US, UK and Canada sanction former governor of Lebanon’s central bank, Riad Salameh

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The United States, in coordination with the UK and Canada, has sanctioned the former governor of Lebanon’s central bank, Riad Salameh and four others close to him who “enriched themselves at the expense of the Lebanese people.”

A statement by the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) said Salameh’s “corrupt and unlawful actions have contributed to the breakdown of the rule of law in Lebanon.”

It added that the former central bank governor exploited his position to enrich himself and others close to him by “funnelling hundreds of millions of dollars through layered shell companies to invest in European real estate.”

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Those designated alongside Salameh are his son Nady, his brother Raja, his primary assistant at the bank Marianne Hoayek, and his former partner, Anna Kosakova.

“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,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson.

“We are joining the United Kingdom and Canada in imposing sanctions on the former governor because he used his position to place his personal financial interests and ambitions above those of the people he served, even as the economic crisis in Lebanon worsened.

Probes into Salameh’s activities overseas revealed that he was in fact connected to several shell companies and bank accounts in Europe and the Caribbean, according to the statement.

One of these schemes in which he channelled money to a shell company, Salameh, used Forry Associates, which is owned by his brother Raja in the British Virgin Islands, to divert around $330 million from transactions involving the central bank.

To do so, Salameh approved a contract that permitted Forry Associates to take a “commission on purchases of financial instruments by Lebanese retail banks” from the central bank, despite the fact that the company did not provide any apparent benefit for these transactions.

The contract also did not name Forry Associates or its owner, Raja.

“Salameh and Raja then moved these funds to bank accounts in their own names or the names of other shell companies,” the statement said.

Salameh’s primary assistant at the bank, Marianne Hoayek, also participated in this scheme as she wired “hundreds of millions of dollars - far more than her official salary accounted for - from her own bank account to those of Salameh and Raja.”

These diverted funds were often transferred to several property management companies in France, Germany, Luxembourg, and Belgium.

The companies were registered in the names of either Salameh’s son, Nady, or Salameh’s former partner, Anna Kosakova.

The sanctions effectively freeze any US-based assets of Salameh and his associates and prohibit transactions between them and US citizens or businesses.

The statement noted that this action does not apply to the central bank.

Last month, Salameh, 73, stepped down from his position after a 30-year tenure.

He stands formally accused in Lebanon, France and Germany of embezzling hundreds of millions in public funds from the central bank.

Salameh also faces Interpol Red Notices stemming from arrest warrants in Germany and France. He is still under investigation in at least three other countries over corruption charges.

Salameh, in messages to Reuters, denied the allegations made by the three sanctioning countries and said he would challenge them. Some of his assets had already been frozen in previous investigations, he said.

With agencies

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