Revealed: Riad Salameh accused of using embezzled millions to build vast property empire
The first definitive account of how prosecutors believe the Lebanese central bank governor and his accomplices stole up to $330m – and what they did with the money
The National can today reveal the full extent of the prosecution case against Riad Salameh, the Lebanon central bank chief accused of embezzling $330 million from the financially stricken country.
Previously unseen documents, obtained by The National from two independent sources, disclose in detail how Mr Salameh is alleged to have siphoned the funds into Europe and the US, the companies created to execute the plan, the accomplices he is said to have used and the vast property empire he now controls.
Among the new revelations are:
– A complete mapping of the Salameh clan's vast real estate empire across Europe, which has been seized by the judiciary for a total value of about $92 million. This includes mansions in prime areas of European capitals and industrial and commercial buildings that generate significant rental income, all suspected to have been acquired with Lebanese public funds.
– Previously undisclosed US real estate tied to Raja Salameh, the governor's brother, shedding light on the expansive reach of the Salameh empire worldwide, with identified properties alone valued at a minimum of $4.4 million.
– The family affair behind the scheme, the assigned roles of family members and the relevant assets they own.
– The indirect enabler of the alleged money laundering scheme and, notably, the lack of due diligence from European banks, which allowed about $100 million of suspicious funds to flow through Luxembourg-based companies, all while the EU banks displayed “no concern” regarding “the origin of [Riad Salameh's] wealth”.
– New alleged protagonists under investigation, with figures such as Christian Noyer, a former French central banker who provided undeclared consultancy services for Lebanon's central bank.
– The behind-the-scenes details of the investigation, involving hearings, detentions and large-scale police raids.
France, Luxembourg, Germany, Switzerland, Belgium and Liechtenstein are all investigating Riad Salameh for alleged embezzlement from the Lebanon central bank with the suspected assistance of his brother, Raja.
It is alleged that the governor funnelled public funds through commissions paid to his brother’s company, neph Associates Ltd, under an irregular agreement with Lebanon's central bank from 2002 and 2016.
During this time, Forry would collect a 0.38 per cent commission from commercial banks, without them knowing and without providing any services in return, each time they bought financial instruments from the central bank.
The alleged ill-gotten funds followed a complex journey, typical of a money laundering scheme, traversing continents and ultimately being used for the acquisition of luxury properties within the EU.
Suspicions are such that both the French and German judiciaries have issued arrest warrants for Riad Salameh, leading to an Interpol red notice.
Three people have been placed under formal investigation in France, including Marianne Hoayek, his former assistant, Anna Kosakova, his romantic partner, and Lebanese banker Marwan Kheireddine.
Investigations are still ongoing and those accused are under investigation.
Despite the money laundering allegations, Riad Salameh continues to hold his position at the helm of Lebanon's central bank.
While his mandate is set to end on July 31, uncertainty lingers over the appointment of his successor.
Riad Salameh declared in an interview on Wednesday night that he would not be seeking another term.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
UN Panel of Experts found regime secretly sold a fifth of the country's gold reserves.
The panel’s 2017 report followed a trail to West Africa where large sums of cash and gold were hidden by Abdullah Al Senussi, Qaddafi’s former intelligence chief, in 2011.
Cases filled with cash that was said to amount to $560m in 100 dollar notes, that was kept by a group of Libyans in Ouagadougou, Burkina Faso.
A second stash was said to have been held in Accra, Ghana, inside boxes at the local offices of an international human rights organisation based in France.
Company name: baraka
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Current staff: 12
Stage: Pre-seed capital raising of $1 million
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Juliot Vinolia’s checklist for adopting alternate-day fasting
- Don’t do it more than once in three days
- Don’t go under 700 calories on fasting days
- Ensure there is sufficient water intake, as the body can go in dehydration mode
- Ensure there is enough roughage (fibre) in the food on fasting days as well
- Do not binge on processed or fatty foods on non-fasting days
- Complement fasting with plant-based foods, fruits, vegetables, seafood. Cut out processed meats and processed carbohydrates
- Manage your sleep
- People with existing gastric or mental health issues should avoid fasting
- Do not fast for prolonged periods without supervision by a qualified expert
Company Fact Box
Company name/date started: Abwaab Technologies / September 2019
Founders: Hamdi Tabbaa, co-founder and CEO. Hussein Alsarabi, co-founder and CTO
Based: Amman, Jordan
Sector: Education Technology
Size (employees/revenue): Total team size: 65. Full-time employees: 25. Revenue undisclosed
Stage: early-stage startup
Investors: Adam Tech Ventures, Endure Capital, Equitrust, the World Bank-backed Innovative Startups SMEs Fund, a London investment fund, a number of former and current executives from Uber and Netflix, among others.
