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A recently published forensic analysis reveals irregularities in transactions by former central bank governor Riad Salame. He is wanted by Interpol and has been on the US sanctions list since last week.
In mid-May, France issued an arrest warrant against the former head of the Lebanese central bank, Riad Salame, on suspicion of money laundering, embezzlement and forgery. Shortly thereafter, Germany also followed with an arrest warrant. Interpol was also involved.
In total, he and his brother are said to have shifted 330 million dollars from the Banque du Liban (BDL) to various countries via a network of front companies since 2002 and partly forwarded them to Swiss bank accounts. Millions of these then flowed into companies and properties – also in Switzerland – that were controlled by Salames’ brother, his son, a nephew, his former lover or – in a case from the canton of Geneva – by his lawyer.
And again it’s the Swiss Banken
On behalf of the Lebanese government, the consulting firm Alvarez & Marshal (MA) prepared a more than 330-strong forensic investigation into the activities of the Lebanese central bank governor, which was recently published. In the chapter “Riad Salame Account Analysis”, MA examined BDL accounts on several pages, from which millions flowed into accounts in Swiss and European banks.
Some of the information comes from a request for legal assistance from Switzerland to Lebanon. The shifts in Swiss bank accounts from 2015 to 2020 were examined. Even in the noughties, Salame had a lively business relationship with Swiss banks. The report states: It was not always clear who was beneficially entitled to the millions, often the money was simply passed on via the accounts. Riad Salame wrote to SRF News: “It’s about his personal accounts, the analysis didn’t reveal anything illegal.”
In 2019, USD 150,000 went to Credit Suisse
The report states: According to the analysis, USD 3 million flowed into a UBS account in 2015, EUR 1,665 million to BSI Bank, in 2016 three million to CS, USD 11 million and EUR 4.4 million to JP Morgan (Suisse) SA. In 2017, the bank received another two million USD. In 2018, three million USD and 2.36 million euros ended up with Pictet. In the same year, USD 1 million each flowed into a Salame account at UBS and Credit Suisse.
CS received another USD 150,000 in 2019. In the five years, an additional EUR 7,215 million and USD 2 million flowed into the accounts of the Julius Baer subsidiaries, Bank Julius Baer Europe SA, Luxembourg and Julius Baer Luxembourg SA. The banks do not comment on the investigation, but emphasize that they acted in accordance with the law. For economics professor Peter. V. Kunz, the banks should have taken a closer look. Salame is a politically exposed personality, stricter due diligence would apply.
Difficult requirements for Swiss investigators
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Since October 2020, the Federal Public Prosecutor’s Office (BA) has been conducting a criminal investigation in this case on suspicion of serious money laundering in connection with alleged embezzlement offenses to the detriment of the BDL. She blocked the Salame accounts in Switzerland. In order to proceed further, Swiss law requires proof of a so-called predicate offence. The federal prosecutor’s office must prove that Salame’s actions are just as punishable in Lebanon as in Switzerland. This is often difficult to prove. The local investigative authorities are heavily dependent on the cooperation of the other country – in the specific case of Lebanon.
In other countries such as France or Great Britain it is sufficient – to put it simply – to prove money laundering in such constellations, but not the predicate offence. For political scientist Gretta Fenner, director of the Basel Institute on Governance, Switzerland also needs such an instrument. She is convinced that this could make the legal processing of such money laundering cases much easier.