EU inspectors launch probe against Lebanon’s central bank chief
According to European judicial documents, since 2002, Riad Salameh embezzled hundreds of millions in public funds using a shell company registered in the Virgin Islands
By News Desk - January 17 2023

Lebanon’s Central Bank Governor Riad Salameh. (Photo credit: JOSEPH EID/AFP/Getty Images)

Prosecutors from Germany, France, and Luxembourg arrived in Lebanon on 16 January to officially launch a probe into embezzlement and money laundering charges issued against Central Bank Governor Riad Salameh.

The investigation is conducted with officials from the central bank and Lebanese commercial banks.

European authorities suspect Salameh and his brother Raja of embezzling more than $330 million from the central bank’s coffers between 2002 and 2015 through contracts awarded to Forry Associates, a company owned by Raja Salameh.

According to European judicial documents reviewed by Emirati news outlet The National, Forry is registered in the Virgin Islands as a shell company used to funnel public funds from Lebanon to Europe.

The brokerage contracts awarded to Forry “do not correspond to any real service performed by Forry” and “benefited Riad Salameh and his relatives without the knowledge of his employer, the Banque Du Liban (central bank),” French investigative judge Aude Buresi says in one of the documents reviewed by The National.

Since 2002, financial institutions unwittingly paid commissions to Salameh’s company every time they bought or sold investment instruments from the central bank.

This money was initially transferred from a Lebanese bank account, where the commissions were paid, to Forry’s account in Switzerland. The money then passed through banks in several countries, landing safely into Luxembourg investment vehicles owned by the Salameh brothers.

Raja Salameh’s Swiss account reportedly received over $204 million between 2002 and 2016.

Meanwhile, bank accounts and offshore structures owned by the central bank governor received about $26.2 million, €9.2 million, and 5.3 million Swiss francs.

Moreover, funds that landed in Lebanon are near impossible to track due to banking secrecy laws, which can only be lifted by the Special Investigation Commission (SIC), chaired by Riad Salameh himself.

Other beneficiaries of the embezzled funds include Ukrainian national Anna Kosakova, a former girlfriend of Riad Salameh who last year was indicted for criminal conspiracy, organized money laundering, and aggravated tax fraud by a French court.

Another of Salameh’s lovers, Lebanese actress Stephanie Saliba, last month was questioned by authorities to determine if the central bank chief used public funds to buy her gifts and luxury properties.

Salameh has repeatedly denied wrongdoing and says the international probes are part of a smear campaign designed to scapegoat him for Lebanon’s financial implosion.

Earlier this year, the UN accused Salameh and the Lebanese central bank of “human rights violations” for its role in setting the stage for the crisis, which has plunged four out of every five Lebanese citizens below the poverty line.

Many banks in Lebanon are under investigation for their dealings with the central bank, which involve the illicit transfer of billions of dollars abroad during the financial collapse.

According to an investigation by The Cradle columnist Lea Azzi, since 1997, Salameh has personally taken all the measures and made all the decisions that led to Lebanon’s economic collapse.

These include executing financial engineering that doubled the profits of bank owners and increased the state’s debt; concealing the losses of the banking sector; applying subsidies to imports of fuel, medicine, and wheat, and then raising prices before finding an alternative for citizens; and finally, of participating in currency market speculation which wiped out the life savings of millions.

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