Business & Practice

Reza Zarrab Lawyers Ordered to Disclose Source of Legal Fees

April 5, 2017, 4:02 PM

By Chris Dolmetsch and Bob Van Voris, Bloomberg News

A federal judge wants to know who’s paying the bills for Rudy Giuliani and other lawyers to represent a Turkish businessman accused of violating sanctions against Iran.

Giuliani and former U.S. Attorney General Michael Mukasey were hired by Reza Zarrab, who has been charged with using his network of businesses to process hundreds of millions of dollars in payments through U.S. banks on behalf of Iran and related companies.

U.S. District Judge Richard Berman on Wednesday scheduled a hearing for April 24. The judge wants Zarrab’s attorney, Benjamin Brafman, to submit documents describing Giuliani and Mukasey’s roles by April 14, and also detailing whether their law firms have represented any of the alleged bank victims in the case.

Brafman was ordered to describe the relationship between Giuliani’s firm, Greenberg Traurig, and Turkey, and the former New York mayor’s involvement in that work. He must also identify who is paying legal fees if it isn’t Zarrab. Berman said the information could be submitted under seal.

The decision by the judge to hold a conflict hearing is “a bit of an extreme step,” said Anthony Sabino, who teaches law at St. John’s University in New York and isn’t involved in the case. While the complex case may involve various conflicts of interests, Zarrab is a “sophisticated businessman” who should be able weigh these issues, he said.

“Zarrab has a right to counsel of his choosing, and his decision should not be lightly upset,” Sabino said.

The hiring of Giuliani and Mukasey, who have both served as advisers for President Donald Trump, raised concerns that they were retained to use their connections and influence with the new administration to resolve the case favorably for Zarrab and the Turkish government.

In a letter to Berman last week, prosecutors said Giuliani and Mukasey met with Turkey’s President Recep Tayyip Erdogan sometime after Feb. 24 to discuss ways to resolve the case. The two lawyers notified the office of U.S. Attorney General Jeff Sessions of their plans beforehand, according to the letter.

Brafman declined to comment via email. Mukasey didn’t immediately return a phone message and email seeking comment on the judge’s ruling. Guiliani didn’t immediately return a phone message left with his assistant.

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

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