Media: alleged embezzled millions from Lebanon ended up in Swiss banks

A protester holds Lebanese pounds as he stands in front of burning tires in front Lebanon's central bank building, where anti-government demonstrators rallied against the Lebanese Central Bank Governor Riad Salameh and the deepening financial crisis in Beirut, Lebanon, on January 25, 2023. Copyright 2023 The Associated Press. All Rights Reserved

A large share of the $300-500 million that the governor of the central bank of Lebanon is accused of having embezzled ended up on the accounts of 12 Swiss banks, the SonntagsZeitung newspaper reported on Sunday.

These revelations come just three days after Lebanese authorities chargedExternal link long-time central bank governor (head of the Banque du Liban (BDL) since 1993) Riad Salameh, his brother Raja and one of his assistants with money laundering, embezzlement and illicit enrichment after months of delay in a high-profile case.

The charges are the product of an 18-month probe by Lebanon into whether Salameh and his brother Raja embezzled millions of dollars from the central bank between 2002 and 2015. Judicial authorities in at least five European countries are investigating the Salameh brothers over the same allegations.

The brothers have denied the charges. The governor has dismissed accusations of illicit enrichment as part of an effort to scapegoat him for Lebanon’s financial collapse, which brought new scrutiny of his three decades as governor.

According to SonntagsZeitungExternal link, $250 million were deposited in Raja Salameh’s personal account at the HSBC branch in Geneva. Other sums were deposited at UBS, Credit Suisse, Julius Baer, EFG and Pictet, the Swiss paper said. It claims the transactions were carried out through an offshore company registered in the British Virgin Islands, named Forry Associates and created in 2001. “Considerable sums” were then purportedly transferred to buy real estate in several European countries.

+ Swiss probe Lebanon’s central bank chief over alleged $300m embezzlement.                   

The Office of the Attorney General of Switzerland initiated criminal proceedings for serious suspicion of money laundering in October 2020 and the procedure is still ongoing. According to SonntagsZeitung, millions of dollars in funds have already been frozen, but the federal prosecutor’s office does not provide a figure.

The Swiss Financial Market Supervisory Authority (Finma) has also been conducting preliminary investigations into 12 Swiss banks “for months”, the paper said. A spokesperson confirmed to the SonntagsZeitung that proceedings have been initiated against two financial institutions in the “Lebanese context”. The names of the banks have not been made public.

+ Swiss probe corruption linked to Lebanese central bank.

In 2021, Lebanon opened an investigation into the assets of Riad Salameh, after a request for assistance from the attorney general in Switzerland in the context of investigations into more than $300 million in fund movements made by the governor and his brother Raja.