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NEW YORK, March 27 (Reuters) - A wealthy Turkish gold trader's decision to hire former New York City Mayor Rudolph Giuliani and former U.S. Attorney General Michael Mukasey to represent him, as he defends against charges he conspired to violate U.S. sanctions on Iran, raises a potential conflict of interest, prosecutors said.
At least eight big banks allegedly victimized by the trader, Reza Zarrab, are current or former clients of Giuliani and Mukasey's law firms, acting U.S. Attorney Joon Kim in Manhattan said in a letter dated Monday to the federal judge hearing the case.
The banks' relationships with the law firms require a special hearing, known as a "Curcio" hearing, to make sure Zarrab understands the potential conflict, Kim said.
Giuliani is a lawyer for Greenberg Traurig, while Mukasey, who is also a former federal judge, is a lawyer for Debevoise & Plimpton. Neither firm had an immediate comment.
The eight banks are Bank of America Corp, Citigroup Inc, Deutsche Bank AG, HSBC Holdings Plc , JPMorgan Chase & Co, Standard Chartered Plc , UBS Group AG and Wells Fargo & Co.
"Through various deceptive acts, including layering the transactions and omitting information concerning the Iranian nexus, Zarrab and his co-conspirators allegedly tricked numerous U.S. financial institutions into processing barred transactions, thus exposing them to significant potential loss," Kim said in a letter to U.S. District Judge Richard Berman, explaining the potential conflict of interest.
Prosecutors accused the Iranian-born Zarrab and two others of engaging in hundreds of millions of dollars of transactions for Iran's government and Iranian entities from 2010 to 2015, in a scheme to evade U.S. sanctions.
A trial is scheduled for Aug. 21. Zarrab has been in federal custody since his March 21, 2016, arrest in Miami, while en route to Disney World with his wife and daughter.
Holding a Curcio hearing now could eliminate one ground for appeal if the case goes against Zarrab.
The case has been closely watched in Turkey, where Zarrab was arrested in 2013 in a corruption probe into individuals with close ties to Tayyip Erdogan, then Turkey's prime minister and now its president. Zarrab is a dual national of Iran and Turkey.
Another lawyer for Zarrab, Benjamin Brafman, said in a letter on Monday that Giuliani and Mukasey's roles "will not require any appearance in court and, accordingly, a hearing is not required."
The case is U.S. v. Zarrab, U.S. District Court, Southern District of New York, No. 15-cr-00867. (Reporting by Jonathan Stempel in New York; Editing by Leslie Adler)