The investigation into Riad Salameh, the former governor of Lebanon's central bank, took a significant turn in early 2021 as Swiss authorities began probing the financial dealings linked to him and his family. This investigation coincided with Lebanon's economic crisis, which began in 2019 when the national currency collapsed.
The investigation revealed a complex web of financial transactions between Lebanon and Switzerland, raising questions about the integrity of the banking practices involved. Reports indicated that between April 2002 and March 2015, nearly USD 330 million was transferred from a Banque du Liban account to HSBC Private Bank in Geneva and to Forry Associates, an offshore company registered in the British Virgin Islands.
This company, owned by Raja Salameh, Riad's brother, was uniquely positioned to profit from a contract allowing it to sell treasury bills and Eurobonds issued by the Banque du Liban. The financial activities surrounding Forry Associates have drawn scrutiny due to their opaque nature. Despite generating an average turnover of $30 million annually, the company reportedly had no staff or physical office.
The funds transferred to HSBC Private Bank were significant, with $248 million deposited into Raja Salameh's personal accounts, from which he allegedly transferred $207 million back to Lebanon for "personal expenses." Moreover, the investigation uncovered that Raja Salameh had also funneled millions to various companies controlled by Riad Salameh, many of which maintained accounts in Switzerland.
The total amount allegedly received by Riad Salameh and his offshore structures from Forry Associates is reported to exceed $26 million, €9.2 million, and CHF 5.3 million. The Swiss financial regulator, FINMA, has taken action against HSBC Private Bank for breaching its obligations in preventing money laundering, particularly in connection with the Salameh case.
Riad Salameh has consistently maintained his innocence, attributing his wealth to his previous career as an investment banker at Merrill Lynch and claiming that the funds received from Forry Associates were intended to cover debts owed to him by his brother. The involvement of offshore entities in the Salameh affair highlights the complexities of international finance and the potential for abuse within the system.
The legal ramifications of the investigation could extend beyond the Salameh family, potentially implicating various financial institutions and legal facilitators involved in these transactions.