Revealed: The inside story of Optimum - the alleged $42m Riad Salameh slush fund


Nada Maucourant Atallah
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The Salameh Papers: Full coverage here

The Lebanese judiciary's decision to press charges against former central bank chief Riad Salameh, after a hearing related to the alleged embezzlement of millions of dollars of public funds, caught many off guard.

Images of the man once celebrated as the architect of Lebanon's financial system – which eventually collapsed – escorted by security guards on his way to detention, have stunned the country, as Mr Salameh had long seemed untouchable.

Since 2021, despite mounting local and international legal challenges – including allegations of embezzlement, asset freezes worldwide, several corruption investigations, and an international arrest warrant – his life in Lebanon appeared largely unaffected.

A previous investigation in Lebanon into Mr Salameh's alleged embezzlement at the central bank has been stalled for years, as political factors heavily influence all areas of the country's affairs.

The case that seems to have disrupted the status quo is known as the Optimum case, in reference to Optimum Invest SA, a Lebanon brokerage firm with which the Banque du Liban (BDL) allegedly engaged in shady deals from 2015 to 2018, in an alleged fraud scheme involving embezzlement and manipulation of financial statements.

Mr Salameh, whose term as the BDL governor ended in July 2023, has repeatedly denied the accusations.

"Riad Salameh has always been at the disposal of Lebanese justice. He therefore responded to the summons from the Beirut public prosecutor, just as he had previously responded to all summonses from Lebanese magistrates," his Paris-based lawyer, Pierre-Olivier Sur, told The National on Thursday.

If Optimum is now making headlines, insiders have been aware of blatant irregularities since at least 2015.

Based on leaked documents, exclusive interviews and expert analysis, The National explores the latest scandal at Lebanon's central bank – yet another piece of the puzzle in he country's financial crisis. It is one of the largest collapses in recent history, and is marked by the local currency losing 95 per cent of its value and a large number of Lebanese plunging into poverty.

Slush fund

The Lebanese investigation focuses on BDL and Optimum's dealings between 2015 and 2018. Over those three years, Mr Salameh, in his capacity as central bank governor, and Optimum’s chairman, Antoine Salame, a distant relative who has since left the company, signed 45 contracts, all seen by The National.

These transactions generated about $8 billion, about 15 per cent of the country's gross domestic product, resulting in a massive financial scheme that experts have described as an accounting trick to hide financial losses.

Lebanese protesters burn images of former central bank governor Riad Salameh. EPA
Lebanese protesters burn images of former central bank governor Riad Salameh. EPA

The investigation into Optimum started in Lebanon after revelations from BDL's forensic audit, released by consulting firm Alvarez & Marsal (A&M) in 2023, showed at least $111 million of the total amount was siphoned off as shady disbursement to undisclosed third parties.

The international auditors discovered that the funds generated were channelled into the same consulting account under investigation in Europe for having served as a multimillion-dollar slush fund for Mr Salameh and his family in a prior alleged embezzlement scheme.

The Lebanese judiciary is currently investigating Mr Salameh for the alleged embezzlement of $42 million. It is unclear why the investigation is focusing on only a part of the amount flagged by A&M.

The beneficiaries of these commissions are also under investigation, although their identities are not publicly known. Sources at the BDL told The National that the financial details from the account where the commissions were deposited have been provided to judicial authorities.

'Fake' gains

The entire financial arrangement between Optimum and BDL, which allegedly facilitated the embezzlement of tens of millions of dollars under investigation, has been described as “fraudulent” by financial experts familiar with the case.

Those experts have called the 45 contracts “sham” transactions, creating $8 billion in fake gains to cover losses from unsustainable monetary policies by listing future interest payments as assets – without any real economic value. They were initially uncovered in a confidential audit by the international forensic audit firm Kroll, which was leaked last March.

According to the audit, BDL would lend Optimum money to buy the bonds, and BDL would immediately buy them back at a substantial premium equal to the future interest payments on the bonds. The premium would then be returned to BDL as a commission.

Mr Salameh said the operations with Optimum were in line with the institution's accounting framework. “The income from these operations was not booked as profit but revenue against postponed losses in accordance with the financial chart of BDL,” he said in a July email to The National.

BDL relies on its accounting standards, which diverge from International Financial Reporting Standards. A&M had previously criticised BDL's “non-traditional” accounting standards in its audit for lacking transparency.

“This is a classic accounting scheme,” financial analyst Mike Azar told The National.

The entire financial arrangement between Optimum and BDL, which allegedly facilitated the embezzlement of tens of millions of dollars under investigation, has been described as 'fraudulent' by financial experts familiar with the case. AP
The entire financial arrangement between Optimum and BDL, which allegedly facilitated the embezzlement of tens of millions of dollars under investigation, has been described as 'fraudulent' by financial experts familiar with the case. AP

“If I sell you a product for $100 and buy it back for $150, that doesn't increase its value to $150. If you return the $50 difference to me, that doesn't make the $50 a profit. All it did was move my own money in a circle for the express purpose of concealing my financial situation by creating fake profits while paying commissions, in this case allegedly to Optimum and other unknown beneficiaries,” Mr Azar said.

Mr Salameh did not comment on the embezzlement allegations about Optimum's commission in his July email to The National. Optimum claims it was unaware of the alleged scheme because it did not ask about it.

The transactions were “unusual”, Kroll auditors said. Still, because Mr Salameh was “highly respected at the time” Optimum's former management said it “did not comprehend questioning its requests and was proud to act on the BDL's behalf”.

“We would like to reiterate that all dealings between Optimum Invest and Banque du Liban were conducted in full compliance with applicable laws and regulation,” Optimum stressed on its website.

'Unscrutinised' management

The dealings between BDL and Optimum appear to have been kept secret from the BDL oversight board. Mr Salameh's management of the BDL has been described as “personalised” and “unscrutinised” in the BDL forensic audit.

Four members of the Central Council told The National at the time that operations with Optimum were never mentioned during meetings of the board, composed of the governor, the four deputy governors and the directors general of the Ministries of Economy and Trade, and Finance.

The fifth member did not respond to The National's request for comment. The sixth member is deceased.

“There has never been any mention of Optimum and we have never seen the contracts,” Alain Bifani, former director general of the Lebanese Ministry of Finance, told The National.

Contracts seen by The National show the BDL board authorised the transactions, referencing various board meetings. However, The National accessed the agendas from these meetings, dated from 2014 to 2016, and found no mention of Optimum.

Buried case

The first time Optimum came under scrutiny was in 2015, when an audit by the Capital Markets Authority (CMA) flagged "extravagant" transactions and unusually high commissions between Optimum and the banking sector. Due to its sensitivity, its findings were kept secret for eight years by the CMA board, led by Mr Salameh.

The CMA recommended barring Optimum's managers from the industry, but nothing happened. Instead, that same year BDL started dealing with the broker, and the contracts continued.

The Optimum arrangement began around the same time the central bank ceased working with Forry Associates Ltd, another brokerage company under international scrutiny and suspected of being a shell company used by Mr Salameh to siphon off funds.

While the allegations against both brokers involve embezzlement through shady transactions and commissions, Optimum, unlike Forry, was not a shell company. It had clients and is still in operation. In June 2020, it was acquired by LIBANK SAL (Levant Investment Bank SAL).

Four members of the Central Council told The National that operations with Optimum were never mentioned during board meetings. EPA
Four members of the Central Council told The National that operations with Optimum were never mentioned during board meetings. EPA

Over the past year and a half, leaks of confidential documents and the publication of the forensic audit have led to the opening of two judicial cases into Optimum in Lebanon. According to Lebanese lawyer Karim Daher, the case began to gain momentum due to the increased scrutiny. But he remains cautious.

“This could all be an attempt by the political class to shift the blame to Riad Salameh, who is already lost, as part of a broader package deal with the international community,” he said. “The question is whether he will accept that he is solely responsible for the disaster of the century or if he will drag others down with him.”

The move also comes amid rising speculation that Lebanon could be added to the Financial Action Task Force (FATF) grey list for countries at increased risk of money laundering. “These are entirely separate issues,” a foreign diplomatic source told The National. “Mr Salameh's arrest would not, in any way, impact the FATF's process.”

MOUNTAINHEAD REVIEW

Starring: Ramy Youssef, Steve Carell, Jason Schwartzman

Director: Jesse Armstrong

Rating: 3.5/5

Surianah's top five jazz artists

Billie Holliday: for the burn and also the way she told stories.  

Thelonius Monk: for his earnestness.

Duke Ellington: for his edge and spirituality.

Louis Armstrong: his legacy is undeniable. He is considered as one of the most revolutionary and influential musicians.

Terence Blanchard: very political - a lot of jazz musicians are making protest music right now.

War and the virus
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The biog

Favourite books: 'Ruth Bader Ginsburg: A Life' by Jane D. Mathews and ‘The Moment of Lift’ by Melinda Gates

Favourite travel destination: Greece, a blend of ancient history and captivating nature. It always has given me a sense of joy, endless possibilities, positive energy and wonderful people that make you feel at home.

Favourite pastime: travelling and experiencing different cultures across the globe.

Favourite quote: “In the future, there will be no female leaders. There will just be leaders” - Sheryl Sandberg, COO of Facebook.

Favourite Movie: Mona Lisa Smile 

Favourite Author: Kahlil Gibran

Favourite Artist: Meryl Streep

The years Ramadan fell in May

1987

1954

1921

1888

Fixtures

Tuesday - 5.15pm: Team Lebanon v Alger Corsaires; 8.30pm: Abu Dhabi Storms v Pharaohs

Wednesday - 5.15pm: Pharaohs v Carthage Eagles; 8.30pm: Alger Corsaires v Abu Dhabi Storms

Thursday - 4.30pm: Team Lebanon v Pharaohs; 7.30pm: Abu Dhabi Storms v Carthage Eagles

Friday - 4.30pm: Pharaohs v Alger Corsaires; 7.30pm: Carthage Eagles v Team Lebanon

Saturday - 4.30pm: Carthage Eagles v Alger Corsaires; 7.30pm: Abu Dhabi Storms v Team Lebanon

The years Ramadan fell in May

1987

1954

1921

1888

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Director: Lana Wachowski

Stars:  Keanu Reeves, Carrie-Anne Moss, Jessica Henwick 

Rating:****

Know your camel milk:
Flavour: Similar to goat’s milk, although less pungent. Vaguely sweet with a subtle, salty aftertaste.
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Results
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The specs
Engine: 77.4kW all-wheel-drive dual motor
Power: 320bhp
Torque: 605Nm
Transmission: Single-speed automatic
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The five pillars of Islam

1. Fasting 

2. Prayer 

3. Hajj 

4. Shahada 

5. Zakat 

Heavily-sugared soft drinks slip through the tax net

Some popular drinks with high levels of sugar and caffeine have slipped through the fizz drink tax loophole, as they are not carbonated or classed as an energy drink.

Arizona Iced Tea with lemon is one of those beverages, with one 240 millilitre serving offering up 23 grams of sugar - about six teaspoons.

A 680ml can of Arizona Iced Tea costs just Dh6.

Most sports drinks sold in supermarkets were found to contain, on average, five teaspoons of sugar in a 500ml bottle.

The five pillars of Islam

1. Fasting

2. Prayer

3. Hajj

4. Shahada

5. Zakat 

Key facilities
  • Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
  • Premier League-standard football pitch
  • 400m Olympic running track
  • NBA-spec basketball court with auditorium
  • 600-seat auditorium
  • Spaces for historical and cultural exploration
  • An elevated football field that doubles as a helipad
  • Specialist robotics and science laboratories
  • AR and VR-enabled learning centres
  • Disruption Lab and Research Centre for developing entrepreneurial skills
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2025 Fifa Club World Cup groups

Group A: Palmeiras, Porto, Al Ahly, Inter Miami.

Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.

Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.

Group D: Flamengo, ES Tunis, Chelsea, Leon.

Group E: River Plate, Urawa, Monterrey, Inter Milan.

Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.

Group G: Manchester City, Wydad, Al Ain, Juventus.

Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.

The specs

Engine: 4 liquid-cooled permanent magnet synchronous electric motors placed at each wheel

Battery: Rimac 120kWh Lithium Nickel Manganese Cobalt Oxide (LiNiMnCoO2) chemistry

Power: 1877bhp

Torque: 2300Nm

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The five pillars of Islam
The burning issue

The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE. 

Read part four: an affection for classic cars lives on

Read part three: the age of the electric vehicle begins

Read part two: how climate change drove the race for an alternative 

2025 Fifa Club World Cup groups

Group A: Palmeiras, Porto, Al Ahly, Inter Miami.

Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.

Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.

Group D: Flamengo, ES Tunis, Chelsea, (Leon banned).

Group E: River Plate, Urawa, Monterrey, Inter Milan.

Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.

Group G: Manchester City, Wydad, Al Ain, Juventus.

Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.

The burning issue

The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE. 

Read part four: an affection for classic cars lives on

Read part three: the age of the electric vehicle begins

Read part one: how cars came to the UAE

 

Day 5, Abu Dhabi Test: At a glance

Moment of the day When Dilruwan Perera dismissed Yasir Shah to end Pakistan’s limp resistance, the Sri Lankans charged around the field with the fevered delirium of a side not used to winning. Trouble was, they had not. The delivery was deemed a no ball. Sri Lanka had a nervy wait, but it was merely a stay of execution for the beleaguered hosts.

Stat of the day – 5 Pakistan have lost all 10 wickets on the fifth day of a Test five times since the start of 2016. It is an alarming departure for a side who had apparently erased regular collapses from their resume. “The only thing I can say, it’s not a mitigating excuse at all, but that’s a young batting line up, obviously trying to find their way,” said Mickey Arthur, Pakistan’s coach.

The verdict Test matches in the UAE are known for speeding up on the last two days, but this was extreme. The first two innings of this Test took 11 sessions to complete. The remaining two were done in less than four. The nature of Pakistan’s capitulation at the end showed just how difficult the transition is going to be in the post Misbah-ul-Haq era.

Lexus LX700h specs

Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor

Power: 464hp at 5,200rpm

Torque: 790Nm from 2,000-3,600rpm

Transmission: 10-speed auto

Fuel consumption: 11.7L/100km

On sale: Now

Price: From Dh590,000

'C'mon C'mon'

Director:Mike Mills

Stars:Joaquin Phoenix, Gaby Hoffmann, Woody Norman

Rating: 4/5

UAE currency: the story behind the money in your pockets
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MATCH INFO

Europa League semi-final, second leg
Atletico Madrid (1) v Arsenal (1)

Where: Wanda Metropolitano
When: Thursday, May 3
Live: On BeIN Sports HD

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Company%20Profile
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Jawan
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Porsche Taycan Turbo specs

Engine: Two permanent-magnet synchronous AC motors

Transmission: two-speed

Power: 671hp

Torque: 1050Nm

Range: 450km

Price: Dh601,800

On sale: now

The years Ramadan fell in May

1987

1954

1921

1888

Volvo ES90 Specs

Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)

Power: 333hp, 449hp, 680hp

Torque: 480Nm, 670Nm, 870Nm

On sale: Later in 2025 or early 2026, depending on region

Price: Exact regional pricing TBA

MISSION: IMPOSSIBLE – FINAL RECKONING

Director: Christopher McQuarrie

Starring: Tom Cruise, Hayley Atwell, Simon Pegg

Rating: 4/5

DEADPOOL & WOLVERINE

Starring: Ryan Reynolds, Hugh Jackman, Emma Corrin

Director: Shawn Levy

Rating: 3/5

The biog

Family: wife, four children, 11 grandchildren, 16 great-grandchildren

Reads: Newspapers, historical, religious books and biographies

Education: High school in Thatta, a city now in Pakistan

Regrets: Not completing college in Karachi when universities were shut down following protests by freedom fighters for the British to quit India 

 

Happiness: Work on creative ideas, you will also need ideals to make people happy

EMERGENCY PHONE NUMBERS

Estijaba – 8001717 –  number to call to request coronavirus testing

Ministry of Health and Prevention – 80011111

Dubai Health Authority – 800342 – The number to book a free video or voice consultation with a doctor or connect to a local health centre

Emirates airline – 600555555

Etihad Airways – 600555666

Ambulance – 998

Knowledge and Human Development Authority – 8005432 ext. 4 for Covid-19 queries

Engine: 3.5-litre V6

Transmission: eight-speed automatic

Power: 290hp

Torque: 340Nm

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Blackpink World Tour [Born Pink] In Cinemas

Starring: Rose, Jisoo, Jennie, Lisa

Directors: Min Geun, Oh Yoon-Dong

Rating: 3/5

RESULTS
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Mica

Director: Ismael Ferroukhi

Stars: Zakaria Inan, Sabrina Ouazani

3 stars

Essentials

The flights
Whether you trek after mountain gorillas in Rwanda, Uganda or the Congo, the most convenient international airport is in Rwanda’s capital city, Kigali. There are direct flights from Dubai a couple of days a week with RwandAir. Otherwise, an indirect route is available via Nairobi with Kenya Airways. Flydubai flies to Kinshasa in the Democratic Republic of Congo, via Entebbe in Uganda. Expect to pay from US$350 (Dh1,286) return, including taxes.
The tours
Superb ape-watching tours that take in all three gorilla countries mentioned above are run by Natural World Safaris. In September, the company will be operating a unique Ugandan ape safari guided by well-known primatologist Ben Garrod.
In the Democratic Republic of Congo, local operator Kivu Travel can organise pretty much any kind of safari throughout the Virunga National Park and elsewhere in eastern Congo.

The Penguin

Starring: Colin Farrell, Cristin Milioti, Rhenzy Feliz

Creator: Lauren LeFranc

Rating: 4/5

Updated: October 07, 2024, 10:48 AM`