Optimum Invest’s affair, a smoke-and-mirrors distraction from the much dirtier truth

A French connection at the root of Salameh arrest and laundering accusations

Over the past few years, Lebanon has been a nation beset by economic collapse, political instability, and financial mismanagement. One of the most notable figures at the center of this turmoil is former Central Bank’s Governor Riad Salemeh, the long-standing head of Lebanon’s Banque du Liban (BDL). The Lebanese judiciary’s decision to press charges against Salemeh, after a hearing related to the alleged embezzlement of millions of dollars of public funds, caught many off guard. 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 BDL allegedly engaged in shady deals from 2015 to 2018, in an alleged so called fraud scheme involving embezzlement and manipulation of financial statements. 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 dollars of the total amount was syphoned off as shady disbursement to undisclosed third parties.

While much focus has been placed on finding Optimum Invest SA deals and initiatives to rejuvenate Lebanon’s economy, there has been a glaring lack of scrutiny on the controversial financial dealings linked to Salameh.

The affair has become the perfect scapegoat, a smoke-and-mirrors distraction from the much larger, dirtier truth hiding in plain sight. Of course, the real story isn’t that Optimum Invest earned a couple of thousand dollars – no, it’s that we’ve all been swept into a tidal wave of outrage by an ambitious journalist who, armed with nothing but a Twitter account and a knack for sensationalism, managed to make this deal sound like the scandal of the century. Public opinion? Completely hijacked. While we tweet and retweet, the true masterminds behind Lebanon’s financial chaos are laughing, sipping cocktails, and watching from the sidelines as we chase after shadows.

Despite growing evidence of irregularities in his accounts, the Lebanese political elite and international actors seem reluctant to address this issue, shifting attention instead to investment solutions that offer short-term optimism but do little to address systemic corruption. While Optimum deals yielded relatively modest returns for their balance sheet, amounting to only a few thousand dollars, they played a crucial role in significantly enriching Salameh himself.

NOW Lebanon’s sources confirmed that Optimum Invest SA was chosen by Salemeh to do the dealings and swaps as it had this privilege to conduct the dealings in the Lebanese market. The press largely portrayed that they made 8 billion dollars in profits whereas those were the transactions recorded as a face lifting to the BDL balance sheet and for payment of dubious deals made by Salameh.

Reports suggest that Salemeh used these transactions to funnel large sums of money into personal accounts, often through offshore companies and hidden financial channels, far exceeding what Optimum Invest earned. The disparity between Optimum Invest’s earnings and Salemeh’s personal gains raises serious questions about the nature of these deals. While the former was seemingly conducting legitimate business, Salemeh allegedly manipulated these opportunities to accumulate vast personal wealth, reportedly totaling over 100 million dollars. This highlights a pattern of exploitation of Lebanon’s financial system by its elites, where those in positions of power have disproportionately benefited from deals that yielded little for other stakeholders. The modest gains for Optimum Invest stand in stark contrast to the massive fortunes Salemeh built during his time as BDL Governor, further underscoring the need for greater scrutiny and accountability regarding his financial dealings.

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).

To be noted that in 2012 the company upgraded its license to a full-fledged financial institution regulated by BDL with 5 million dollars in fully paid capital. Sources also disclosed that its former manager and owner Antoine Salameh joined Optimum Invest at its inspection, he has more than 20 years experience with Financial Markets, Midclear and Financial Markets. He is now working in London.

The public’s outrage has been skillfully manipulated, and instead of focusing on the dubious, multi-million-dollar accounts of central figures like Riad Salemeh, we’re caught up in a narrative about a company that made what amounts to pocket change in comparison. The real issue – how the Lebanese financial system was systematically drained by insiders – remains under-explored, as the focus shifts to stories that, while intriguing, miss the broader, more dangerous context. In a crisis of this scale, Optimum Invest is a drop in the ocean, yet it has been inflated into a controversy that overshadows far more sinister financial dealings. This is more than just a diversion; it’s a deliberate shift in narrative to protect the real beneficiaries of Lebanon’s financial ruin.

As Lebanon continues its economic freefall, much of the discourse has centered on strategies to attract investment. The International Monetary Fund (IMF), World Bank, and various global financial institutions have been keen to find ways to entice both domestic and international investors to inject capital into the ailing economy. Discussions of economic reform packages, infrastructure development projects, and high-profile investments in sectors like telecommunications and energy have dominated headlines. While these are indeed crucial to rebuilding Lebanon’s economy, the focus on such deals has largely ignored the elephant in the room: the opaque, unaccountable financial structure underpinning the entire economy. The discussions around investment deals often promise high returns for those involved but overlook the systemic risks. Lebanon’s banking sector, which collapsed under a multi-billion-dollar Ponzi-like scheme, continues to lose the trust of both local and foreign investors. Without restoring faith in financial governance, even the best investment deals are unlikely to have a lasting impact. Yet, this hasn’t stopped the relentless focus on these deals as the primary solution to Lebanon’s economic woes, with insufficient scrutiny of the individuals and institutions that have long mismanaged the nation’s wealth.

Reports from local and international media outlets, alongside judicial inquiries from European countries, have pointed to suspicious transactions involving his personal accounts and the accounts of companies closely linked to him. It is alleged that Salameh funneled large sums of money out of Lebanon, engaging in money laundering and illicit financial transfers. There are questions about how his personal wealth, which reportedly exceeds 100 million dollars, was accumulated during a period when Lebanon’s financial sector was on the brink of collapse. Moreover, his accounts allegedly hold links to offshore companies and secretive financial networks designed to evade scrutiny. Despite mounting evidence, meaningful accountability for Salameh remains elusive. Much of this is due to his deep-rooted connections with Lebanon’s political elite, many of whom have benefited from the same system of corruption and cronyism.

A previous investigation in Lebanon into Salameh’s alleged embezzlement at the Central Bank has been stalled for years, primarily due to the heavy influence of political factors that shape all aspects of the country’s affairs. International auditors discovered that funds generated through questionable activities were channeled into the same consulting account currently under scrutiny in Europe. This account is alleged to have served as a multimillion-dollar slush fund for Salameh and his family in a prior embezzlement scheme. The Lebanese judiciary is now investigating Salameh for the alleged embezzlement of 42 million dollars. However, it remains unclear why the investigation focuses on only a portion of the total amount flagged by international auditors Alvarez & Marsal (A&M). Despite this limitation, the probe into the beneficiaries of these commissions continues, although their identities have not been publicly disclosed. Sources from the Banque du Liban have confirmed that financial details from the account where the commissions were deposited have been provided to judicial authorities. Yet, with political interference and selective investigation methods, concerns persist over the extent to which the full picture of this embezzlement scheme will be uncovered.

Experts have labelled Optimum Invest SA-BDL 45 contracts as ‘sham’ transactions, claiming they generated 8 billion dollars in fake profits to mask losses from unsustainable monetary policies. Salemeh needed this face-lifting of BDL’s balance sheet to pursue his financial engineering scheme. These deals falsely listed future interest payments as assets without any actual economic value. The scheme was initially uncovered in a confidential audit conducted by international forensic firm Kroll, which was leaked in March 2024. 

According to the audit, the Banque du Liban (BDL) would lend money to Optimum Invest to purchase bonds and then immediately buy them back at a significant premium, equivalent to the future interest payments on those bonds. This premium was returned to BDL as a commission, completing a circular flow of funds. 

In defense of these operations, Salemeh claimed they adhered to the institution’s accounting framework. He explained that “the income from these operations was not booked as profit but rather as revenue against postponed losses, in accordance with BDL’s financial chart.” He made this statement in a July email to The Daily National, the newspaper reported. It is important to note that BDL’s accounting practices deviate from International Financial Reporting Standards (IFRS). International auditors Alvarez & Marsal (A&M) had previously criticized BDL’s ‘non-traditional’ accounting methods for their lack of transparency during their audit of the Central Bank’s finances.

The transactions were “unusual”, Kroll auditors said. Still, because Salemeh 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.

It first attracted attention in 2015 when a Capital Markets Authority (CMA) audit flagged ‘extravagant’ transactions and unusually high commissions between the brokerage and the banking sector. Due to the sensitivity of the findings, the CMA board, led by Riad Salameh, kept the report confidential for eight years. Despite the CMA’s recommendation to bar Optimum’s managers from the financial industry, no action was taken. In fact, that same year, the BDL began conducting business with Optimum, and the contracts continued. The Optimum deal emerged around the time BDL stopped working with Forry Associates Ltd, another brokerage under international scrutiny and suspected of being a shell company used by Mr. Salameh to syphon off funds.

Was Salameh arrested solely in the Optimum Invest SA case? Sources close to the judiciary told NOW Lebanon that the arrest was orchestrated in Beirut so that Salemeh was prevented from being prosecuted before a European court.

Earlier a team of European investigators presented simultaneous inquiries in France, Germany and Luxembourg into Salemeh’s financial and real estate dealings during his near 30-year reign at the helm of the Lebanese Central Bank, which culminated in the collapse of the country’s financial system.  While in Lebanon it is often said that the European files are devoid of any evidence that could condemn Salameh, our sources claim that public prosecutors in the countries investigating the alleged corruption have in fact established a ‘near complete’ file.

This includes the embezzlement of 326 million dollars, which the BDL transferred to accounts of the Swiss Forry company, owned by Riad Salameh’s brother Raja. These transfers first came to light in April 2021 following a legal request submitted by the Swiss attorney general in January of that same year.

Information from various sources now indicate that Forry transferred more than 207 million dollars to five Lebanese banks: BankMed, Credit Libanais, Audi, Saradar and Banque Misr Liban. The “mysterious transfers” are “pivotal” to the European investigations.

This contradicts Riad Salameh’s testimony before Lebanese Attorney General Jean Tannous on August 5, 2021, where he claimed that BDL funds transferred to Forry Associates were based on a “signed contract” for providing “financial services related to managing Lebanon’s foreign currency debt in exchange for a commission.” At that time, the Special Investigation Commission (SIC) did not respond, prompting Tannous to raid the banks. Prime Minister Najib Mikati intervened, threatening to resign or dismiss Lebanon’s Prosecutor General Ghassan Oweidat. Mikati even accused security forces supporting Tannous of doing “what Israel did not do.” As a result, the judicial process was abruptly halted, Tannous was restrained, and Forry’s commission records – shielded by banking secrecy and political influence – remained closed. 

It remains uncertain whether European investigators will gain access to the SIC files. The European investigations primarily focus on whether the funds Salameh used to purchase real estate worth over 120 million dollars in countries like Germany, Belgium, and Luxembourg can be considered ‘clean.’ These purchases are suspected to be part of a larger money laundering scheme, making it crucial to identify the beneficiaries of the transfers involving Forry Associates.

France’s role has been instrumental in applying international pressure on Lebanese authorities to address corruption and financial misconduct. NOW’s sources disclosed that French authorities have cooperated with Lebanese officials and international bodies to facilitate the investigation into Salameh’s financial dealings and has been involved in efforts to track and freeze assets allegedly linked to Salameh. This cooperation includes sharing intelligence and providing assistance in the investigation of financial transactions that span multiple jurisdictions. The French role was underlined by coordinating with Lebanese and other European legal systems. The source added that France has used its diplomatic influence to urge Lebanese authorities to take action against corruption and to ensure that high-profile cases, such as that of Salameh, are handled transparently and justly.

French officials, including members of the Foreign Ministry and the Finance Ministry, have expressed their commitment to supporting anti-corruption efforts in Lebanon. They have emphasized the importance of holding individuals accountable for financial misconduct, regardless of their position, the source said.

One of the key results of the Sherpa investigation was the tracing of Salameh’s assets across multiple jurisdictions, including France. This led to efforts to freeze and secure assets suspected to be acquired through corrupt practices.

On a related note William Bourdon, the founder of Sherpa, (a French anti-financial crime organization), that the trial of BDL’s Governor Riad Salameh, could commence as early as next year in Paris.

In May 2021, in collaboration with the Collective Association of Victims of Fraudulent and Criminal Practices in Lebanon, Sherpa lodged a legal complaint to the Paris financial prosecutor against unnamed individuals allegedly involved in a case of fraud and money laundering. The Sherpa investigation has had a significant impact on the case of Riad Salameh by providing crucial evidence, facilitating asset seizures, and promoting international cooperation.

During a press conference Bourdon provided insights on the ongoing French judicial investigation. He stated that the investigation is progressing fairly rapidly and is expected to be completed by the end of this year. Following the completion of the investigation, an order for a referral to the competent court is expected to be issued in 2024.

Regarding the judicial implications of Salameh’s failure to appear before the French courts – knowing that the BDL chief was prohibited from travelling on May 24 – the trial should proceed with the presence of his lawyers and a judgement would be delivered in absentia, according to Bourdon.

In the event of a conviction, Bourdon explained that the courts would seize the assets (amounting to 120 million dollars), which would then be confiscated. “These confiscated assets would be returned to Lebanon, following the provisions of a French law enacted in August 2021. This law aims to facilitate the restitution of assets to populations who have been impoverished due to the acquisition of illicit assets by individuals holding public positions,” Bourdon said.

Amélie Lefèvre, who was present alongside her colleague, highlighted that the actual recovery of the assets’ value is contingent upon the Lebanese government executing projects aimed at enhancing the well-being of the Lebanese population.

In this regard, Karim Daher, the President of CPDD, expressed his disappointment regarding the delayed implementation of a sovereign fund established by Lebanese law 214/2021, specifically designed for the restitution of funds.

Sherpa is exploring the possibility of lodging a complaint against several Lebanese banks operating in France. He mentioned that the NGO had already taken legal action against the French subsidiary of Bank Audi in late 2022, accusing them of complicity in the fraudulent organization of insolvency.

According to Bourdon, the bank subsidiaries are suspected of manipulating accounting records to conceal substantial capital outflows from Lebanon. Additionally, he stated that Sherpa is preparing to file appeals against public figures, referring to individuals holding public positions who are allegedly involved in illicit financial activities.

As Salameh remains under custody, a lot of questions need to be put forward which could lead to the exposure of higher-level figures, and mostly what is the cover-up of the Optimum Invest case, and its potential repercussions. Notably, why did Prime Minister Mikati intervene when Attorney General Tannous began investigating Salameh’s suspicious transactions? Are politicians worried about disclosing key figures that might be implicated if Salameh’s financial dealings are fully uncovered? What role did Salameh play in silencing or delaying investigations into Optimum Invest? and could his downfall signal a larger reckoning for other high-ranking officials in Lebanon’s financial and political elite? Why did the CMA, under Salameh’s influence, keep the findings of the 2015 audit hidden for so long, and why was it never enforced? How deep does the relationship between Salameh, Optimum Invest, and other banking executives go? Is Salameh being made a scapegoat to shield more influential players behind Lebanon’s economic collapse? What is the role of many whistleblowers or insiders that are coming forward with crucial information about the Optimum Invest affair? And mostly why this manipulation and heavy interventions on social media?

Maan Barazy is an economist and founder and president of the National Council of Entrepreneurship and Innovation. He tweets @maanbarazy. 

The views in this story reflect those of the author alone and do not necessarily reflect the beliefs of NOW.