Lebanon central bank governor faces new fraud, embezzlement charges

Lebanese authorities charged longtime central bank governor Riad Salameh, his brother Raja and one of his assistants on Thursday with money laundering, embezzlement and illicit enrichment after months of delay in the high-profile case.

But the development has also prompted fears that Lebanese authorities could slow down cooperation with European investigators looking into Salameh over the same accusations.

In comments to Reuters on Thursday, Salameh said the charges were "not an indictment" and pledged to abide by the judicial procedures.

"And as you know one is innocent till proven guilty by a court of law," he said in a written response to questions.

The charges come in the waning months of Salameh's latest term as governor, a position he has held for three decades and for which he was often celebrated - until 2019, when Lebanon's economy began to unravel.

#Breaking - Lebanese judge charges central bank chief Riad Salameh with money laundering, illicit enrichment, embezzlement

Also charges his brother Raja and assistant Marianne Howayek.

(This probe is tied to others in France, Germany, Luxembourg, Liechtenstein etc)

— Timour Azhari (@timourazhari) February 23, 2023

The charges are the product of an 18-month probe by Lebanon into whether Salameh and his brother Raja embezzled more than $300 million from the Central Bank between 2002 and 2015.

Judicial authorities in at least five European countries are investigating the Salameh brothers over the same allegations.

The brothers have denied the charges. The governor has dismissed accusations of illicit enrichment as part of an effort to scapegoat him for Lebanon's financial collapse.

Salameh, central bank governor since 1993, still enjoys backing from powerful Lebanese leaders. Many judges largely owe their appointments to politicians.

Salameh's current term is set to end in July. He said he will not seek to stay on but Lebanon's finance minister told Reuters that he would be difficult to replace.

He was charged last year over illicit enrichment in a case related to the purchase and rental of Paris apartments, including some to Lebanon's central bank.

He was repeatedly summoned for questioning in that case but did not attend those hearings.

"It doesn't respect our money."

Why Lebanon's capital controls law is causing unrest ⬇

✍ @DarioSabaghi https://t.co/8gB8fxSF4s

— The New Arab (@The_NewArab) September 17, 2022

The charges filed on Thursday by Lebanese judge Raja Hamoush against the Salameh brothers and an adviser Marianne Hoayek included embezzlement, money laundering, illicit enrichment, fraud and tax evasion.

They represent the first development in the broader case against Salameh since June 2022, when investigator Judge Jean Tannous completed his probe and referred it to the country's top prosecutor Ghassan Oueidat.

Oueidat referred the case - which included Salameh and a number of unidentified associates - to a Beirut prosecutor to file charges including illicit enrichment, embezzlement, money laundering and tax evasion.

But that prosecutor recused himself and was later removed from the case following a complaint from Salameh.

Oueidat said in January he was planning on naming a new prosecutor to the case but that any newly-appointed judge could delay responding to cooperation requests by European judges, pending the Lebanese judge's own investigations.

European investigators are meant to return to Lebanon in early March to continue their probe after a January visit in which they questioned a dozen witnesses, including bankers.

Nizar Saghieh of rights watchdog Legal Agenda said the charges could be interpreted as a positive step in the right direction after months of delay.

"But the second interpretation is that this is just to tell the foreign investigators that we are doing our own probe" and thereby slow down cooperation with the European officials, he told Reuters.

Saghieh said that legal complaints against the judiciary could still slow down the prosecution.

"The risk of paralysis and blockage is still present. We cannot say that this will definitely yield a result," he said.

(Reuters)