Lebanon’s former central bank governor Riad Salameh has been arrested in Beirut on suspicion of embezzling $40 million from the bank.
Mr Salameh is expected to remain in custody for questioning as there is concern he might try to flee the country.
If tried, convicted, and imprisoned, Mr Salameh would be Lebanon’s first senior official to be held accountable for financial crimes.
He was once hailed by Lebanese as a miracle worker for aiding the country’s economic recovery after 15 years of civil war, which ended in 1990. After serving three decades as governor of the central bank, the Banque du Liban, he stood down last year amid corruption allegations.
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Now Mr Salameh (73), faces multiple cases of embezzlement, money laundering, fraud, and tax evasion both at home and abroad after an inquiry was launched in July 2023.
He has also been blamed by many Lebanese for the financial crisis which began in October 2019. The crisis saw the Lebanese currency devalued by 90 per cent, soaring levels of inflation and banks being forced to severely ration withdrawals by depositors. Frustrated clients frequently resorted to bank robbery to access their money or empty their accounts. The World Bank has dubbed Lebanon’s crisis one of the world’s worst in 150 years.
Mr Salameh allegedly took $111 million in illicit commissions between 2015 and 2018 from the bank’s dealings with the Lebanese brokerage firm Optimum.
The firm has reportedly been under investigation since last year for reportedly manipulating financial statements and concealing Lebanon’s financial losses.
Mr Salameh was questioned shortly before leaving the bank and his Lebanese assets were frozen.
Once public prosecutor Jamal al-Hajjar has filed charges against Mr Salameh, the case will be transferred to an investigative judge.
Six European countries have charged Mr Salameh with embezzling hundreds of millions of dollars through Forry Associates, his brother Raja Salameh’s firm.
In 2022, France, Germany and Luxembourg seized $135 million in assets, including luxury properties, following an investigation of Mr Salameh and four associates who are accused of embezzling $335 million between 2002 and 2021.
In 2023, Interpol issued a red notice against Mr Salameh on the basis of French and German arrest warrants, although Lebanon does not extradite its citizens. The US, Britain and Canada have sanctioned him.
Lebanon has been unable to tackle its economic crisis due to deadlock among the country’s bickering political factions. Parliament has failed 10 times to elect a president since ex-president Michel Aoun retired in October 2022. As a result, the current caretaker government has been unable enact reforms needed to qualify Lebanon for major injections of funds to rescue the economy.
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