In this courtroom sketch, Assistant U.S. Attorney David Denton points at defendant Mehmet Hakan Atilla, right, during opening arguments of a trial, Tuesday, Nov. 28, 2017, in New York federal court. Denton said Atilla, deputy CEO of Halkbank, was the architect of a "massively successful" scheme to dupe U.S. banks into letting Iran move money around the world. Judge Richard Berman is seated at the bench, background left. (Elizabeth Williams via AP)

In this courtroom sketch, Assistant U.S. Attorney David Denton points at defendant Mehmet Hakan Atilla, right, during opening arguments of a trial, Tuesday, Nov. 28, 2017, in New York federal court. Denton said Atilla, deputy CEO of Halkbank, was the architect of a "massively successful" scheme to dupe U.S. banks into letting Iran move money around the world. Judge Richard Berman is seated at the bench, background left. (Elizabeth Williams via AP)

NEW YORK (AP) — Prosecutors on Tuesday revealed that a wealthy Turkish-Iranian gold trader struck a plea deal to testify about a vast corruption scheme they say reached into the upper levels of the Turkish government — a development that could further strain relations between the United States and one of its key strategic allies.

Reza Zarrab will take the witness stand to detail how he and Turkish banker Mehmet Hakan Atilla laundered Iranian oil money in violation of U.S. economic sanctions against Iran, a conspiracy involving bribes and kickbacks to high-level officials, Assistant U.S. Attorney David Denton said in opening statements at Atilla’s trial in New York City.

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The scheme was “so large that it was protected by government ministers in Turkey and Iran,” Denton said.

Zarrab, 34, was arrested last year and jailed before entering a plea to bank fraud, money laundering and other charges in secret on Oct. 26. A charging document unsealed on Tuesday alleged that he met with banking government officials — “including the then-governor of the Central Bank of Iran and the then-finance director of the National Iranian Oil Company” — in 2012 to discuss transferring Iranian natural gas proceeds to a Turkish bank, and that he spoke about paying a bribe to a bank executive.

Zarrab accepted responsibility for “busting sanctions and laundering money” and would “tell the inside story and expose the truth behind all those elaborate lies” told by his onetime co-defendant to cover up the scheme, Denton said.

In his opening statement, defense attorney Victor Rocco attacked the credibility of Zarrab by casting him as an international con man.

Zarab’s cooperation agreement was a “deal of a lifetime” that won him his release from a U.S. jail and “shortcut back to his lavish life,” Rocco said. The government witness, he added, has been “squirreled away somewhere with FBI agents in some unknown place” while waiting for his turn to testify, which could be as early as Wednesday.

The prosecution in Manhattan has been major news in Turkey, where President Recep Tayyip Erdogan has repeatedly asked the U.S. to release Zarrab. Turkey’s deputy prime minister recently said Zarrab, who is married to Turkish pop star and TV personality Ebru Gundes, was a “hostage” being forced to testify against Turkey’s government.

Earlier this year, Zarrab hired former New York City Mayor Rudolph Giuliani and former U.S. Attorney General Michael Mukasey in a failed effort to broker a diplomatic end to the case.

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On Tuesday, a Turkish prosecutor issued warrants for the detention of two citizens for cooperating with U.S. prosecutors. The move comes amid a crackdown by Erdogan following a 2016 coup attempt he said was orchestrated by Fethullah Gulen, a Muslim cleric living in self-imposed exile in Pennsylvania. Several Americans have also been arrested in that crackdown.

Erdogan has demanded that Gulen be handed over to Turkey, perhaps in exchange for detained Americans. Gulen has denied having any role in the coup. The group the promotes Gulen’s ideas, New York-based Alliance for Shared Values, said the latest accusations “are baseless and designed to stoke fervor among the Turkish population by making the United States and Mr. Gulen into scapegoats for any and all problems afflicting the Turkish state.”

The scheme in the U.S. case was originally uncovered by Turkish police before bribes to top public officials in Turkey led to a purge of Turkish law enforcement that included imprisonment for some investigators. Zarrab had initially been arrested in Turkey in 2013 in the probe that involved several top Erdogan lieutenants and Halkbank, the state bank. Those charges were later dropped.

“While bribes got rid of the case, they could not get rid of the evidence,” Denton said, noting there were wiretapped conversations by Zarrab. “They did not see the light of the day, until now, until this trial in New York.”

Atilla, 47, a former deputy CEO of Halkbank, was the architect of an effort to dupe U.S. banks into letting Iran move money around the world and blow “a billion-dollar hole in the U.S. economic sanctions,” Denton said.

Rocco countered by saying the real mastermind was Zarrab, a dual citizen of Turkey and Iran who made hundreds of millions of dollars he used to buy jets and yachts and people.”

Zarrab is “a liar, a cheat, a corrupter of men ... a one-man crime wave,” he said.

By contrast, his client “is not corrupt,” he told the jury. “He took no bribes. He is a hard-working person like all of you.”