Swiss regulator investigates 12 banks in Lebanese central banker corruption case

INA-  sources

Switzerland's financial regulator has investigated 12 banks and launched enforcement proceedings against two of them in relation to corruption charges against longtime central banker Riad Salameh, it said on Monday.

Lebanese authorities charged Salameh, his brother Raja and one of his assistants on Thursday with money laundering, embezzlement and illicit enrichment after months of delay in the high-profile case.

The Salameh brothers have denied wrongdoing throughout the process. The governor insisted on his innocence to Reuters last Thursday, saying the charges were "not an indictment" and pledged to abide by judicial procedures.

The charges are the product of an 18-month probe by Lebanon into whether Salameh and his brother Raja embezzled more than $300 million from the Central Bank between 2002 and 2015.

The Swiss Financial Market Supervisory Authority (FINMA) on Monday said it has investigated 12 banks in relation to allegations of money laundering linked to the case.

"In the context of Lebanon, FINMA carried out investigations at approximately a dozen banks," a spokesman said. "In two cases, FINMA opened enforcement proceedings."

Enforcement proceedings occur when FINMA detects failures at a bank and works to establish what has gone wrong and what measures need to be taken to prevent breaches of money laundering regulations in future.

In serious cases FINMA can impose measures on banks and also refer matters to the Swiss federal prosecutors if criminal breaches are suspected.

FINMA declined to comment on the nature of the enforcement proceedings in this case, or the banks involved.

The Salameh brothers are alleged to have transferred $330 million to Swiss accounts via the offshore company Forry Associates, which is registered in the British Virgin Islands, Swiss newspaper SonntagsZeitung newspaper reported.

Substantial sums were used to purchase real estate in several European Union countries, it said.

Some $250 million went into Raja Salameh's personal account at the HSBC branch in Geneva, the newspaper said. Other sums were deposited at UBS, Credit Suisse, Julius Baer, EFG and Pictet, it added.

Julius Baer, UBS, HSBC and Credit Suisse declined to comment to Reuters.

A Pictet spokeswoman said the bank was not aware of any proceedings against the bank, or its employees in connection with this matter.

EFG said it could not comment on individual clients, but said it has "very strict onboarding and anti-money laundering procedures and complies with all relevant rules and regulations."

Swiss foundation Accountability Now had filed complaints with FINMA against Bank Audi, BankMed, HSBC and Julius Baer in connection with alleged financial crimes committed by Salameh.

Bank Audi Suisse declined to comment on Monday, while BankMed Suisse did not immediately respond.