Former Lebanon Central Bank Governor Charged With Embezzling $42 Million

Riad Salameh (R), Lebanon's outgoing central bank governor, greets employees at a farewell ceremony marking the end of his 30 years in office outside the central bank building in Beirut on July 31, 2023. Hassan Ammar/The Canadian Press/AP

The former governor of Lebanon’s central bank, Riad Salameh, has been charged with embezzling $42 million and will remain in custody until next week.

Salameh, 73, was charged by the Office of the Public Prosecutor on Sept. 4, one day after he was detained following an interrogation on Sept. 2 by Lebanon’s top public prosecutor, Judge Jamal al-Hajjar.

His case has been transferred to an investigating judge, who will decide whether to keep him in detention.

Salameh has been charged with embezzlement, money laundering, and illicit enrichment.

He denies all wrongdoing and says his wealth was accumulated from inherited properties, wise investments, and his previous income as an investment banker at Merrill Lynch.

Salameh was originally appointed to the governor post in 1993 and was praised for his role in steering Lebanon’s economic recovery after a 15-year civil war.

He managed to keep the economy running amid long spells of political turmoil and tensions with neighbors Syria and Israel.

However,  in late 2019, a financial crisis hit Lebanon, and Salameh’s stock fell. He retired in July 2023.

A permanent replacement has not been named; the bank’s vice governor, Wassim Mansouri, is the acting governor.

During his interrogation by al-Hajjar on Sept. 2, Salameh was asked questions about allegations that a company, Optimum, was hired to manipulate financial statements and conceal the central bank’s hemorrhaging finances.

Salameh is accused of using Optimum to help facilitate embezzlement from the bank.

The central bank has not commented on the charges against Salameh.

France, Germany, and Luxembourg are also investigating Salameh and his associates over the alleged laundering of $330 million and illegal enrichment.

Salameh has claimed the European investigation was part of a political and media-led campaign to make him a scapegoat for Lebanon’s financial troubles.

The United States, Canada, and Britain have all imposed sanctions on Salameh and several associates.

France has issued an international arrest warrant for him, although it’s unlikely the Lebanese government will hand over one of its own citizens.

A Flight Risk?

In deciding whether or not to release Salameh, the investigating judge will have to consider whether or not he is a flight risk.

He may also be conscious of the Carlos Ghosn affair.

In 2020 the former chairman of Nissan, Carlos Ghosn, who had been held under house arrest in Japan—accused of hiding income and enriching himself through payments to car dealerships in the Middle East—was smuggled out of the country and flown to his native Lebanon.

Ghosn, who was born in Brazil to Lebanese parents, was greeted by Lebanese President Michel Aoun after flying into Beirut via Istanbul.

Lebanon does not have an extradition agreement with Japan.

Ghosn denies wrongdoing and has sued Nissan for defamation.

Lebanon has been without a president for almost two years and is run by a caretaker Cabinet with limited functions.

The last president, 88-year-old Aoun, was a former Lebanese army general and Maronite Christian nationalist.

His term ran out in Oct. 2022 but squabbling political rivals have been unable to choose a successor and the prime minister—Lebanon’s richest man, Najib Mikati—has assumed the powers of the presidency amid the deadlock.

In Oct. 2023 the U.S. State Department stated, “We call on the country’s parliamentarians to do their duty and elect a president who will put the country and all its people first, commit to forming a government free of corruption, and implement critical economic reforms, chief among them those needed to secure an IMF program, the country’s only viable path out of the current economic crisis. ”

Associated Press and Reuters contributed to this report.