges of using his network of companies to circumvent federal sanctions on Iran and possibly bring an end to the case.

Former New York City mayor Rudolph Giuliani and former U.S. Attorney General Michael Mukasey were retained by a team representing Reza Zarrab. The lawyers won't be taking part in the trial, Zarrab's attorney, Benjamin Brafman, said in a court filing. Zarrab had pleaded not guilty and is scheduled to go on trial in New York in October.

Giuliani was an outspoken Trump supporter during the election campaign, while Mukasey helped advise the president and was part of a team Giuliani said was drafted to legally implement a Muslim ban that Trump had promised. That led to an executive order restricting travel to the U.S. from seven mostly Muslim countries.

The hiring of Giuliani and Mukasey may present a conflict of interest because their firms, Greenberg Traurig LLP and Debevoise & Plimpton LLP, also represent some of the banks alleged to be victims in Zarrab's case, prosecutors said in court documents disclosing the lawyers' involvement. In a filing late Monday, the prosecutors said they were told Giuliani and Mukasey are being hired "to explore a potential disposition of the criminal charges in this matter."

The prosecutors earlier asked U.S. District Judge Richard M. Berman to hold a hearing to ensure that Zarrab is fully aware of the ramifications of such conflicts.

Brafman said a hearing isn't required because no lawyers from the two firms will have any involvement in trial preparations or the trial. Giuliani's and Mukasey's role won't require “any appearance” in court, he said.

Mukasey declined to comment on his role in the defense.

Mukasey's Son

Mukasey's son Marc has been rumored as a leading candidate to succeed former Manhattan U.S. Attorney Preet Bharara, who was fired earlier this month after refusing to step down. Bharara brought the charges last year against Zarrab, whose arrest roiled relations between Turkey and the U.S.

Trump's former national security adviser Michael Flynn was a paid representative of the Turkish government. Turkish President Recep Tayyip Erdogan had come out in support of Zarrab, saying be broached the subject of the gold-dealer's arrest with former Vice President Joe Biden in September.

Zarrab, owner and operator of Royal Holdings A.S., is accused of using his multibillion-dollar network of companies in Turkey and the United Arab Emirates to induce U.S. banks to launder hundreds of millions of dollars in transactions that violated international sanctions against Iran. He was arrested in Miami in March 2016 after arriving in the U.S. for a family trip to Disney World and remains in detention.

Bribery Scandal

Zarrab was a key figure in a 2013 scandal, in which Turkish prosecutors accused him of bribing the country's cabinet ministers in a gold-trading operation worth at least $12 billion, a charge he denied. Erdogan called the investigation a coup attempt, and all charges against Zarrab and members of his administration were eventually dropped.

Prosecutors raised a similar conflict for other members of Zarrab's defense team earlier this year, including former Assistant Attorney General Viet Dinh and former Solicitor General Paul Clement. Berman last month allowed their firm, Kirkland & Ellis LLP, to stay on the case.

The case is U.S. v. Zarrab, 15-cr-867, U.S. District Court, Southern District of New York (Manhattan).

--With assistance from Christian Berthelsen

To contact the reporter on this story: Chris Dolmetsch in New York State Supreme Court in Manhattan at cdolmetsch@bloomberg.net.

To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Joe Schneider, Sophia Pearson