Turkish gold trader testifies he was attacked in US prison

A Turkish-Iranian gold trader testified Thursday he fears for the safety of his family and himself after the government of Turkey launched an espionage investigation and after he was attacked in prison by a knife-wielding inmate who claimed he was told to kill him for cooperating with U.S. authorities.

The disclosures in Manhattan federal court by Reza Zarrab, the government's star witness, came as he finished seven days of testimony in the trial of a Turkish banker charged with violating U.S. economic sanctions against Iran. Zarrab said 18 or 19 individuals — some of whom he doesn't know — had their assets seized after he began testifying last week.

The banker, Mehmet Hakan Atilla, has pleaded not guilty and his lawyers say he accepted no bribes and did not break the law. Zarrab testified that Atilla, who worked at the state-run HalkBank, never asked Zarrab for kickbacks and Zarrab never paid him bribes.

The trial has drawn considerable interest in Turkey, where President Recep Tayyip Erdogan has called it a U.S. conspiracy to "blackmail" and "blemish" his country.

Zarrab, 34, pleaded guilty to the conspiracy in October and has cooperated, providing evidence to support charges against Atilla and other individuals.

He testified that he paid bribes to Turkish banking and government officials, including over $50 million in bribes to Turkey's former finance minister Zafer Caglayan in 2012 for his help in laundering a billion dollars in Iranian money.

He said he also bribed him with a watch and a piano.

His testimony turned dramatic Thursday as it neared its end as Assistant U.S. Attorney Sidhardha Kamaraju elicited a description of a jailhouse attack.

"I came face-to-face with an individual who tried to take my life," Zarrab said, speaking faster and louder than before.

Zarrab said the inmate pulled a knife out and said "he had received instructions to kill because I was cooperating."

Afterward, Zarrab was removed from prison and has remained since in the custody of FBI agents, though he has not said where. He has said he may have an opportunity to be released on bail once he finishes testifying.

The testimony came on the same day that a federal inmate sued Zarrab in state court in New York City for unspecified damages, saying his one-time cellmate raped him. According to a transcript of sidebar conversations between the judge and lawyers, Atilla's defense lawyers considered confronting Zarrab on the witness stand with the accusations but decided against it.

In the lawsuit, Faquzi Jaber claimed that he and Zarrab struck up a friendship at the Metropolitan Correctional Center in Manhattan. He said Zarrab bragged that he was rich and could hire a private lawyer for Jaber to help him win his criminal case.

In September 2016, Zarrab hired a lawyer for Jaber and arranged to have him moved into the same cell, the suit said. Zarrab also sent money to Jaber's family in Africa and put cash in his commissary account, it added.

After that, Zarrab "started telling plaintiff that he likes having sex with both men and women" and "started masturbating in front of plaintiff," the lawsuit claimed. In November, Zarrab raped Jaber, who "felt helpless to fight off the younger and stronger defendant," it said.

Ben Brafman, an attorney for Zarrab, said his client "categorically denies the allegation and intends to vigorously defend against the lawsuit."