A Turkish-Iranian gold trader whose prosecution in Manhattan drew sharp criticism from Turkey’s president has pleaded guilty and is cooperating with the American authorities, a federal prosecutor disclosed in court on Tuesday.

The trader, Reza Zarrab, who is being held by the authorities at an undisclosed location, pleaded guilty on Oct. 26 to all seven counts against him, including conspiracy to violate the United States sanctions against Iran, newly unsealed court records show.

Mr. Zarrab is expected to testify on Wednesday as a government witness in the trial of a Turkish banker, Mehmet Hakan Atilla, that began this week in Federal District Court. Mr. Zarrab, Mr. Atilla, and seven other defendants were charged with participating in a billion-dollar scheme to smuggle gold for oil in violation of the Iran sanctions.

On Tuesday, in his opening statement to the jury, the prosecutor said the men had used front companies and false documentation, told lies to American officials and paid bribes at the highest levels of the Turkish government.

“These are serious federal crimes that compromise our national security,” the prosecutor, David W. Denton Jr., said. He indicated that Mr. Zarrab would testify against Mr. Atilla and “tell you the story firsthand, as he lived it.”

“The evidence is going to pull back the curtain on a fraud of truly global proportions,” Mr. Denton said, “billions of Iranian dollars moving in a scheme so large that it affected the economies of countries in the Middle East, and so large that it was protected by government ministers in Turkey and Iran.”

Mr. Zarrab’s decision to cooperate could further strain relations between the United States and Turkey, especially if Mr. Zarrab reveals evidence of corruption in Turkish government and banking circles.

The Turkish president, Recep Tayyip Erdogan, has already raised the case with American officials, including in a telephone call with President Trump in September. He has depicted the prosecution as a continuation of a 2016 coup attempt against him, which he has laid to followers of the Islamic cleric Fethullah Gulen, who is living in self-imposed exile in Pennsylvania.

“When that plot failed, they set up the same plot in the U.S.,” Mr. Erdogan told Parliament this month.

The seven other defendants charged by the United States, who all remain at large, prosecutors have said, include a former Turkish economy minister, Zafer Caglayan, and Suleyman Aslan, a former general manager of Halkbank, a state-owned bank that prosecutors have depicted as playing a major role in the scheme.

Mr. Zarrab, 34, had “a direct line” to both men, Mr. Denton said.

Halkbank, in a statement in Turkey, dismissed news media speculation that it might be subject to prosecution in the case and said all its business had been conducted in accordance with national and international regulations.

In 2013, the Turkish police said they had uncovered the bribery scheme and arrested Mr. Zarrab, Mr. Aslan and others. But, Mr. Denton told the jury, bribes “bought a cover-up.”

Turkish officials, he said, organized a purge of the police and prosecutors who had run the case, sent many of them to jail and shut down the investigation. Mr. Zarrab and others were released.

Mr. Denton said that “the same corrupt high-ranking Turkish officials instructed Zarrab to put up even more bribe money for the judges, millions and millions in bribes, so that everything could be made to go away.”

“Zarrab paid the money,” Mr. Denton said, “co-conspirators got out of jail, and the case the Turkish police had developed was dismissed.”

But it turned out that the Turkish police were not the only ones watching, Mr. Denton said. Since 2013, he said, the F.B.I.’s counterintelligence division had been running its own investigation.

“The F.B.I. pieced together what was going on,” Mr. Denton said, “and the evidence they found tells the same story that the evidence collected by the Turkish police did.”

On Tuesday, the Turkish authorities were again taking measures, this time in response to the case in New York.

The chief prosecutor in Istanbul issued an arrest warrant for a former opposition legislator, Aykan Erdemir. He was accused of supplying fake evidence to United States authorities in connection with the Zarrab case.

Mr. Erdemir is a Turkey expert at the Foundation for Defense of Democracies, a Washington-based group that has strongly criticized Iran. The group’s chief executive, Mark Dubowitz, testified for the prosecution in the Zarrab case on Tuesday about the history of the Iran sanctions.

Mr. Erdemir, in a statement, called the Turkish charges against him false, defamatory and “entirely political in nature” and said, “The Turkish government has a regrettable history of harassing and intimidating critics and experts.”

In court on Tuesday, the government asked the judge, Richard M. Berman, to unseal court papers related to Mr. Zarrab’s guilty plea. They show that he also pleaded guilty to money laundering, bank fraud and a bribery conspiracy charge.

The bribery charge, which prosecutors had not previously made public, relates to payments Mr. Zarrab made to a corrections officer at the federal jail in New York where he was being held to induce officers to smuggle contraband in for him, including cellphones and alcohol.

Mr. Atilla’s lawyer, Victor J. Rocco, told the jury that Mr. Zarrab had also paid bribes in the jail to gain access to women.

A spokesman for the jail declined to comment on the specifics of the incidents but said, “All cases of inmate misconduct are investigated accordingly and appropriate action is taken.”

Mr. Rocco, in the defense’s opening statement, said his client was not corrupt, had taken no bribes and was a “hard-working person,” like the jurors themselves. Mr. Atilla, 47, was the bank’s deputy general manager for international banking.

Mr. Rocco signaled that the defense’s strategy would be to attack the credibility of Mr. Zarrab’s testimony. Mr. Rocco said Mr. Zarrab had paid “fortunes in bribes” to businessmen and government leaders in Russia, China, Iran and Turkey “to get what he wanted.”

“To Zarrab, bribery was a way of life,” Mr. Rocco said. “To Zarrab, everyone has a price.”

Source: nytimes.com