“To the best of our knowledge I can confirm that we have no clients related in any way to the crimes mentioned by the American Treasury,” said Georges Zard Abou Jaoude, chairman and general manager of Lebanese Canadian Bank (LCB).
The U.S. Treasury Department on Thursday designated LCB a “primary money-laundering concern,” claiming it was involved in a money-laundering and drug-trafficking operation with ties to Shi’ite militant group Hezbollah.
But Lebanon’s Central Bank said privately owned LCB abided by international anti-money laundering standards and was well managed, telling clients “transactions with it are secure.”
Abou Jaoude told Reuters that the man described by the U.S. Treasury as a “drug kingpin,” Ayman Joumaa, had opened an account at the bank four years ago, depositing $500,000.
“The amount of transactions in this account in four years is less than $100,000. Everyone knows this is not the way to launder money,” he said at the bank’s central Beirut base.
LCB says Joumaa’s account was frozen last month when he was named by the Treasury along with nine other people as part of a drug-trafficking and money-laundering network suspected of doing up to $200 million a month in business.
The U.S. Treasury statement said several of the individuals involved “hold or utilize cash deposit accounts at LCB to move hundreds of millions of dollars monthly in cash proceeds from illicit drug sales into the formal financial system.”
It also said there was reason to believe “LCB managers are complicit in the (drug) network’s money-laundering activities.”
CHECKS
Abou Jaoude said LCB was audited twice a year by an anti-money laundering committee. “They check our systems and, of course, we deny any activity whatsoever concerning these matters,” he said.
Responding to a Treasury statement that a Hezbollah envoy in Tehran “was involved in Iranian officials’ access to LCB” and its managers, Abu Jaoude said the bank had no relation with Iranian institutions or any companies related to Hezbollah.
Hezbollah, which is on a U.S. blacklist of foreign terrorist organizations, and its political allies brought down Lebanon’s unity government last month and have backed Prime Minister designate Najib Mikati to form a new government.
Abou Jaoude also welcomed Friday’s statement from Central Bank Governor Riad Salameh, saying it helped stem withdrawals by customers alarmed at the U.S. Treasury announcement.
“Most of the withdrawals came back to the bank. A lot of cheques which were issued were put back,” he said, declining to say how much money had been withdrawn.
The bank reported a 63 percent increase in net profit last year to $52 million and assets of more than $6 billion.
Stuart Levey, the Treasury’s undersecretary for terrorism and financial intelligence, said it proposed cutting off LCB from U.S. banking services.
Abou Jaoude said the bank’s anti-money laundering measures were as tough as those in the U.S., adding he had now asked “two of the big five audit companies” to investigate its operations and was ready to go to Washington “to present my case as soon as possible.”
(Editing by David Hulmes)