Lebanese authorities have launched a preliminary inquiry into alleged bank transfers from Banque du Liban to a company owned by the central bank governor’s brother and related transactions, a prosecutor confirmed to Le Commerce du Levant on Wednesday.
The inquiry, launched “a few weeks ago,” will look into transfers to Forry Associates Ltd. and “the whole cascade that ensued,” according to Jean Tannous, a deputy prosecutor at the Court of Cassation, Lebanon’s highest criminal court. He also confirmed having received documents, notably from BDL, that could constitute evidence in the investigation.
Tannous refrained from giving further details.
The revelation comes on the heels of a similar investigation by Swiss authorities. In January, Switzerland sent Lebanon a request for assistance in the framework of a judicial investigation conducted by the Swiss attorney general’s office on suspicion of “aggravated money laundering in connection with possible embezzlement to the detriment of BDL.”
According to the Swiss request, which Le Commerce du Levant examined, the probe is based on a brokerage contract between BDL and Forry, whose financial beneficiary is Raja Salameh, the brother of BDL Gov. Riad Salameh. The company allegedly received over $330 million in brokerage fees between 2002 and 2014, and these funds were transferred to Swiss accounts belonging to Raja Salameh and to companies reportedly linked to the governor himself.
In Lebanon, “the investigation is concerned with the nature of the BDL transfers to Forry to find out whether they are private or public funds and to expose any underlying embezzlement of public funds,” Tannous said.
Riad Salameh’s office could not immediately be reached for comment.
But in an interview with the French daily Le Figaro published on April 12, the governor asserted that “there is an obvious confusion between the funds that belong to BDL and those that are transferred to it but belong to its clients, primarily in private commercial banks or financial institutions.”
Still, it is up to the Lebanese inquiry to “determine the origin of the funds,” Tannous said, and if they turn out to be private, to investigate why BDL transferred private funds to its broker through one of its accounts.
If the Lebanese investigation was in fact triggered by the Swiss investigation, “its scope is much wider than that of the Swiss prosecution because it would particularly include the amounts reintegrated into the Lebanese financial system,” said Tannous. The Swiss prosecutors’ report indicates that $207 million was transferred from a Swiss account in Raja Salameh’s name to five Lebanese banks.
In February, Tannous sent “a request for mutual legal assistance or clarification to Switzerland, within the framework of the UN Convention against Corruption, to obtain certain evidence in their possession, before launching a judicial probe ourselves.”
“However, we still have not received a response, although we have secured all the requested documents,” he said.
The Swiss attorney general’s office confirmed it had received the request, telling Le Commerce du Levant that it remains “under consideration,” but declining to give further comment.
The next step in the Lebanese investigation will be hearing the testimony of some 15 witnesses, scheduled to begin next week.
“We are currently at the stage of procedural review. The external audit firm is also concerned since any transfer from BDL should normally be included in the accounts,” Tannous added.
The two defendants set to be questioned in the Swiss investigation — the governor and his brother — as well as Riad Salameh’s associate Marianne Howayek, a witness, are not yet among those who will be deposed in Lebanon.
Update: This article was amended to include a response from the Swiss attorney general’s office.
This article was originally published in French in Le Commerce du Levant. Translation by Pascale Menassa.
Lebanese authorities have launched a preliminary inquiry into alleged bank transfers from Banque du Liban to a company owned by the central bank governor’s brother and related transactions, a prosecutor confirmed to Le Commerce du Levant on Wednesday.The inquiry, launched “a few weeks ago,” will look into transfers to Forry Associates Ltd. and “the whole cascade that ensued,” according...