(Bloomberg) -- Lebanon’s former central bank governor is spending a third day in custody after being charged over corruption allegations, a case that’s shocked a population unused to the prosecution of senior officials linked to the country’s economic collapse.
The state prosecutor detained Riad Salameh at a police station in Beirut after summoning him for questioning on Tuesday. He was then charged by the financial prosecutor with embezzling public funds, forgery, illicit enrichment and money laundering, an official in the Lebanese judiciary said, preferring to remain anonymous as the information is not public.
Salameh, 74, was head of Lebanon’s central bank for three decades before stepping down last year, and is widely blamed for setting policies that triggered a 2019 financial crisis and saw Lebanon default on some $30 billion of Eurobonds. The central bank was left with with a $70 billion hole in its balance sheet, and people’s savings were wiped out by a currency collapse.
Salameh’s final years in office were mired with corruption charges, international investigations and an interpol red notice that remains in effect. He’s been sanctioned by both the US and the UK, with the US Treasury accusing him of abusing his position of power to enrich himself and his associates.
The former governor has repeatedly denied allegations against him and has said that his fortune was amassed during his previous career in finance.
The judiciary’s move was the first detention of a former official of Salameh’s stature, despite years of investigating corruption cases involving high-ranking figures.
“We are surprised by what happened and we don’t know the background of such a decision,” Hafez Zakhour, one of Salameh’s lawyers, told Bloomberg.
Zakhour said he wasn’t able to take any legal action until Salameh appears in front of the investigative judge and “we can review the details of the case and the documents that justified his detention.” That’s not expected to take place before Friday.
Out of Spotlight
Salameh, who was a private banker at Merrill Lynch before becoming governor in 1993, played a key role in maintaining Lebanon’s currency peg for over two decades before it unraveled during the crisis. He has largely stayed out of the spotlight since his 30-year term ended and has evaded previous requests for questioning.
Salameh attended Tuesday’s interrogation without a lawyer at his own request after a notice was delivered and handed to him directly at his home north of Beirut, the judicial official said.
The current case centers around $41 million that Salameh allegedly embezzled from the central bank via fake companies that bought treasury bills and made profits from selling them.
The former governor is among suspects in a joint investigation by France, Germany and Luxembourg that’s probing money laundering and embezzlement of public funds in Lebanon between 2002 and 2021.
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