Lebanese army arrests 16 over money exchange fraud

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Sixteen people in Lebanon, mostly Syrians, have been arrested for money transfers and “illegal” currency exchange operations, the army said Saturday, amid a government crackdown on exchange rate manipulation.

The army said it had arrested 13 Syrians and three Lebanese, who were carrying out “money transfers and illegal currency exchange transactions, using licensed companies and offices as a front,” in a statement.

The suspects used an “unlicensed online platform belonging to one of the financial companies,” to carry out the financial transactions, the statement said.

Read more: Lebanon central bank denies currency manipulation after arrest order

The Lebanese pound has been pegged to the dollar at 1,507 since 1997 but the country's worst economic crisis in decades has seen its value plunge to beyond 4,000 on the black market.

Women walk near a branch of Bank of Beirut, in Beirut, Lebanon, March 2, 2020. Picture taken March 2, 2020. (Reuters)
Women walk near a branch of Bank of Beirut, in Beirut, Lebanon, March 2, 2020. Picture taken March 2, 2020. (Reuters)

The government has sought to stem the fall by launching a nationwide crackdown on money changers it alleges are exchanging the pound for dollars at a rate weaker than the 3,200 per dollar permitted by the central bank.

During the arrests, the army seized “significant sums” but also computers and laptops used in these operations, the statement added, specifying that the arrests took place in twelve regions across Lebanon.

The network sent dollars with motorists across the border to Syria, specifically to the northwestern province of Idlib, a security official said, referring to a region controlled by al-Qaeda-linked jihadists and allied rebels.

Read more: Lebanon ready to float currency once aid is secured: Minister

After land borders closed because of the coronavirus pandemic, the network started using an “illegal online platform” controlled by a Lebanese money changer, the official added.

Security forces this week arrested that suspect, and found “hundreds of thousands of dollars” stashed in his Beirut home, he said.

Investigations later led to a Syrian residing in Lebanon who was also arrested for involvement in the plot along with several of his Lebanese and Syrian affiliates, according to the official.

Lebanon has long been a conduit for foreign currency entering war-torn Syria, a country heavily sanctioned by the US and Europe.
The value of the Syrian currency has also fallen markedly.

Lebanon is in the thick of its worst economic crisis since its 1975-1990 civil war, compounded by the coronavirus epidemic.
A liquidity crunch has seen banks in Lebanon halt dollar transfers and withdrawals.

Dozens of money exchange offices have been raided by security forces in recent weeks after their personnel allegedly purchased dollars at black market rates.

The head of the money changers' union, Mahmoud Mrad and the central bank's director of monetary operations, Mazen Hamdan, are among the many arrested for alleged exchange rate manipulation.

Commenting on charges against Hamdan, the central bank denied any “manipulation in currency exchange markets.”

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