Defense lawyers asked a US federal judge Wednesday to throw out a case against an Iranian-Turkish tycoon accused of defying sanctions on Tehran.

Reza Zarrab, 33, was arrested in Miami in March en route to Disney World and charged with conspiring to violate US sanctions against Iran, defraud US banks and launder money by helping Iranian entities transfer funds through US institutions.

His lawyers -- including Ben Brafman who defended former IMF chief Dominique Strauss-Kahn -- argued Zarrab had not broken US laws because he was a foreigner living abroad.

"As a foreign national sitting in Turkey he hasn't violated US criminal law," said one of Zarrab's attorneys, Paul Clement, before Judge Richard Berman. "He's not subject to the jurisdiction of the US.

"This is an unprecedented expanded prosecution."

However, Assistant US Attorney Michael Lockard said "foreign nationals are not permitted to use US financial institutions to benefit Iran."

Wearing a blue prison uniform, Zarrab listened to the proceedings with the assistance of an interpreter.

Brafman also challenged the legality of Zarrab's Miami arrest because customs officers had requested the businessman's cell phone passcode and a list of his businesses and bank accounts before he was allowed to call a lawyer.

"They have orchestrated this and allowed him to incriminate himself," Brafman said.

In response to that argument Lockard said it was not out of line for airport customs agents to request access codes from suspicious passengers, and that Zarrab had given his consent.

Zarrab, who operates a gold brokerage, currency exchange, shipbuilding company, furniture manufacturing business and real estate construction firm, has passports from Iran, Macedonia and Turkey -- countries that either have no extradition treaty with America or do not extradite citizens.

His lawyers unsuccessfully tried in March to let him swap the grimness of a federal lock-up for a swanky Manhattan apartment with round-the-clock security.

Zarrab's March arrest stunned Turkey, where the flamboyant young businessman had been linked to a 2013 corruption scandal that ensnared the government of then premier, now president, Recep Tayyip Erdogan.

Zarrab spent 70 days in custody in Turkey over the scandal, which Erdogan denounced as a plot by his arch-foe -- the US-based Muslim preacher Fethullah Gulen -- to bring down his government.