Lebanon’s veteran central bank chief charged with money laundering

Lebanon’s central bank governor Riad Salameh has been charged with illicit enrichment and money laundering, the first criminal charges brought against the veteran banker who many believe played a central role in the country’s financial meltdown.

A judge in Lebanon’s district court on Monday charged Riad Salameh and his brother Raja with money laundering through several companies they own. Raja Salameh was arrested on Thursday and taken into custody. A Ukrainian woman, Anna Kosakova, was also charged on Monday of aiding them in the illegal enrichment.

Judge Ghada Aoun is probing Riad Salameh’s finances in Lebanon. The charges stem from a lawsuit filed last week by a group of activists, who accuse the brothers of embezzling public funds at the height of Lebanon’s economic meltdown through companies belonging to the Salamehs.

The charges follow weeks of mounting tensions between Riad Salameh and his political opponents, deepening the scandal surrounding the long-running governor of the Banque du Liban. They were the latest indication that the pressure was ramping up on a figure once seen as untouchable, analysts said.

Judge Aoun issued a travel ban on Riad Salameh in January and in February issued a subpoena after he failed to appear in court to be questioned over allegations of corruption and misconduct. State security forces charged with bringing him before the judge struggled to locate him, prompting many to speculate that he had gone into hiding.

Riad Salameh maintains his innocence and has long said that his wealth was acquired during his years as an investment banker.

“Judge Aoun has prior to these charges used her own tweets to express hostile comment[s] against me. The law allows any Lebanese citizen to ask to be questioned by another judge that is non-biased. Ghada Aoun refused to implement the law and pressed charges. In fact, I have commissioned an audit firm to examine my wealth and its source. The auditor confirmed that no public funds were involved in the build-up of my wealth,” Riad Salameh told the Financial Times.

Although he was long celebrated both at home and abroad for managing Lebanon’s precarious finances, Riad Salameh has been the subject of increasing scrutiny since the collapse of Lebanon’s economy in 2019 through his mismanagement of Banque du Liban. The central banker is also facing investigations relating to his finances in several other countries, including France, Germany and Switzerland.

But politicians supportive of Riad Salameh, including Lebanon’s prime minister Najib Mikati, accuse President Michel Aoun of orchestrating a campaign against the governor. Judge Aoun is considered close to the head of state, although they are not related.

The president has publicly blamed the central bank for the financial crisis. But the prime minister, who is a billionaire businessman, said in December that Riad Salameh should remain in his post, arguing that “one does not change their officers during a war”. Last week, Mikati accused certain judges in Lebanon of exacerbating political tensions in the crisis-ridden country.

Riad Salameh was charged in absentia, as he did not appear in court. Judge Aoun said she had referred his case to another judge who would decide whether to issue an arrest warrant. Raja Salameh remains in custody.