THE SALAMEH AFFAIR - BVI TO HSBC SWITZERLAND – RED FLAGS IGNORED FOR A DECADE

HSBC and the Salameh affair: alarm bells ignored for a decade - Zürich, Lausanne, 17. March 2025 –

https://www.publiceye.ch/en/media-corner/press-releases/detail/hsbc-und-die-salameh-saga-ein-jahrzehnt-ignorierter-warnungen

EXTRACTED BELOW

1. Facing prosecution in a dozen countries, including Switzerland, Riad Salameh is suspected, in collaboration with his brother Raja, of defrauding the Central Bank of Lebanon (BDL), which he headed from 1993 to 2023, of hundreds of millions of dollars.
2. In Geneva, allegedly illicit funds amounting to nearly $330 million have been identified in accounts at HSBC Private Bank (Switzerland).
3. Public Eye has obtained unpublished court documents showing that, for over a decade, the bank chose to ignore all warnings issued by its compliance department.
4. The criminal proceedings initiated in Switzerland against Riad Salameh and his brother, Raja, on suspicion of aggravated money laundering have established that, between 2002 and 2015, approximately $ 330 million was transferred from the BDL to HSBC Private Bank (Switzerland) in Geneva.
5. The money was deposited in an account held by Forry Associates, a small offshore entity registered in the British Virgin Islands. Its declared beneficial owner is Raja Salameh.
6. Some of this money was then distributed to accounts in Lebanon, as well as to offshore companies, with Riad Salameh, who was still the governor of the BDL at the time, serving as the ultimate beneficiary.
7. According to investigators, these allegedly illegal funds were reportedly used to enable the Salameh family to accumulate real estate assets in several countries, including Switzerland, as we revealed last October.
1. https://www.publiceye.ch/en/topics/corruption/banks-property-and-lawyer-the-riad-salameh-affair-and-its-swiss-connections
8. Unpublished documents obtained by Public Eyed describe how this sensitive case was handled by HSBC Private Bank (Switzerland).
1.  https://www.publiceye.ch/en/topics/corruption/banks-property-and-lawyer-the-riad-salameh-affair-and-its-swiss-connections/salameh-affair-what-happens-when-a-major-geneva-bank-ignores-all-the-money-laundering-red-flags
9. Between 2006 and 2013, the internal compliance department issued nearly 20 warnings and requests for clarification to the managers of the account held by Forry Associates.
10. Apart from the steady inflow of funds, there were also question marks over the many transfers to other obscure companies. However, the management of HSBC Private Bank (Switzerland) systematically ignored the warnings, primarily because of reassurances it received from the banker responsible for the account, who held a senior position within the bank at the time.
11. This in-depth examination of the compliance function within a large private bank underscores the limitations of the Swiss anti-money laundering system, which relies on financial intermediaries to report their clients when suspicions arise.
12. Although the banking relationship with Raja Salameh finally came to an end in the spring of 2016, it was not until the summer of 2020 that HSBC Private Bank (Switzerland) informed the Money Laundering Reporting Office Switzerland (MROS) of its suspicions, as public pressure began to grow.
13. So far, the Geneva-based bank emerged with a largely intact reputation from the affair.
14. But in June 2024, FINMA, the Swiss Financial Market Supervisory Authority, ordered the bank to review its internal procedures.
1. https://www.finma.ch/fr/news/2024/06/20240618-mm-hsbc/
15. HSBC Private Bank (Switzerland) was temporarily banned from establishing new business relationships with politically exposed persons.

Then, the affair took a new turn.

16. In January, the Lebanese government filed a criminal complaint in Switzerland.
1. https://www.thenationalnews.com/news/mena/2025/02/04/lebanon-files-lawsuit-against-hsbc-in-switzerland-over-riad-salameh-embezzlement-case/
17. According to www.publiceye.ch, this would be directed against Riad and Raja Salameh, as well as other parties involved, including HSBC. 
18. The aim is to broaden the scope of the Swiss investigation and to become a plaintiff to obtain possible compensation.

Sources

https://www.publiceye.ch/en/media-corner/press-releases/detail/hsbc-und-die-salameh-saga-ein-jahrzehnt-ignorierter-warnungen