HSBC Under Fire for Failing to Flag Suspicious Transactions Linked to Lebanese Embezzlement Case

HSBC failed to flag suspicious transactions potentially worth hundreds of millions of dollars over more than a decade, according to new reporting. Internal documents reportedly reveal that many of these transactions were tied to Raja Salameh, the brother of Lebanon’s former central bank governor, Riad Salameh.

Despite repeated concerns raised by compliance officers, HSBC staff continued to allow Raja Salameh to bank with them. According to The National, internal communications show bank officials “brushed aside” red flags about the lack of transaction details and instead accepted assurances from Raja’s representative, who vouched for his integrity.

When contacted, HSBC declined to comment.

Raja Salameh now faces criminal charges in connection with the Forry case, in which he is accused of helping embezzle $330 million in public funds. Lebanese and European prosecutors allege that Forry Associates, a shell company under Raja’s control, channeled vast sums from Banque du Liban (BDL) between 2002 and 2015. Investigators say they have uncovered how the scheme operated within Lebanon’s central bank, as well as who profited from it.

Authorities are now scrutinizing those who may have enabled the operation — including international banks that failed to act on clear financial irregularities while benefiting from Lebanon’s unstable but profitable financial system.

Swiss NGO Public Eye stated that HSBC’s weak anti-money laundering controls enabled Forry’s account to process hundreds of millions of dollars. The money, according to the NGO, helped finance luxury real estate for Riad Salameh and his associates. Public Eye said the case “highlights the flaws” in the Swiss anti-money laundering system, which relies heavily on financial institutions to report suspicious activity.

Documents reviewed by The National suggest that the influence of a senior HSBC manager helped facilitate these questionable transactions by undermining internal controls, despite visible warning signs.

One key figure in this case is Sobhi Tabbara, Raja Salameh’s relationship manager at HSBC and a long-time acquaintance. Tabbara repeatedly assured the bank that Forry was a legitimate brokerage firm. However, investigators later discovered that Forry had no employees and provided no services to BDL. Tabbara also claimed that the commissions earned by Forry were used by Raja Salameh to purchase real estate. But an HSBC review in 2015 failed to verify Raja as the account’s beneficial owner.

The bank reportedly relied on a 2009 document from BDL to justify keeping Forry’s account open. Yet investigators later found that the BDL board never approved the agreement with Forry. Instead, the arrangement was handled in total secrecy by select central bank officials.

Authorities have since traced the funds moving through Forry’s HSBC account to an international money laundering network that financed Riad Salameh’s extensive property empire. Despite all these signs, HSBC’s compliance officers failed to challenge the decisions that kept Forry’s account active, while Tabbara continued to advocate for the relationship.

This case, Public Eye stated, is a glaring example of how international banks’ failure to enforce robust anti-money laundering measures can allow illicit financial operations to flourish unchecked for years.

By fLEXI tEAM