Erdogan’s family plundered Russian oil money in a massive fraud, inviting Putin’s wrath

Abdullah Bozkurt/Stockholm

A covert scheme to market Russian oil, allegedly orchestrated by the family of Turkish President Recep Tayyip Erdogan, has led to massive fraud amounting to hundreds of millions of dollars, prompting Russia to seek remedies, including threats of violence against those involved.

Facing pressure under Western sanctions, Russia turned to the Turkish corporate sector to facilitate global sales, hoping to leverage the US-linked Turkish banking system, which initially bypassed compliance with sanctions under orders from the Erdogan government.

Under the oil-for-credit scheme, a portion of Russian oil sold to overseas customers was channeled through Mostrade Danışmanlık Ticaret Limited Şirketi (Mostrade), a small financial consulting firm established on October 31, 2019 in Istanbul by Zal Suleymanov, a Russian national of Azeri origin.

The company’s initial capital was declared at 10,000 Turkish lira (approximately $1,750 at the time), suggesting it was likely a front. The real owner is reportedly Fuad Huseynli, a British-Azeri dual national who is said to have set up the company under his driver Suleymanov’s name.

The Credit Bank of Moscow (Московский кредитный банк, MKB) extended credit to Mostrade for the purchase of Russian oil, both directly and through Akida Trading Limited, a Hong Kong-based firm with ties to MKB. On paper it appeared that Mostrade had secured a line of credit from the bank and its subsidiaries, repaying the amount owed with interest.

Trade registry records show the transfer of all shares to Mustafa Yiğit Zeren.

In reality, Mostrade was simply operating as a collector of the money from end-users in other countries such as India and China through Turkish and Emirati banks after Russia sold its oil at negotiated prices. Mostrade reportedly spent 20 billion Russian rubles on a credit line issued by the bank under the scheme.

To access the Turkish banking system, Mostrade’s owner needed Turkish citizenship and the backing of the Turkish government. Consequently, on May 16, 2022, the company was transferred to Mustafa Yiğit Zeren, a 33-year-old financial advisor, and its shares were sold to him for 10,000 Turkish lira.

Zeren, who had previously run a small family firm, suddenly became one of the wealthiest businessmen in Turkey, thanks to his close ties to President Erdogan’s family, particularly Erdogan’s son Bilal Erdogan and his son-in-law Berat Albayrak. These connections not only enriched Zeren, his associates and Erdogan’s family members through government contracts and tenders but also allowed them to operate freely in Turkey’s lucrative energy, mining, communications and construction industries.

The intermediary who facilitated the connection between Zeren and the Erdogan family is Halil İbrahim Bacacı, a trustee for the Erdogan family who played a key role in executing the scheme. Bacacı works closely with Bilal Erdogan, with whom he shares an alma mater, the Kartal Religious High School in Istanbul. While Bacacı ostensibly has lucrative shares in mining, energy and other sectors, he is, in reality, believed to be managing the Erdogan family’s wealth as a caretaker.

After securing such powerful connections, Zeren encountered no difficulties in obtaining licenses and permits and utilizing the Turkish financial system, despite concerns raised by the Banking Regulation and Supervision Agency (BDDK), which feared potential US and EU sanctions for facilitating the trade of Russian oil.

The Mostrade website is still accessible through the internet archive site Wayback Machine:

On June 1, 2023, according to trade registry records, Zeren increased Mostrade’s capital to 40 million Turkish lira to give the appearance that the company could handle hundreds of millions of dollars’ worth of Russian oil purchases. What is more, for the transportation of Russian oil, Zeren established a shipping company named Eurasia Seali̇ne Gemi̇ci̇li̇k ve Ti̇caret Li̇mi̇ted Şirketi on June 23, 2022, with capital of 100,000 Turkish lira. Reports indicate that Mostrade has used this shipping company to handle oil shipments worth $56 billion.

The setup initially functioned smoothly. Russian oil purchased by Mostrade using the Moscow bank’s credit line was transported to clients in India and China. Mostrade received payment from the end-users and transferred the proceeds to the Moscow bank’s subsidiary, minus its commission. Turkish state lenders VakıfBank and Emlak Katılım Bank facilitated these transfers until December 2023, when Turkish banks opted out of the transactions due to concerns about potential US sanctions following stern warnings from US officials.

As a temporary solution, Zeren established bank accounts in the United Arab Emirates and began channeling the oil proceeds through these accounts. Meanwhile, the group planned to acquire its own bank to facilitate these transactions more freely. On November 13, 2023, Zeren informed the BDDK that he had signed an agreement to acquire Turkland Bank (T-BANK), owned by the Lebanese Hariri family, which also has close ties to President Erdogan.

The deal faced resistance at the BDDK, but Zeren leveraged his government connections to overcome these obstacles. He was on the verge of receiving approval when the story on defrauding the Russian bank broke. Following a meeting between T-Bank’s chairman, Michel Accad, and BDDK officials in July 2024, the bank unilaterally voided the sale.

While Russian oil was being marketed through Mostrade, Zeren and his associates became increasingly greedy and began siphoning off the proceeds by transferring payments to various private or corporate accounts they controlled in Turkey. Instead of repaying the debt on the credit line, the funds were diverted elsewhere. It is reported that Zeren used this money to acquire companies in Turkey, including hundreds of gas stations across the country.

As a result, Akida Trading Limited, the Hong Kong-based firm responsible for collecting the debt owed to the Credit Bank of Moscow, was compelled to file a lawsuit with the Moscow Court of Arbitration on May 2, 2024 seeking the seizure of assets belonging to Mostrade and its owner, Zeren. Judge A.G. Avagimyan ruled in favor of the asset seizure. Moreover, Akida filed a dispute with the International Commercial Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation.

A complaint filed in Moscow against Mostrade and Mustafa Yiğit Zeren for fraud was published in Turkish media outlet HalkTV’s website::

The legal battle extended to Turkey as well. Akida’s lawyers filed a criminal complaint with the Istanbul Chief Public Prosecutor’s Office, seeking compensation for the debt totaling $593.7 million and an investigation into criminal activities. The matter was subsequently referred to the organized crime bureau in the prosecutor’s office.

Zeren, backed by the Erdogan family, appears to have been undeterred by these actions. With Erdogan controlling the judiciary in Turkey and law enforcement agencies needing political approval to take action against individuals with close government connections, Zeren continued to operate as usual.

In December 2023 Zeren’s investment company, Zeren Group Yatırım Holding AŞ,, completed the acquisition of Altınbaş Petrol ve Ticaret AŞ, an oil distribution company operating 259 gas stations across the country. In July 2024 the group also signed a contract to purchase TP Petrol Dağıtım A.Ş., which owns over 800 gas stations. The second transaction is pending regulatory approval.

In a statement issued in July, the Zeren Group said it had not been notified of any pending criminal investigation by Turkish authorities and that its CEO, Zeren, faced no travel ban or other punitive judicial measures. The group claimed that it had no connection to Mostrade and attributed any past issues to Huseynli, who reportedly faces legal troubles on fraud charges in both Russia and Azerbaijan.

Trade registry records reveal that Zeren transferred his shares in Mostrade to a Turkish national named Savaş Özsoy on May 6, 2024. What is more, the company’s office was relocated from the building housing Zeren’s other businesses, likely to distance himself from Mostrade amid the ongoing battle with Russia.

Trade registry records reveal that Zeren transferred his shares in Mostrade to a Turkish national named Savaş Özsoy on May 6, 2024:

Amid the dispute between Mostrade and Akida, Mostrade’s website mysteriously vanished from the internet. However, the internet archiving engine Wayback Machine reveals that the website was owned and operated by the Zeren Group.

Influential political and business figures on both sides were enlisted to resolve the outstanding debt collection, but these efforts yielded no results. Roman Ivanovich Avdeev, who owns the majority of shares in the bank and is known to have close ties to Russian President Vladimir Putin, reportedly tapped the Russian intelligence to intimidate Zeren according to Germany-based Turkish journalist Cevheri Guven.

Despite pursuing legal and political avenues to collect the debt, Russia also deployed a team of armed men to raid the Zeren Group offices in Istanbul. During the raid, Zeren’s father, Rıdvan Zeren, who is also a board member, was coerced into signing a handwritten promissory note agreeing to pay the debt.

The note, included in the criminal complaint filed in Turkey, stipulates that Rıdvan Zeren agreed to repay $475 million in monthly installments and transfer 25 percent of the shares in the Zeren Group to the Moscow bank. As collateral for the debt collection, 25 percent of Zeren Group and 25 percent of Zeren Metal shares were listed in the note. The note was co-signed by Nikolay Valeryevich Katorzhnov, CEO of the Credit Bank of Moscow, and witnessed by Yusuf Yatkın, CEO of the Zeren Group.

The promissory note, published by the Turkish media, was coerced from Zeren’s father, Rıdvan Zeren, during a raid on the Zeren Group’s offices in Istanbul by what was reportedly a team from the Russian intelligence service:

It appears Erdogan’s associates miscalculated, believing they could siphon off Russian money amid the sanctions regime, assuming Moscow was reliant on Turkey. They underestimated the potential severity of Russia’s response, as demonstrated by the extreme measures taken to collect the debt, including the raid on Zeren’s offices.

Zeren, fearing for his life from potential Russian operatives, has disappeared. The man who frequently appeared in the Turkish media and was deliberately promoted as a major investor and global business tycoon is now nowhere to be found. With the company having offices in the UK, the Netherlands, Switzerland, Montenegro and the United Arab Emirates, he may be hiding in one of these locations to evade contact with Putin’s associates.