Asked why he decided to flip against his alleged co-conspirator, Mehmet Hakan Atilla, a Turkish bank official, Zarrab answered, "Cooperation was the fastest way to accept responsibility and get out of jail."
Zarrab said the agreement with prosecutors came after a failed attempt by his American attorneys to arrange a "prisoner swap" between the United States and Turkey.
Wearing brown jail scrubs, Zarrab said he pleaded guilty to seven charges, including money laundering, evading sanctions, fraud and bribing a U.S. prison guard to smuggle him alcohol and let him use the guard's cellphone.
Zarrab said he and Atilla were key players in an international financial scheme to get Iranian oil-sale profits back to that country despite U.S. sanctions against such transactions.
In the early days of the scheme, Zarrab said, he moved 5 million to 10 million euros a day for Iranian clients, but he wanted to do more. In early 2012, he approached executives at Halkbank, where Atilla was a senior official, suggesting that they deal with him directly and use gold purchases to disguise money transfers, he said.
At first, a senior executive at the bank rejected the offer because Zarrab was too well known as the husband of a Turkish pop singer, he said. Zarrab said he then appealed to Turkey's economy minister at the time, Mehmet Zafer Caglayan, to intercede on his behalf. Caglayan "asked about the profit margins, and he said, 'I can broker this, providing there's a profit share, 50-50,' " Zarrab testified.
Zarrab said he agreed to split his profits with the minister, and prosecutors showed a spreadsheet detailing more than 30 million euros' worth of payments in about a year.
All told, Zarrab said, he believed he paid bribes to the minister of about 45 million to 50 million euros as well as about 2 million Turkish lira and about $7 million.
The Turkish government has said that Caglayan acted within the law.
Zarrab said that he helped move "a few billion euros'' from Halbank accounts for the Iranians, under the disguise of gold transactions.
Asked by prosecutors to walk the jury through his scheme, Zarrab became animated, standing in front of an easel and drawing an increasingly complex diagram charting the flow of funds designed to conceal the movement of Iran's profits from oil and gas sales to Turkey.
Prosecutors also introduced transcripts of wiretapped phone calls in which Zarrab spoke with others about complications and missteps in the scheme. At one point, according to the transcripts, an Iranian oil company mistakenly sent a transfer of 70 million euros directly to Zarrab — which would have been an obvious violation of the sanctions. In the calls, Zarrab persuaded a bank official to void the transaction and make it appear as if it never happened, according to the transcript.
As his hand-drawn chart grew crowded with boxes indicating the entities involved, Zarrab showed how it took 10 transactions to properly launder the funds.
Since Zarrab's arrest in March 2016, the case has roiled U.S.-Turkey relations. Zarrab is described by U.S. authorities as connected to senior members of the Turkish government, which, in turn, has called his prosecution an attack on its country.
Turkish prosecutors announced Nov. 18 that they had launched an investigation into two of the U.S. prosecutors who have overseen the Zarrab case, to determine whether evidence was illegally obtained. U.S. Attorney Joon H. Kim, one of the officials Turkey claims it is investigating, called the accusations "ridiculous on their face."
Turkish President Recep Tayyip Erdogan has personally lobbied the U.S. government to release Zarrab and has linked the case to a failed 2016 coup attempt against him, claiming that the same forces behind the putsch — which he blames on a cleric named Fethullah Gulen who lives in Pennsylvania — are behind the sanctions case against Zarrab.
This month, after it became clear that Zarrab might be cooperating with U.S. investigators, Turkey's foreign minister called him a "hostage'' who was being forced to testify against the Turkish government.