Lebanon arrests ex-central bank chief Riad Salameh over financial crimes

Lebanon’s former central bank governor, Riad Salameh, was arrested in Beirut on Tuesday over financial crimes linked to a brokerage company, three judicial sources said, his first arrest after years of accusations.

Salameh, 73, was the bank governor for 30 years but his final months were marred by charges of financial crimes including illicit enrichment through public funds by authorities in Lebanon and several other countries.

One judicial source told Reuters the specific charges that led to his arrest on Tuesday were embezzlement, money-laundering and fraud as part of commissions earned through the central bank’s dealings with Optimum Invest between 2015-2018, a Lebanese firm that offers income brokerage services.

Neither Salameh, his lawyer or Optimum responded to requests for comment. Salameh has previously denied any accusations of financial crimes.

Tuesday’s charges are separate from previous financial crimes with which he was charged linked to Forry Associates, a company controlled by Salameh’s brother, Raja. The brothers were accused of using Forry to divert $330 million in public funds through commissions.

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Despite facing charges in Lebanon, arrest warrants in both France and Germany and an Interpol Red Notice, Salameh had never been apprehended.

He will be held for four days as a “precautionary arrest” before the case is transferred to the Beirut public prosecutor, another judicial source said.

Two of the judicial sources told Reuters on Tuesday that Salameh was arrested following a hearing at Lebanon’s justice palace about the central bank’s dealings with Optimum Invest.

They said Optimum had dealt with Lebanon’s central bank to buy and sell treasury bonds and certificates of deposit with quick turnovers to make major profits.

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Optimum’s CEO Reine Abboud told Reuters by phone that the company had not been present at the hearing and heard about the arrest through local media.

Abboud referred Reuters to a statement on Optimum’s website that said a financial audit in late 2023 had found “no evidence of wrongdoing or illegality” in the company’s dealings with the central bank.

Lebanon’s caretaker justice minister Henry Khoury told Reuters that he did not have details of the file.

“There is no doubt that the Public Prosecutor did what was required of him and interrogated former governor Riad Salameh,” he said.

Caretaker prime minister Najib Mikati told pan-Arab broadcaster Al-Hadath that the government will not intervene in the case.

Tuesday’s arrest marks a serious reversal for a man who once enjoyed high-level backing from Lebanon’s top politicians and was seen as a possible president.

After taking the helm of the central bank following a devastating 15-year civil war, Salameh built a reputation as a competent steward of the financial system.

His fall mirrors that of Lebanon’s financial system, which has collapsed five years into an economic meltdown and now faces an appraisal by a financial watchdog in the coming weeks that could place it on a “grey list” warranting additional scrutiny.

One of the main gap areas identified by the Financial Action Task Force is a lack of judicial action on alleged financial crimes.

A diplomatic and a judicial source said they viewed Salameh’s arrest as a potential attempt to try to show FATF appraisers something was now being done.