The hearing took place in Beirut in Spring 2022. At that time, the Lebanese prosecutor Jean Tannous received in his office Marwan Issa El-Khoury, a Franco- Lebanese lawyer who could allow him to make further progress on this highly sensitive case that he was in charge of. Tannous was then investigating Riad Salameh, the all-powerful governor of the Banque du Liban (BDL) from 1993 to July 2023. This man is at the heart of an extensive investigation, accused of embezzling public funds. He was arrested in Lebanon in early September 2024.

The Lebanese prosecutor was interested in hearing the testimony of Issa El-Khoury for more than one reason, because this lawyer played a key role in helping Lebanon’s top banker and his younger brother, Raja, as well as their relatives, to set up authorized legal structures with the intention of accumulating real estate assets in several European countries with funds presumed to be of illicit origin. Issa El-Khoury also knew how the Salameh clan operated from the inside, since he was none other than the nephew of the two brothers. He had therefore assumed the dual role of, on the one hand, acting as legal defence and, on the other, as a provider of shell companies to obscure the transactions being carried out and conceal the ultimate beneficial owners.

His testimony in Lebanon – which Public Eye has been able to supplement thanks to other documents – sheds light on the real-estate investments transacted behind the scenes in Belgium, Germany, the United States and the United Kingdom via a complex network of offshore companies which he created and/or administered. This real estate portfolio was only detected by the judicial authorities following the seizure, led by prosecutor Tannous, of all the documentation relating to these different entities, stored in the Beirut offices of Riad Salameh’s brother. 

It won’t come as a surprise to know that Switzerland was at the forefront of these schemes. And this was where the highly intricate Salameh affair began almost four years ago, reported by numerous foreign media outlets.

The governor’s vast offshore fortune

August 2020. This is when OCCRP, a network of investigative journalists, and its Lebanese partner Daraj, an independent online media company, published a major investigation into Riad Salameh: “Lebanon’s Offshore Governor”. The journalists revealed how Salameh and his relatives hid behind a network of offshore companies, enabling them to increase their immense fortune and make investments in several countries. The names of certain entities that have their accounts in Switzerland were mentioned.

Several Swiss banks, including HSBC Private Bank (Suisse) SA, Julius Baer and Pictet, which had sheltered a large part of the Salameh clan’s fortune for decades, then came to their senses and reported the matter to Money Laundering Reporting Office Switzerland (MROS). In Bern, investigators discovered with some astonishment what seemed to be an extensive scheme to embezzle funds from the Banque du Liban (BDL), coupled with a process for laundering this money, mainly via Switzerland. In October 2020, the Office of the Attorney General of Switzerland (OAG) launched an investigation into Riad and Raja Salameh on suspicion of aggravated money laundering. This is still currently in progress. Proceedings were then initiated in Lebanon, Belgium, France, the United Kingdom, Germany, Luxembourg and Monaco, primarily based on the banking documentation provided by Bern. At this stage, both brothers are presumed innocent.

In early 2021, the opening of this investigation in Switzerland, made public by a Lebanese newspaper, dropped a bombshell. Lebanon was then plunged into an unprecedented economic crisis. In 2019, the national currency, held artificially at a high exchange rate against the dollar for years, collapsed. Unemployment skyrocketed, while Lebanese savers were barred from accessing their foreign currency accounts. In the meantime, some members of the Lebanese establishment were able to transfer their money abroad. During the demonstrations that took place, Riad Salameh, once considered a financial genius, was now booed, accused of having been complicit in this quagmire and of having enriched himself against a backdrop of endemic corruption.

Switzerland moves the Salameh clan’s funds around

In April 2021, Le Temps, which had obtained the request for mutual legal assistance sent by the Swiss justice system to the Lebanese authorities, revealed some of the shady movements of funds between Lebanon and Switzerland. We have been able to complete this picture by consulting additional documents. It has now been established that between April 2002 and March 2015, nearly USD 330 million were paid from a Banque du Liban account, by means of more than 300 transactions, to the HSBC Private Bank (Switzerland) in Geneva and, into the account of Forry Associates, a small offshore company registered in Tortola, in the British Virgin Islands.

This entity officially had Raja Salameh, the brother of the BDL governor, as its ultimate beneficial owner. Forry Associates hit the jackpot: it was authorized, under a contract dating from 2002 signed by Riad Salameh, to sell on the local market (mainly to banks) treasury bills and Eurobonds issued by the BDL. This is its only mandate as a broker. To do this, it is paid directly by the BDL under the heading “fees and commissions”. Despite an average turnover of $30 million a year, this small entity Forry has no staff or office, and investigators also found that its bank account does not correspond to that of an operating company. It seems to operate more like a pass-through account. 

These facts highlight the casual manner in which several Swiss banking institutions welcomed the millions deposited by the Salameh brothers – two politically exposed persons (PEP) who ought to have undergone enhanced due diligence. HSBC Private Bank (Switzerland) in Geneva is the first to be held accountable, having been sanctioned in June by FINMA for having “breached its obligations in the prevention of money laundering” in connection with this Salameh case.

Of the $330 million or so transferred to HSBC Private Bank (Suisse) SA for the benefit of Forry Associates, a total of $248 million was paid into Raja Salameh’s personal accounts, which were also opened with this bank. From this sum, Rajah Salameh then transferred $207 million to Lebanon, to accounts opened in his name with four local banks, with proof indicating for “personal expenses”. But it goes further than this: Raja Salameh also paid millions to several companies controlled by his brother, Riad Salameh. These entities, most of which had accounts in Switzerland, were also directly funded by Forry Associates. Overall, the ex-governor of the Banque du Liban and his offshore structures have, according to the court documents accessed, allegedly received – directly or indirectly from Forry Associates – more than $26 million, €9.2 million and CHF 5.3 million.

Riad Salameh continues to claim his innocence, explaining that his fortune comes mainly from a time in the distant past (1973–1993) when he was an investment banker at Merrill Lynch. According to him, the money he received from Forry Associates – directly or via his brother – was paid to cover debts that the latter had contracted with him. His lawyers also claim that the BDL’s funds have not been committed. According to Riad Salameh, the commissions were paid to Forry Associates by the financial institutions that bought the treasury bills and Eurobonds and deposited in an account created for this purpose by the BDL. According to the information we have, the incomplete evidence provided by the BDL to support this version of events did not convince investigators in several European countries, who uncovered a convoluted trail taken by the funds – typical, according to them, of a money laundering scheme.

Several of the companies used by Riad Salameh to receive the funds from Forry Associates were constituted under Swiss law. And this is where the facilitator lawyers come into play. 

Lawyers dealing in Geneva-based companies

When questioned in Lebanon at the request of the judicial authorities of several European countries, Riad Salameh admitted to being the ultimate beneficial owner of SI 2 SA. This Geneva-based company, which is still published in the commercial register, is managed by his nephew, the lawyer Issa El-Khoury. It is a Swiss colleague, a partner in a Geneva law firm, who registered SI 2 SA in October 2010 and who is still the sole administrator. The company’s registered capital – CHF 100,000 – was then paid in cash, as indicated in the record we have physically accessed at the Geneva Commercial Register. Its purpose is “to acquire and hold stakes in all companies, but particularly in the real estate sector”.

The Swiss investigation revealed that between 2011 and 2015, SI 2 SA, which had its accounts at EFG Bank Zurich, was credited with nearly CHF 7 million, coming either directly or indirectly, from the accounts of Forry Associates at HSBC Private Bank (Suisse) SA. 

Here again, a winding money trail can be found. So, between 2008 and 2011, a Panamanian company – Westlake Commercial Inc. – also controlled by Riad Salameh, as he himself admitted, received more than $7 million from Forry Associates into its account at the private bank Julius Baer in Zurich, in 13 payments. In Autumn 2011, Westlake Commercial Inc. paid CHF 1.6 million to SI 2 SA for the purpose of “investment in commercial real estate”. SI 2 SA was also credited, between 2011 and 2013, with around CHF 5.3 million from Forry Associates and from Raja Salameh’s personal account at HSBC Private Bank (Suisse) SA, giving each time as the reason for payment: “investment in real estate”. 

Finally, in August 2019, SI 2 SA transferred CHF 7.3 million to another Geneva-based company: Red Street 10 SA, which had its accounts with UBS. In the view of the Swiss investigators, the only logical reason for the transfers between Forry Associates, Westlake Commercial Inc., SI 2 SA and Red Street 10 SA seemed to be to obscure the identity of the real financial beneficiary of these transactions: Riad Salameh. 

As we have been able to document, it was indeed the ex-governor of the Banque du Liban who was behind Red Street 10 SA, a structure wholly owned by SI 2 SA. There is one amusing fact worth mentioning: in Beirut, the premises of the Banque du Liban are located on Hamra Street, which means “red street” in English. Once again, we come across the same Geneva-based lawyer. In September 2008, this lawyer became the sole director of Red Street 10 SA, which, until spring 2020, was a bearer-share company. This totally opaque system, which allows beneficial owners not to be listed, was abolished in Switzerland in 2019, under pressure from the intergovernmental body, the Financial Action Task Force (FATF).

Two office blocks in Rolle and Morges

What were these money transfers used for? We found out that the CHF 7.3 million paid in August 2019 by SI 2 SA to Red Street 10 SA enabled the latter – and therefore its beneficial owner Riad Salameh – to acquire at that time a building in Rolle with a total value of nearly CHF 17 million. To help him make this purchase, he also obtained a loan of CHF 10.2 million from UBS, where Red Street 10 SA has had its accounts since 2008. This is an office block, located on Route de Gilly, which currently houses the European headquarters of an American chemical company. 

This successful acquisition was completed a few months before hundreds of thousands of Lebanese savers fell into poverty as a result of the devastating financial crisis.

Red Street 10 SA has also been traced to the industrial suburb of Morges. According to information obtained from the land register, in October 2008 – just one month after the Geneva-based lawyer became its administrator – the company acquired a 1129 m² building located on the rue de Lausanne. 

We visited this location. The rather shabby-looking four-storey building houses offices is leased by several companies. One tenant confirmed to Public Eye that the name “Red Street 10 SA” did appear on the lease they signed, but said that they didn’t know the natural person behind this company.

The land register of the canton of Vaud confirmed to us that Red Street 10 SA still owns the two buildings. According to the information obtained, both these properties seemed to generate for the ex-governor of the BDL a rental income of CHF 380,000 in 2019 and 2020, then CHF 760,000 from then on. Court documents suggest that Riad Salamé may also have invested in a property project in Biel.  

While, in other European countries, the ex-governor of the BDL targeted the acquisition of luxury properties for himself and his relatives, in Switzerland, he preferred to invest “in commercial properties because this provides a rental and commercial return without being subject to the legal constraints that come with living here,” explains a source close to the matter. 

A Geneva real estate developer and mysterious payments

As we discovered, the two buildings in Morges and Rolle are being managed by a major Swiss property group (specializing in the investment in, development and management of real estate). These properties appeared on its website as part of the “assets” of the Group's real estate portfolio, but when our article went online, these references were removed.

And it is at this group’s address in Geneva where the registered offices of Riad Salameh’s companies – SI 2 SA and Red Street 10 SA – are headquartered. Its director, a well-known local property developer, had authorization from 2008 to sign documents individually on behalf of Red Street 10 SA, along with the Geneva-based lawyer. While Riad Salameh’s nephew, Marwan Issa El Khoury, appeared to be the entity’s legal and tax advisor. 

According to our information, another company also located at this address caught the attention of the investigators: Alstone SA. This entity is administered by the same Geneva-based lawyer as SI 2 SA and Red Street 10 SA. Until 2017, it also had capital made up of bearer shares, with the aim of “taking stakes and administering companies, real estate operations and investments”. Documents sent by Switzerland to France reveal a payment of CHF 2.5 million, received in December 2011 by Alstone SA, which came directly from Forry Associates’ account at HSBC Private Bank (Suisse) SA. Another transfer was also identified: the payment, between September 2009 and January 2012 – again by Forry Associates – of nearly CHF 594,000 to the office of the Geneva-based lawyer who administers the companies SI 2 SA, Red Street 10 SA and Alstone.

“It is clear that these legal structures, though lawful, obscure the way in which funds are transferred. Without the assistance provided by these legal professionals, in this case lawyers, the Salamehs would not have been able to set up such arrangements,” confirms a person close to the case. 

In Switzerland, the Anti-Money Laundering Act (AMLA) only applies to the activities of lawyers if they have direct access to administered funds – whether it involves keeping, moving or investing their clients’ money. Those who offer their services for the purchase of real estate or the creation of companies have, to date, no duty of due diligence. No matter how obscure the legal structure is, these “advisors” are not required to verify the source of the funds involved. As part of the ongoing revision of the AMLA, the Federal Council is proposing to close this loophole, but the reform – which doesn’t go as far as the one rejected by Parliament in 2021 – is once again vehemently opposed by some members of the profession.

Urgent interim measures against Public Eye

When we contacted him, the Geneva-based lawyer did not respond to the detailed questions we sent concerning his role as a director of companies funded by resources presumed to be of suspicious origin by the courts in several countries. He emphasised that after “4 years of investigation, the Office of the Attorney General of Switzerland has neither shown any interest in questioning me nor made any accusations against me”. 

Last June, he filed a request for interim and urgent interim measures to be applied against Public Eye with the Court of First Instance of Geneva on the grounds of a potential imminent infringement of personality rights. This request was accepted, thereby pre-emptively banning us from publishing this investigation. At the end of a hearing held in early August, both parties were able to reach an agreement. Public Eye regards this recourse to the courts as a symptom of the ever-increasing pressure being exerted on journalists and investigative NGOs.

When we contacted the property developer, he replied that the signatory authorization he holds for the Red Street 10 SA bank account is used to “monitor the collection of rents and payments of current expenses, etc. This authorization is merely conferred as part of a professional management mandate,” a “usual situation when properties are held through companies”. He explained that the buildings owned by Red Street 10 SA are not part of his group’s assets. He added that the name of Forry Associates was “unknown to him until he had seen it published in the press” and that he therefore “had no clue about its existence, its activities and/or who it was managed by”.

When we contacted his Lebanese colleague Marwan Issa El-Khoury, there was no reply from him.