Istanbul’s Grand Bazaar is propping up Venezuela, Russia’s economy as a shocking $250m money-laundering market 

Called “the world’s first shopping mall,” Istanbul’s Grand Bazaar entrances millions of visitors annually with its myriad displays of exotic jewels and spices, elaborate carpets for sale and constant hustle.  

But hardly even hidden behind the smiles of its stalls’ fez-capped salesmen and the city’s ubiquitous scent of döner kebab, a much more sinister business of dark international money laundering takes place.

A $30 million seizure of smuggled jewels and diamonds from the market last April —and February’s arrest of 37 suspects in a vast Turkish money laundering operation — was the tip of the iceberg, experts say.

An estimated $900 million a year in sanctioned Venezuelan gold alone is moving alongside holidaymakers through the crowded market stalls, exchanged for Russian and Iranian commodities — keeping the economies of those sanctioned nations afloat.

“It’s been an epicenter of money laundering for a long time. The gold markets in the Grand Bazaar are quite significant,” Louise Shelley, a professor emerita at George Mason University and specialist on transnational crime, told The Post.

Mostly, the police don’t interfere, she added, “The Turks are fully knowledgeable about this.”

The market dates to the Byzantine Empire when it was established by Sultan Mehmet II in the year 1461 and today offers visitors historic charm and a vast 4,000-shop spread with everything from leather goods to ceramics and handmade pottery.

And for those looking closely enough — blood-soaked metals bound for the international market.

In February, the vice president of the Bazaar was among those detained when Turkish authorities identified 93 shell companies operating in the market moving $250 million in illicit funds — all with the aid, knowingly or otherwise, of some of the nation’s largest banks.

But this is nothing new and most of those arrested won’t face many consequences, said Shelley.

“There’s a political use of a corruption investigation. That’s what may be happening in some of these cases. If they’re arrested, then the government just basically extorts them from some of the money that’s passed through their hands.

“It’s the way for top government officials and the government to extract resources,” she said.

One pipeline identified by international criminologists involves the sanctioned Venezuelan gold being sent to Turkey for refinement. This is legal, provided the gold comes home — except it never does, experts say.  

Venezuelan gold leaves from shady port cities like Venezuela’s Cucuta — where a major financier of Lebanese militant group Hezbollah has been known to operate — and is bought by Turkish criminals.

The gold is then exchanged with Iran and Russia for banned oil. Gold markets in the United Arab Emirates act as another middleman, international crime experts say.  

The barrels of contraband oil are then sold into international markets alongside regular barrels. Pushback is rare, as nations don’t conduct genetic analysis of where their oil comes from.

“If you are making international trade, [around] five percent of containers are checked, there is no port I know checks 100 percent of the containers. [And] the traffic is always high,” Oguzhan Akin, a financial crime expert with anti-corruption nonprofit Transparency International, told The Post.

Meanwhile, the gold is melted down.

“These retail gold sellers also have small workshops where they can actually forge the gold into a different bullion with a different serial number,” Akin explained.

“These workshops can process a big amount of gold. So any country from Russia to Iran, especially neighboring or close by countries, generally can use this easily.”

It’s no small potatoes, either. Entire foreign economies — particularly Russia, which is under heavy international sanctions over its invasion of Ukraine — are increasingly dependent on operations like the Grand Bazaar, and similar open-air gold markets in the United Arab Emirates, to stay solvent.

“This illicit trade is what’s keeping the Russian economy afloat,” Shelley claimed.

“These illicit trade routes are really pivotal not only in moving money but in keeping key elements of the economy operational.”

Illegal gold trafficked through Turkey appears in the West, too, and not just in the form of granny’s souvenir bracelet.

In 2022, $57 million of gold bullion from the sanctioned African nation of Guinea appeared on the London commodities market — supposedly the gold standard of legitimate trading — after being processed by a Turkish refinery.    

It doesn’t stop at precious metals and petroleum, either. In July, a man was detained in Spain for exporting sensitive, internationally regulated weapons technology to Turkey — a haul that was scheduled to end up in Russia.  

Meanwhile, Turkey has been hailed as “the new Switzerland” due to its wealth amnesty laws, which offer a no-questions-asked mechanism for declaring and repatriating assets like gold or cash.

These laws, which get continually renewed, attract billions in furtive funds tied to corruption, money laundering, gambling, drug trafficking and sanctions evasions by allowing untraceable money to enter the economy legally, experts say.

In 2016 Turkish-Iranian gold trader Reza Zarrab was arrested in Miami, where he was en route to Disney World, and charged in federal court with evading sanctions against Iran, money laundering, bank fraud and bribery.

He had orchestrated a multi-billion-dollar scheme using Turkey’s state bank, Halkbank, to trade gold and oil with Iran. Facing decades in prison, he pled guilty in 2017 and became a cooperating witness. The US also filed additional charges against Halkbank in 2019.

Zarrab is still in the US living a lavish life in Miami reportedly under a new name, Aaron Goldsmith. According to Turkish media, Zarrab even signed a deal with Netflix to do a documentary about his life, but the FBI intervened and blocked it, citing their ongoing investigation. His fate won’t be decided until after the Halkbank case.

On Oct. 6, the US Supreme Court rejected an appeal by Halkbank to dismiss criminal charges in the long-running sanctions evasion case, following a Sept. 25 White House visit by Turkey’s President Erdogan. He had reportedly tried to get Trump to drop the case in exchange for a $100 million plea deal.

“In Turkey, there’s a declining rule of law. So, it is becoming more and more easy,” said Akin, noting that the country’s political instability is only encouraging more illicit activity.

“This is a 50-50 game right now. The good guys and bad guys are competing.” 

He’s also alarmed at the number of banking licenses that Turkey is now handing out, considering major banks allegedly play such a pivotal role in the corruption.

“It surprised me. Before this was a very limited area. But this year there’s a boom. I’ve seen at least ten new banks [open] in one year, which is unusual,” he said.