U.S. sanctions former Lebanon central bank governor for international corruption scheme

Aug. 10 (UPI) -- The U.S. Treasury Department on Thursday sanctioned Riad Salameh, the former governor of Lebanon's Central Bank, for alleged corrupt and unlawful actions contributing to the breakdown of the rule of law in Lebanon.

Salameh allegedly abused his position of power to enrich himself and associates by diverting roughly $330 million from Banque du Liban transactions with the assistance of his brother Raja's company Forry Associates.

Millions of dollars were then put through shell companies investing in European real estate.

The money moving through Raja Salameh's shell company in the British Virgin Islands was later moved to accounts in Riad and Raja Salameh's own names, according to the Treasury Department.

"By using his position to enrich himself, his family, and his associates in apparent contravention of Lebanese law, Salameh contributed to Lebanon's endemic corruption and perpetuated the perception that elites in Lebanon need not abide by the same rules that apply to all Lebanese people," Brian E. Nelson, undersecretary of the Treasury for terrorism and financial intelligence, said in a statement.

Treasury said Salameh approved a contract that allowed his brother's company to take a commission on the central bank's purchase of financial instruments even though that company provided no apparent benefit to the bank.

Britain and Canada are also sanctioning Salameh, according to the Treasury Department.

The U.S. sanctions don't apply to the Banque du Liban or the bank's correspondent bank relationships.

Salameh, Treasury said, is connected to numerous shell companies and bank accounts in Europe and the Caribbean.

The Treasury Department said some of the diverted bank funds were transferred to several property management companies in France, Germany, Luxembourg and Belgium registered in the names of Salameh's son Nady Salameh or former Salameh partner Anna Kosakova.

Salameh stepped down from his position at Lebanon's central bank in July, after being blamed for a financial crisis that melted down Lebanon's economy amid high inflation.

He's being investigated by at least seven countries, including Lebanon, for embezzlement and illegal enrichment. Germany and France have issued arrest warrants and seized some of Salameh's assets.

Salameh has denied allegations that he laundered over $300 million in money from bank transactions.