Who is Riad Salameh, Lebanon’s Former Central Bank Chief Now Under Arrest?

BEIRUT – Riad Salameh, the former governor of Lebanon’s central bank, was arrested on Tuesday on charges of fraud. Once celebrated as a financial expert, his reputation has been severely damaged due to numerous corruption allegations, both locally and internationally, alongside the severe collapse of the banking sector in Lebanon.

At 74 years old, Salameh was once considered a cornerstone of Lebanon’s financial system, which unraveled in 2019, leading to widespread poverty and leaving many savers unable to access their deposits. As investigations into his conduct multiplied, his reputation continued to decline, particularly as various European countries began probing whether he misused his authority to embezzle substantial amounts of public funds during his decades in office.

According to a senior Lebanese judicial official, Salameh was arrested in relation to money laundering, fraud, and embezzlement linked to a Lebanese brokerage firm called Optimum Invest, among other ongoing investigations. Salameh and his legal team have not commented on the charges. The CEO of Optimum has stated that a recent financial audit revealed no wrongdoing by the firm in its dealings with the central bank.

This investigation is separate from earlier corruption inquiries focused on commissions that the central bank levied on banks for purchasing government securities, the revenues from which were allegedly diverted to Forry Associates, a company owned by Salameh’s brother.

Salameh and his brother have consistently denied any allegations of diverting or laundering public funds. Salameh stepped down from his position in July 2023, asserting that he operated within the law and respected others’ rights.

Just a month after his departure, the U.S., U.K., and Canada imposed sanctions on Salameh, accusing him of actions benefiting himself and his associates—claims he denied. Last year, France and Germany issued arrest warrants for him, with Interpol also listing him as wanted in connection with organized money laundering and other charges.

Despite the legal challenges he faces, Salameh has defended his tenure, suggesting he has been made a scapegoat for a financial disaster stemming from decades of corruption and excessive spending by government factions. Many Lebanese citizens hold Salameh accountable, alongside the ruling parties, for the country’s economic collapse.

Once a prominent figure anticipated as a potential presidential candidate, Salameh enjoyed recognition at various financial conferences and received multiple banking accolades during his time as governor. He presided over a system that provided high-interest returns for savers and maintained a stable exchange rate for the Lebanese pound until the system’s eventual breakdown.

As the economy faltered due to dwindling dollar remittances, the financial system, reliant on continuous foreign currency inflow, became increasingly strained. Critics pointed to Salameh’s strategy of borrowing from local banks to sustain the economy as comparable to a "Ponzi scheme," relying on new debts to pay off existing ones. However, the central bank has maintained that these operations were legitimate, and Salameh has refuted claims that his management constituted a Ponzi scheme.