Bloomberg | Christian Berthelsen: Over six days on the stand, a star witness for the FBI spun a stunning tale of corruption and double-dealing.

Looking nervous and somber, the FBI’s star witness entered from the lockup and shuffled across the New York federal courtroom in a beige prison smock. The Turkish-Iranian gold trader took a seat at the witness stand for the hearing on Nov. 29, the second day of testimony in a money laundering and sanctions-evasion case brought by the U.S. government. Asked to state his name, he said he was Reza Zarrab.

Not long ago, Zarrab’s life might have fit the description of a James Bond villain’s—he glided around Istanbul with his pop-star wife in Aston Martins and Range Rovers, flew on private planes, and sported around the Aegean with his own jetpack and submarine. He liked to carry a gold-plated pistol and kept an office at Trump Towers Istanbul. That all came to an end in March 2016, when Zarrab was arrested by FBI agents as he arrived in Miami for a vacation at Disney World. Over the next 18 months, Zarrab, 34, was the chief defendant in a prosecution accusing him and others of a conspiracy to launder almost $1 billion through banks in the U.S. to help Iran evade sanctions over its nuclear program.

Zarrab hired a team of 16 lawyers from some of the most elite U.S. law firms. After the 2016 presidential election, he enlisted two Donald Trump confidants, former New York Mayor Rudy Giuliani and ex-U.S. Attorney General Michael Mukasey, who tried to cut a deal for his release, including a prisoner swap. But those efforts failed. Then in September, Zarrab vanished.

For weeks, his whereabouts were a mystery. The prison registry said he’d been released. Court papers indicated he was no longer participating in the defense of the case. It wasn’t until he appeared in court on Nov. 29 that the full story surfaced. The FBI had removed him from jail to protect him from threats, keeping him under guard at an undisclosed location. By then, Zarrab had secretly pleaded guilty to all the charges against him and agreed to help the U.S. government. As part of his deal, prosecutors offered him and his family witness protection.

Over more than a week on the witness stand, Zarrab spun a stunning tale of corruption and double-dealing that reached the highest levels of the Turkish government, all the way up to President Recep Tayyip Erdogan. The case has further soured Washington and Ankara’s already strained relationship, revealing how America’s longtime ally may have helped Iran undermine sanctions even as Turkey received millions of dollars in U.S. aid. Nine people have been charged, including Turkey’s former economy minister and past chief executive officer of Halkbank, a major Turkish bank owned by the government. Of them, only one—a senior Halkbank executive named Mehmet Hakan Atilla, Zarrab’s former co-defendant—is on trial. The others have all avoided U.S. arrest.

In court, Zarrab laid out how he paid tens of millions of dollars in bribes to Turkish government officials and banking executives to win their assistance—and cover—for the money laundering operation. He dropped a bombshell on his second day of testimony, when he implicated Erdogan as part of the scheme, saying he was told Turkey’s president gave orders that two Turkish banks be included in the plot.

The son of a wealthy Iranian steel magnate, Zarrab moved to Turkey as a toddler and started various enterprises in his teens. His main business became money transfers, currency exchange, and gold trading. In 2005, Zarrab became a Turkish citizen. Meanwhile, his father was part of a team assembled by Iran’s newly elected president, Mahmoud Ahmadinejad, to help work around U.S. sanctions, which had ratcheted up in response to Ahmadinejad’s aggressive pursuit of a nuclear program. Iran claimed the program was for peaceful purposes, but in 2011, the International Atomic Energy Agency said it could not rule out a military intent.

That led the U.S., along with the United Nations, to impose even tougher sanctions in 2012 to cut off Iran’s banks from the global financial system and block its access to revenue from oil and gas sales. Iran’s economy fell into recession; inflation spiked into the double digits. Although Iran continued to sell oil, the proceeds began piling up in banks beyond its reach. By 2012, Iran had billions of dollars and euros sitting in banks in Turkey, China, India, Italy, and Japan. As sanctions tightened, Zarrab testified that he’d learned that Iran’s central bank and national oil company were looking for ways to get at their money.

According to prosecutors, beginning in 2012, Zarrab devised an intricate scheme to move Iran’s money in Turkey to his own company accounts there and then export it in the form of physical gold to Dubai. From there, it was diverted into the international financial system and used to make payments to entities designated by Iran, sometimes through accounts at banks in New York. He then developed similar schemes to gain access to Iran’s money in other countries, with varying degrees of success. At the peak of his operation, Zarrab claims he was using as many as 15 couriers a day to move more than 1,000 pounds of gold at a time. Later, when a new round of sanctions cut off gold as an option, Zarrab developed a system portraying the flows as humanitarian food shipments—though no food was sent.

Zarrab said that over four years, he was able to get almost all of Iran’s billions out of Turkey and more out of India, China, and Italy. He testified that he charged $4 to $5 per $1,000 he moved, generating what he claimed was up to $150 million for himself, some of which, he said, went to bribes and bank fees. Officials at the U.S. Department of the Treasury grew suspicious of some of Zarrab’s transactions and in 2012 and 2014 went to Halkbank in Turkey to warn it against doing Iran’s business.

While the scheme worked for the most part, it already had begun to unravel. On a foggy New Year’s Eve in 2012, a plane carrying a Zarrab shipment was unexpectedly forced to land in Istanbul for refueling. Customs officers found more than a ton of undeclared gold in the cargo hold. The subsequent probe produced reams of wiretapped audio recordings, records of text messages, and other materials. Authorities raided the home of Halkbank’s CEO, Suleyman Aslan, and found $4.5 million in cash stuffed into shoe boxes. Turkish police arrested Zarrab in 2013.

But Erdogan soon shut the case down, firing and even jailing police officers and prosecutors handling it. Zarrab was freed, and the scheme resumed, though his role as Iran’s banker to the world had by now drawn the attention of the FBI, which began its own probe. By 2015 federal agents had enough evidence to secure a secret grand jury indictment against Zarrab in New York.

Prosecutors have cited repeated instances in which Zarrab invoked Erdogan’s name in furtherance of the laundering scheme, including recorded conversations in which he told people he’d laid out the entire plan to Erdogan. In one 2013 conversation, Zarrab said: “Even if we do two billion, that is important. Do you understand? It is important for me, in the eye of the prime minister, since I will go straight to him.” (Erdogan was prime minister from 2003 to 2014.) Prosecutors have cited donations Zarrab directed to charities associated with Erdogan’s family.

Despite Zarrab’s efforts, the sanctions had their intended effect. Iran soon came to the negotiating table to discuss modifying its nuclear program. The country struck a deal in July 2015, with the sanctions lifted beginning in January 2016. By then, the course of Zarrab’s odyssey had already been set. On his second day on the witness stand, the Erdogan administration moved to seize his assets in Turkey. And in a speech on Nov. 30, after Zarrab implicated him, Erdogan said: “We have not broken an embargo.”