By PAUL O’DONOGHUE, Senior Correspondent
HSBC failed to flag suspicious transactions potentially worth hundreds of millions of dollars for over a decade, according to reports.
Many of these transactions were linked to Raja Salameh, the brother of Lebanon’s former central bank governor, Riad Salameh.
Compliance officers raised concerns, yet HSBC staff still allowed Raja to bank with them, according to The National. The publication said internal documents show that bank officials “brushed aside” red flags about a lack of transaction details. Instead, they accepted assurances from Raja’s representative, who vouched for his integrity.
HSBC declined to comment when contacted by AML Intelligence.
Legal case
Raja Salameh now faces charges of helping embezzle $330 million in public funds through the Forry case. Lebanese and European prosecutors say Forry Associates, a shell company he controlled, funneled money from Banque du Liban (BDL) between 2002 and 2015. They uncovered how the scheme operated inside the central bank and who benefited from it.
Now, authorities are focusing on those who may have enabled the operation. Among them are international banks that overlooked financial irregularities while profiting from Lebanon’s financial system.
In March, Swiss NGO Public Eye said that HSBC’s weak anti-money laundering controls let Forry’s account process hundreds of millions of dollars. The funds allegedly financed luxury properties for Riad Salameh and his associates. According to Public Eye, HSBC’s failure highlights broader flaws in Switzerland’s anti-money laundering system, which relies on financial firms to report suspicious activity.
Documents reviewed by The National suggest that a senior HSBC manager’s influence allowed questionable transactions to continue. This reportedly undermined internal controls despite clear warning signs.
Key findings:
- Sobhi Tabbara, Raja Salameh’s relationship manager and long-time acquaintance, repeatedly assured HSBC that Forry was a legitimate brokerage firm. However, investigators later found that Forry had no employees and provided no services to BDL.
- HSBC relied on a 2009 document from BDL to justify keeping the account open. However, investigators later confirmed that the BDL board never approved the contract. Instead, officials handled it in complete secrecy.
- Tabbara claimed Forry’s commissions funded Raja Salameh’s real estate purchases. Yet, a 2015 HSBC review failed to confirm Raja as the account’s beneficial owner. Later, authorities traced the funds to an international money laundering network linked to Riad Salameh’s property empire.
- HSBC compliance officers failed to challenge decisions that kept Forry’s account open. Meanwhile, Tabbara repeatedly pushed to maintain the relationship.
Public Eye said the case “highlights the flaws” in the Swiss anti-money-laundering system.
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