Six months after Banque du Liban announced it was taking Lebanon’s banks, and a list of defendants that includes its own former governor, to court, the central bank has filed its second lawsuit.
“Our position is clear. We are very serious about these investigations,” Badih Moukarzel, Banque du Liban’s lead counsel in the cases, told Daraj in an interview last week.
Moukarzel presents Lebanon’s financial collapse as a shared responsibility between three actors: the state (through the finance ministry), the central bank, and the commercial banks. Yet in his framing, this does not translate into an immediate demand that the state foot the bill. Instead, he is clear that the banks must be the first to pay.
BDL, he said, is taking the investigations very seriously and will follow the leads to determine responsibilities. “Those who committed financial crimes have to be investigated, and if they are found guilty, they must be tried.”
“I don’t see how we can rebuild trust without doing this,” he said.
Asked whether he expects the cases to end, as so much in Lebanon often does, in quiet financial settlements, his answer was categorical: settlements are not part of the process. If they become possible down the line, it will only be after indictment and conviction.
“The banks have to pay back. Money has to be returned, we are talking billions of dollars.”
It is an argument many Lebanese depositors have waited years to hear from the institution at the center of the collapse.
But it is also an argument coming from that very institution.
Banque du Liban is not an outside observer trying to repair someone else’s damage. It was one of the main actors in the system that produced the losses now being investigated. The governor of 30 years, the longest uninterrupted tenure of any central bank governor in the world, is himself being sued.
That is why the lawsuits matter, and why they cannot, on their own, restore trust.
The question is not whether BDL has started moving; it has. It is whether, this time, the process reaches the end. A rot that goes back decades
The wrongdoing at Banque du Liban did not begin with the 2019 collapse, nor even with the financial engineering years. Warning signs existed much earlier.
The Bank al-Madina scandal in 2003 had already exposed the dangerous overlap between banking, money laundering, political protection, and failed supervision.
The bank was accused of laundering money for Iraqi officials under the oil-for-food program, serving as the bank of choice for a Hezbollah-linked arms dealer who once deposited 160 million dollars in cash, and channeling funds to Syrian officials and their Lebanese allies, a story documented, among other places, by the Wall Street Journal.
Two mid-level bank officials were jailed. Rana Koleilat, the executive at the center of the scandal, was released on bail in circumstances never explained, left the country, and was never brought back to face justice.
The rest of the case was left to fade.
That impunity is the precedent against which today’s lawsuits will be measured.
Lawyer Karim Daher, in an interview with “Daraj,” argues that although the measures taken by the Central Bank are promising and that “it is better to come late than never,” he insists on the need not to forget how the story began. In his view, events did not start from the completion of the forensic audit undertaken by Alvarez & Marsal, which showed that a large part of the facts remained concealed because the governor of the Banque du Liban, Riad Salameh, did not cooperate for several reasons, foremost among them his insistence on banking secrecy.
Daher says: “We should not forget that the launch of these cases happened thanks to foreign courts, not Lebanese ones, and this opens our eyes today to the extent of the failure of all authorities in Lebanon to carry out their duties. We should also not celebrate too much today… It is an important step, but we are very late; six or seven years have passed. Had measures not been taken in France, Luxembourg, and Switzerland, and had all these details related to the accounts—not limited to the company ‘Forry’…—not been uncovered, we would not be here. We need to know what comes after ‘Forry’: 66 companies linked to the office and to Riad Salameh’s companies, which were funneling Banque du Liban’s funds to the Champs-Élysées, were exposed. This made it possible to uncover facts, accounts, and transfers… and to reveal the relationship between Bank Audi, Riad Salameh, and M1, the company of Prime Minister Najib Mikati and his brother… We should also not forget that the HSBC file showed how things began to repeat themselves, triggered by what happened abroad.”
Daher believes that “today we are working piece by piece, in a fragmented way.” He wonders whether the measures taken by the Banque du Liban are discretionary steps, whether the bank has in fact begun to follow a path of entering specific files, or whether these moves fall within a comprehensive and integrated strategy to open all files, regardless of their nature or of the identity of the individuals involved.
Following the money
Filed last January, BDL’s first case targeted former governor Riad Salameh and Bank Audi’s former chairman Samir Hanna — who stepped down from the bank’s board that same month, according to Bank Audi’s own governance disclosures.
The two men’s entanglement long predates the lawsuit.
A 2020 investigation by Daraj and OCCRP revealed how an offshore company linked to Salameh sold shares in a London wealth-management firm — where his son Nady worked and held shares — to subsidiaries of Bank Audi, the very bank he regulated.
This happened during the same period when Salameh’s financial engineering operations delivered Bank Audi the largest windfall in the sector: some 1.6 billion dollars in 2016 alone, according to Lebanon’s Banking Control Commission.
This time, the case targets BankMed, its former director Mohammad Hariri, and Alaa Khawaja, the “mysterious billionaire” whose acquisition of Ayman Hariri’s shares in the bank’s holding company was documented by Daraj in 2023.
The acquisition was financed through a Bank Audi loan that Daraj’s reporting suggests may itself have been quietly backed by central bank funds. Bank Med did not respond to Daraj’s questions before publication.
The banks will argue, and already have, that they were operating within a system designed and approved by Banque du Liban itself.
That argument cannot simply be dismissed. The financial engineering schemes did not happen outside the central bank. They were central bank policies.
But legality and responsibility are not the same thing, and that distinction is exactly what investigators are now pursuing.
The issue is whether certain institutions and individuals merely participated in a failing system, or whether they received preferential treatment, concealed conflicts of interest, or personally benefited from arrangements that crossed legal lines.
There is also a distinction that the Lebanese public should not be asked to forget.
Since 2019, Lebanon’s banks have withheld depositors’ money without any capital control law authorizing them to do so. As legal experts have long argued, a bank that fails to pay its depositors is insolvent under Lebanese law, and insolvency should have led to liquidation. Depositors would have taken losses, but through a legal process, with assets sold and accounts settled. Instead, the losses were imposed informally and indefinitely, falling solely on the depositors, while the banks’ shareholders continued to make profits.
Within that shared failure, degrees matter. Daraj recently revealed that Blom Bank’s family shareholders distributed profits through Luxembourg while depositors in Lebanon went unpaid. The bank’s representatives did not deny or dispute the findings, but insisted on a distinction of their own: that Blom is “a good bank,” unlike the others. It is a distinction that holds only up to a point. Distributing profits while withholding deposits is a shared sin of the sector. But it is not of the same order as the alleged crimes Bank Audi and BankMed are accused of: abuse of power, conflict of interest, illicit enrichment, and money laundering.
On the restoration of funds, Moukarzel sounded confident, while admitting that some tracks may move faster than others. The HSBC case, he said, is on track.
HSBC is not a Lebanese bank and never withheld Lebanese depositors’ money; its alleged role was as a channel for funds embezzled from Banque du Liban through the Forry Associates case. French investigating judges have charged HSBC Private Bank Suisse and ordered the bank to “post an €80 million bail in connection with an embezzlement and money laundering investigation involving former Lebanese Central Bank Governor Riad Salameh”. Moukarzel said the money automatically returns to the central bank’s vaults.
Sources in both Lebanon and Paris confirm to Daraj that extensive meetings have taken place between BDL leadership and the French financial prosecutor. According to sources familiar with the proceedings, a settlement with Banque du Liban is considered the most likely outcome: a foreign bank returning funds to the Lebanese state, rather than a Lebanese bank buying its way out of accountability.
Daraj was the first to reveal key elements behind all three files: the BankMed–Khawaja transaction, Bank Audi’s billions from BDL’s financial engineering, and, in the Liechtenstein file, the first mention of the deal between Salameh and Mikati conducted through Bank Audi.
The cash economy, and the file with no financial ID
The other major risk on the regulator’s desk, according to Moukarzel, is Lebanon’s expanding cash economy.
Most money-transfer companies are expected to receive new regulations within weeks, he said, and those that fail to comply will face restrictions.
“Companies like Whish, Western Union, and others will have to live by tough diligence, or else we will have to close their offices,” Moukarzel said.
Al-Qard Al-Hassan is more complicated.
Founded in 1983 and registered as an NGO, Hezbollah’s lending arm has grown over four decades into the country’s largest unlicensed lender, extending loans, mostly against gold deposits, through branches across Lebanon.
Banque du Liban does not license it, and therefore does not fall under the central bank’s current authority.
“There’s no financial ID for Al-Qard Al-Hassan,” Moukarzel said.
Before BDL can regulate it, the government has to decide how to address an institution that has for years operated like a bank, taking funds and extending loans, while remaining outside the banking system.
BDL has already pulled the one lever it does hold: in July 2025, it banned all licensed banks and financial institutions from dealing with Al-Qard Al-Hassan, the first time the central bank had formally targeted the organization.
A conversation between the central bank and Hezbollah is nonetheless underway. In theory, Al-Qard Al-Hassan could be regularized as a licensed financial institution, with a financial ID, regulated like any other. But any attempt to bring it into the formal financial system would require fundamental changes to the legal structure, ownership, governance, board composition, and compliance.
“It is not easy, but it is not impossible to regulate,” Moukarzel said. “What is impossible is that an unregulated organization continues to receive funding from the IRGC.”
The file became even heavier last month, when the Terrorist Financing Targeting Center, the United States, and the six Gulf states acting jointly, designated Al-Qard Al-Hassan, Bayt Al-Mal, three other Hezbollah-linked entities, and sixteen officials.
This was not simply another American sanction. It turned pressure on Hezbollah’s financial network from a largely US-led effort into a regional one.
For a Lebanese financial sector dependent on Gulf relationships, that difference matters.
How the banks are fighting back
The banks, predictably, are trying once again to find the exit.
In Beirut, multiple unconnected sources confirmed to Daraj that Bank Audi tried to settle. That track did not go far.
Meanwhile, out of fear that a settlement could yet again throw the whole case under the rug, the Depositors’ Union, alongside MPs Halima Kaakour, Mark Daou and Yassin Yassin, filed a direct civil complaint with the financial public prosecutor.
The civil complaint came under pressure of its own. Multiple sources told Daraj that former minister Camille Abou Suleiman, who, as Bank Audi’s lawyer, engineered the deal that benefited Riad Salameh, Bank Audi, and former Prime Minister Najib Mikati, has been working to keep his own name out of the lawsuit, using carrot and stick: promises of cooperation and information on one hand, threats of litigation on the other. He threatened the Depositors’ Union with a defamation lawsuit in the United States worth 100 million US dollars. Daraj has sent Abou Suleiman a request for comment. He did not respond before publication.
In this context, Daher notes that the anti-money laundering law contains provisions that not only concern the main perpetrator but also cover anyone who facilitated or carried out the operation. All such persons fall under Law No. 44. This law stipulates that anyone who participates in or facilitates a money‑laundering transaction, including lawyers, trustees, auditors, and others, is subject to the same punishment imposed on the money launderer. In other words, we are talking about a prison sentence of no less than three years, in addition to an obligation to return twice the amount that was dissipated, which reveals how wide the network has become today.
In Paris, Audi France appears to be maneuvering to avoid payment. On April 30, 2026, the bank’s board met at its headquarters on Avenue des Champs-Élysées, under the presidency of Sherine Audi. On the agenda: shareholder dividends over the last three years, and a resolution appointing Khalil El Debs, the Group CEO of Bank Audi and the son-in-law of Samir Hanna, the former chairman targeted by BDL’s first lawsuit, as administrator in place of Bank Audi, the corporate entity that had held the seat and resigned. A document Daraj obtained from sources it will not name shows the bank has been making profits, some 60 million euros, that were not sent to Beirut, where they could have gone toward paying depositors.
In Washington, the effort has taken another form.
For years, Washington’s approach to Lebanon’s financial sector was shaped by a difficult calculation: a flawed system was still a system it understood and could work with. As one senior American diplomat once explained, when asked why Washington continued to deal with Riad Salameh despite growing concerns, he was the person they knew, the interlocutor they understood. “He speaks our language,” the diplomat said.
The team around Antoun Sehnaoui, chairman of SGBL (Société Générale de Banque au Liban), is betting that logic still holds. It has tried to persuade the Trump administration to separate the question of financial reform from the question of Hezbollah’s disarmament, to keep the focus on the weapons and away from the banks.
It hasn’t worked. Pressure from the Treasury has continued, and so have the sanctions, driven by a conviction in Washington that Lebanon’s previous financial structure served as a main pillar of revenue for the Iran track, inseparable from the financial purge underway in Iraq. The compromises once made in the name of stability are now viewed as part of the problem.
It is not a difficult argument to make when Sehnaoui himself is being sued in New York over alleged links to Hezbollah.
Why is the Banque du Liban acting instead of the Lebanese state?
Daher questions why the Banque du Liban is the party driving these measures, rather than a judicial body under the Ministry of Justice. He argues that there are currently two actors racing to capture the huge sums that will result from these cases, and that the available information now suggests the amounts at stake are substantial—raising a fundamental question: which party will actually recover these funds? In his words, “the interests of the Banque du Liban and those of the Lebanese state are not merely intertwined, but in conflict.”
As for the Lebanese state, if it is genuinely concerned with recovering the funds, the legal mechanism for doing so rests on Law No. 44 of 2015 on combating money laundering and the financing of terrorism, which requires that individuals be punished with prison sentences ranging from roughly three to seven years, in addition to fines of up to twice the amount involved in the crime. The law also enshrines the principle that funds derived from embezzlement or corruption must go to the state treasury, not to the Banque du Liban, which, according to Daher, explains why the central bank is now rushing to take pre‑emptive action.
For this reason, the central bank seeks to position itself as the entity that ultimately recovers these funds, so that it can use them to meet its own obligations, especially those tied to repaying deposits. The state, for its part, as Daher explains, needs these funds to pay its financial dues and to finance reconstruction in the south, along with other urgent public obligations.
What does Washington’s framework actually say?
The trilateral framework signed in Washington on June 26 by Lebanon, Israel, and the United States remains primarily a security agreement.
But it is not silent on money. The text commits Lebanon and the United States to preventing funds from flowing to any entity or individual affiliated with non-state armed groups, and Lebanon explicitly commits to keeping reconstruction funds out of their hands.
Reading alongside the recent financial sanctions and the support extended to Banque du Liban’s efforts to restore financial oversight, it suggests a broader US strategy: one that increasingly links security with rebuilding Lebanese state institutions.
Whether this amounts to a long-term commitment to comprehensive economic reform remains uncertain.
But it is a noticeable shift from a predominantly military focus toward a more institutional one.
In public opinion, everyone is guilty until proven innocent
The Lebanese have been let down too many times to greet lawsuits with faith.
They watched Bank al-Madina disappear into the drawers of the justice system.
They watched institutions created to supervise the banking sector fail to ask the necessary questions.
They watched banking secrecy lifted on paper while accountability remained out of reach.
When Daraj put that to Moukarzel, that after watching maneuvers in this country that outdo fiction, we will believe it only when we see people tried and condemned, and that until then, in public opinion, everyone is guilty until proven innocent, his answer was simple.
“That’s fair,” he said. “Time will tell.”
The long-awaited process has started. What matters is how it ends. “In this phase, all we can do is hope that the judiciary will stand above all suspicion and will manage this case with integrity and impartiality, free from any interference,” Daher says.
