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For the first time, the financial market supervisory authority is taking action in the handling of sensitive funds belonging to the former Lebanese central bank chief.
It’s about one of the most sensational money laundering cases in Switzerland. The former head of the Lebanese Central Bank, Riad Salameh, is suspected of embezzling more than $330 million from the Lebanese Central Bank and laundering some of it through banks in Switzerland with the help of his brother Raja.
In this case, the Swiss Financial Market Supervisory Authority Finma initiated so-called enforcement proceedings at two Swiss banks two years ago. This is a compulsory procedure in which a bank must disclose its business activities to the supervisory authority. Failure to do so could result in the banking license being revoked.
Legend: The Geneva private bank Audi is not in a good light. SRF
One of the enforcement proceedings was completed last week. The company found that the Swiss subsidiary of the Lebanese bank Audi had repeatedly seriously violated its duty of care by insufficiently clarifying customer relationships and not reporting large amounts to the money laundering reporting office. Among other things, the bank must hand over four million francs of the profit generated from these business relationships.
Two banks in Finma’s sights
The bank is cooperative. She told SRF News that she ended sensitive customer relationships and exchanged management positions. She writes: “With the clarification of this matter (…) we remain committed to the highest compliance standards and look forward to continuing to work with Finma and all regulatory authorities in the countries in which we operate to ensure a secure, transparent and promote an honest financial environment.”
According to well-informed Lebanese sources, the second enforcement proceedings are underway against the Swiss subsidiary of the Lebanese Bank Med, which is also domiciled in Geneva. The bank has no comment on this.
Caption: A demonstrator fires fireworks at a Bank Med building in the capital of Lebanon during protests in Beirut on January 19, 2024. EPA/WAEL HAMZEH
In addition to Finma, the Federal Prosecutor’s Office is also active in this affair. This is shown by a leaked Swiss request for legal assistance to Lebanon from November 2020. The request for legal assistance has been submitted to SRF News.
It names several Swiss banks that are said to have managed funds belonging to the former central bank chief, Riad Salameh, for years. This involves a total of around 16.5 million US dollars and three million Swiss francs. Among those mentioned are UBS, Credit Suisse, the private banks EFG, Julius Baer and Pictet. According to media reports, the Pictet bank is said to have informed the money laundering reporting office and initiated the case.
Arrest warrant against the ex-bank boss
Several international investigations are currently underway against Salameh. Allegedly, money that actually belongs to the Lebanese central bank also flowed into real estate in Great Britain, France, Luxembourg, Monaco, Liechtenstein and Germany. Millions of dollars in assets have been confiscated in various countries.
Germany and France issued an arrest warrant against the former Lebanese central bank chief last year. Salameh resigned from his position last summer. He cannot leave Lebanon without risking arrest.