Lebanon’s central bank governor Riad Salameh charged with money laundering, embezzlement and illicit enrichment

Update:

Lebanese Central Bank Governor, Riad Salameh, his brother, Raja, and one of his assistants, Marianne Howayek, were charged with money laundering, embezzlement and illicit enrichment by the Lebanese authorities  on 23rd March 2023, after months of delay. A hearing was set today for March 15th 2023.

Investigations began with a Swiss probe into whether the Salameh brothers illegally took more than $300 million from the central bank between 2002 and 2015. European countries, including France, Germany, Luxembourg, and Liechtenstein, also initiated  investigations into whether millions of dollars of funds allegedly embezzled from the central bank were laundered in Europe.

European Union’s criminal justice cooperation organization announced that they had froze €120 million ($130 million) of Lebanese assets in France, Germany, Luxembourg, Monaco and Belgium in March 2022, and the Lebanese judiciary received several requests for cooperation from European judiciaries. The investigation into Salameh’s finances has been beset by allegations of political interference and hampered by a lack of information-sharing from banks citing Lebanon’s banking secrecy laws.

In January 2023, a team of European investigators from Germany, France and Luxembourg arrived to interrogate witnesses and obtain additional evidence.

Lebanese authorities then opened their own probe after receiving a Swiss judicial cooperation request. Critics questioned whether the Lebanese judiciary, where appointments largely depend on political backing, would conduct a serious investigation into a figure like Salameh, given his top-level political support.

The judge leading the preliminary investigation also faced obstacles and was prevented from attending a Paris meeting with European prosecutors investigating Salameh. In June 2022, another prosecutor refused to charge Salameh with crimes including money laundering, illicit enrichment, forgery, and tax evasion.  On February 23rd 2023 Judge Raja Hamoush charged Riad Salameh, his brother, Raja, and one of his assistants,   with money laundering, embezzlement and illicit enrichment

Judge Charbel Abu Samra took over the case late last month and a hearing was scheduled for March 15th, 2023.  Today, Monday 6th March, Judge Charbel Abu Samra met representatives of three European countries also probing Salameh, with which Lebanon has pledged to cooperate – Germany, France and Luxembourg.

He informed them that he had not yet fully studied the contents of the file, comprising four boxes, and that it would take time to do so, appointing three financial experts to study the file with him.

The charges against Salameh are the product of an 18-month probe into whether Salameh and his brother, Raja, embezzled more than $300 million from the Central Bank between 2002 and 2015.

Lebanon’s judiciary is known for its political backing of its appointments, and critics have doubted whether they will take the case seriously. The country has been without a president and fully empowered cabinet for months, and Salameh still enjoys support from powerful figures, including Parliament Speaker Nabih Berri and Prime Minister Najib Mikati.

Salameh’s term ends in July, and he has said he does not want to continue in the post. The finance minister said this month that replacing him would be difficult, citing Lebanon’s political complexities.

The Salameh brothers have now filed a lawsuit against the state, alleging that the financial prosecutor, Jean Tannous, had committed serious errors in his investigation. Despite decades of rampant corruption, high-profile assassinations, the port blast, and the country’s 2019 financial collapse, few top Lebanese officials have ever been convicted of crimes.