Lebanese banks return stolen millions to Baghdad

Lebanese banks have returned to Iraqi authorities nearly all of the money hidden in Beirut institutions by former dictator Saddam Hussein’s officials, the country’s banking association says.

On Wednesday, the head of Lebanon’s General Security branch, Maj Gen Abbas Ibrahim, said a joint operation with Iraqi authorities had stopped a $1 billion fraud scam targeting Iraqi branches of major Lebanese lenders. He said suspects were arrested.

Joseph Torbey, head of the association, said on Thursday that the network had exploited Iraq’s change of regime and targeted the Lebanese banking sector “within a framework of organised crime”. Lebanese investigators claim the Iraqi network took people with the same names as members of the Saddam regime to the Lebanese banks and requested access to millions of dollars in deposits from before 2003.

Some supplied forged documents to support their claims.

The intelligence service said the network tried to defraud Lebanon’s Bank Audi, one of the four largest lenders in Lebanon, but did not disclose if funds were lost.

The members of the network are still at large and investigations are continuing.

There have been reports that members of the former regime smuggled funds abroad, including to Lebanon, through the UN’s Oil for Food Programme, after economic sanctions were imposed on Iraq during the 1990s.

Mr Torbey said that banks were working with Iraqi authorities to restore the money to the Iraqi Central Bank.

The value of the funds is estimated to be in the hundreds of millions.

“The banking sector in Lebanon has become the victim of a vicious scheme to harm its reputation and the misleading rumours that spread across the media has caused confusion among the Lebanese society,” Mr Torbey said.

On July 17, Bank Audi thanked the Iraqi authorities and Lebanon’s security agency for their “intensive effort and timely action” over the network’s attempts to gain access to the funds.

Lebanon’s banking sector has remained stable amid the country’s political upheavals, an influx of 1.5 million refugees who have strained its resources and slow economic growth.

The country’s banks are crucial to its economy, with lenders holding more than $220 billion (Dh808.12bn) worth of assets.

Investigators say Iraqi scammers tried to access millions of dollars held in Lebanese banks by simple identity fraud