French prosecutors have opened a preliminary investigation into allegations of money laundering against the head of Lebanon’s central bank, Riad Salameh, who is also accused of associating with an organized criminal group.
French prosecutors have opened a preliminary investigation into allegations of money laundering against Lebanon’s central bank governor, prosecutors said Monday.
The move comes after Switzerland launched an investigation into possible money laundering and embezzlement in Lebanon’s central bank, which is now at the heart of Lebanon’s deep financial crisis.
French prosecutors said the investigation into Riad Salameh opened in late May with possible money laundering charges and association with an organized criminal group.
Salameh, 70, has run Lebanon’s central bank since 1993 and was seen for many years as a symbol of the country’s monetary stability.
In a statement sent to Reuters news agency on Sunday by the bank’s governor, Salameh’s French lawyer, Pierre-Olivier Sur, dismissed the allegations as a politically motivated “communications operation”.
In 2019, Lebanon plunged into its worst economic and financial crisis it can remember. Since then, the country’s currency, the Lebanese pound, has lost about 90% of its value on the black market, decimating the purchasing power of ordinary Lebanese.
More than 40 percent of Lebanese households have reported problems with paying for food and other basic necessities.
Salameh assured depositors last Thursday that the central bank (called Banque du Liban) was not bankrupt and that people’s deposits were safe and would be returned soon, after reverse a decision to stop withdrawals of dollar deposit accounts that sparked street protests.
Lebanon’s anti-government protesters now refer to Salameh (a former investment banker with Merrill Lynch) as a “thief.”
Demonstrations have been held repeatedly outside his office in Beirut as the economic crisis has worsened. According to the World Bank, the country’s gross domestic product (GDP) went from about $ 55 billion in 2019 to about $ 33 billion last year, with a per capita GDP falling by about 40 percent.
In January, Switzerland’s attorney general said he had asked Lebanon to cooperate in the central bank’s investigation.
Lebanese media have reported in recent months that Salameh, his brother and other aides have been involved in illegal business. Complaints include transfers of money abroad despite capital controls imposed at home.
Salameh has denied making these transfers.
French anti-corruption group Sherpa filed a complaint against Salameh in April and cited investments that include millions of euros in property.
Responding last month, Salameh said he had shown that his wealth had been acquired before occupying his banking position almost 30 years ago.
Lebanon opened its own investigation in April following a legal request from Switzerland claiming that more than $ 300 million had been embezzled from the central bank through a company owned by Salameh’s brother.
Lebanon’s financial and political elite is facing growing pressure on allegations of mismanagement, corruption and obstruction of efforts to unblock international aid.