Reza Zarrab, the Turkish-Iranian gold trader who became a key witness in a US investigation into Turkish state-owned lender Halkbank’s alleged role in helping Iran evade sanctions, was sentenced Tuesday to time served, avoiding additional prison time, Reuters reported on Tuesday.
US District Judge Richard Berman handed down the sentence at a hearing in Manhattan federal court. Prosecutors had urged the judge to take Zarrab’s extensive cooperation into account.
Zarrab, 42, pleaded guilty on October 26, 2017, to conspiracy, bank fraud and money laundering charges related to a scheme to evade US sanctions on Iran.
He subsequently testified for seven days against Mehmet Hakan Atilla, a former Halkbank deputy general manager, describing how Iranian oil revenue held in restricted accounts at the bank was transferred through gold trades and fictitious food transactions.
Atilla was convicted in January 2018 and sentenced to 32 months in prison. He returned to Turkey in 2019 after completing his sentence.
In a sentencing submission, Zarrab’s lawyers said he had spent 22 months in jail, followed by five months under strict home confinement and 95 months under restrictive bail conditions.
They asked Berman to impose no additional prison time, citing his cooperation and the threats and financial losses he had faced as a result.
In a sentencing memorandum, prosecutors described Zarrab’s cooperation as “truthful, complete and reliable” and said he provided substantial assistance, including key testimony at Atilla’s trial.
The sentencing came less than a month after Berman formally dismissed the criminal case against Halkbank under an agreement between the bank and the administration of President Donald Trump.
Halkbank was charged in 2019 with fraud, money laundering and sanctions offenses. US prosecutors accused the bank of secretly transferring approximately $20 billion in restricted Iranian funds, converting oil revenue into gold and cash and using fake food shipments to disguise the transfers. They alleged that at least $1 billion passed through the US financial system.
The bank pleaded not guilty and denied wrongdoing.
Under an agreement announced in March, Halkbank was not required to pay a fine or admit criminal liability. The bank agreed to refrain from transactions benefiting Iran and hired the Turkish affiliate of international accounting firm Ernst & Young to review its sanctions and anti-money laundering compliance.
Prosecutors said the review found no areas of noncompliance and asked Berman to dismiss the indictment. The judge approved the request on June 17, ending a case that had been a source of tension between Ankara and Washington for years.
The Justice Department said the agreement was linked to Turkey’s role in diplomatic efforts that produced a ceasefire between Israel and Hamas in 2025, including negotiations over the release of hostages and the return of victims’ remains.
The resolution also came as relations between Ankara and Washington improved following Trump’s return to the White House in 2025. Turkish President Recep Tayyip Erdoğan had repeatedly criticized the Halkbank prosecution, calling it unlawful and “ugly.”
Zarrab’s case had attracted widespread attention in Turkey because it overlapped with a major corruption investigation that became public in December 2013 and implicated cabinet ministers, senior bureaucrats and businesspeople close to Erdoğan’s government.
During Atilla’s trial, Zarrab testified that he paid tens of millions of dollars in bribes to then-economy minister Zafer Çağlayan to facilitate the sanctions-evasion scheme. Çağlayan denied the allegations.
Zarrab had been the prime suspect in the 2013 Turkish investigation but avoided prosecution after the case was quashed. Erdoğan’s government portrayed the investigation as a judicial coup orchestrated by members of the faith-based Gülen movement despite a strong denial from the group.
Turkish prosecutors reassigned or dismissed the police officers and prosecutors involved, while parliament rejected efforts to send four former ministers implicated in the allegations to the country’s top court for trial.
Zarrab was arrested in the United States in March 2016 and initially pleaded not guilty before changing his plea and becoming a cooperating witness shortly before Atilla’s trial.
His sentencing closes another chapter in one of the most politically sensitive US criminal cases involving Turkey.