Lebanon’s central bank has initiated a lawsuit against a former high-ranking bank official and a former banker, alleging illegal enrichment and misappropriation of central bank resources through offshore shell companies, according to Governor Karim Souaid.
The move aims to reclaim squandered or misdirected funds, potentially providing liquidity to facilitate the return of depositors’ money, Souaid stated during a press conference.
Although Souaid refrained from naming the individuals, the action coincides with ongoing probes into former central bank governor Riad Salame, who faces accusations of embezzling over $300 million in public money from 2002 to 2015.
In September 2024, Lebanese judicial authorities issued an arrest warrant for Salame on several financial offenses, including public fund embezzlement. The following April, an investigative judge referred him for trial on charges of embezzlement and illicit enrichment. Salame, who led Banque du Liban for three decades until his resignation in July 2023, was released in August on a record $20 million bail and is prohibited from traveling.
“Legal and judicial steps will be taken against anyone proven to have embezzled or misused funds from the Banque du Liban, leading to the depletion of the bank’s assets,” Souaid declared.
Souaid also announced that the central bank would act as a primary plaintiff in the state’s investigation into Forry Associates, a firm established in the British Virgin Islands in 2001. The central bank alleges Forry illegally collected commissions on all financial instrument transactions with BDL, diverting the funds rather than returning them to the bank.
Forry Associates is controlled by Raja Salameh, the younger brother of the former governor. Both brothers are under investigation for money laundering and embezzlement in multiple European nations, including France, Switzerland, Liechtenstein, and Luxembourg.
A 2023 forensic audit by Alvarez & Marsal uncovered $333 million in wire payments made by the central bank to Forry Associates between 2002 and March 2015. Salame acknowledged the transactions in 2021 but denied wrongdoing, asserting they were approved by the bank’s board.
Further investigations connected Forry more directly to Salame. A 2021 Luxembourg judicial probe revealed that on May 16, 2012, Forry transferred over €2.8 million to a Luxembourg-based company controlled by Salame.
Souaid indicated the central bank is preparing additional legal actions against other parties, including an unnamed company that allegedly profited from a “shady” consulting account at BDL, through which large sums were transferred unrelated to the bank’s mandates or depositors’ funds.