A New York widow is fighting to recover $17.6 million from a Lebanese bank that refuses to release her late husband’s trust fund, trapped in a financial system described by the World Bank as a “Ponzi scheme.”
At a Glance
- Patricia Raad, 70, is battling Bank Audi over $17.6 million meant for her children’s trust fund
- The money represents her late husband Michel’s life savings, sent to Lebanon before his 2009 death
- Lebanon’s 2019 financial collapse has frozen over $100 billion in deposits across the banking system
- Raad’s lawsuit in New York was dismissed due to jurisdiction issues, forcing her to appeal
- The case highlights how international banking issues can devastate retirement security and inheritance plans
A Family’s Financial Security Trapped Overseas
Michel Raad immigrated to the United States from Lebanon and built a successful career in the cosmetics and perfume industry. Throughout his working years, he sent his earnings to Bank Audi in his home country, accumulating substantial savings intended to provide for his family’s future. Following Michel’s death in 2009, the funds were placed in a trust for their children, with the arrangement that the money would mature nine years later. The trust represented Michel’s legacy and his family’s financial security – a safety net Patricia Raad fully expected to access when needed.
When the trust matured, Patricia attempted to transfer the funds to New York as originally planned. According to her account, a Bank Audi manager personally intervened to prevent the transfer. “The bank manager ‘started begging and pleading, saying, ‘Please don’t do that, it will look bad on me’,” Raad, 70, recalled. “They betrayed me.”
Lebanon’s Financial Crisis Impacts Global Depositors
In 2019, Lebanon’s economy collapsed in what the World Bank has characterized as a deliberate “Ponzi scheme” that has devastated countless depositors. The meltdown has frozen an estimated $100 billion in deposits within Lebanon’s banking system, affecting individuals and families worldwide who had placed their savings in Lebanese financial institutions. Patricia Raad’s $17.6 million trust fund became one of many accounts suddenly inaccessible to their rightful owners, creating financial hardship for people who had trusted these institutions with their life savings.
“There can be no genuine debate that $17,623,674 of [Raad’s] money on deposit with Bank Audi is immediately due,” she said in the lawsuit, which accused the bank of “misappropriating” the money.
When Bank Audi refused to release the funds after multiple agreements to transfer the money in installments, Patricia took legal action. However, her lawsuit in New York was rejected due to jurisdiction issues, with the court ruling that the case should be handled in Lebanon’s legal system. This effectively created a significant barrier to her ability to recover the funds, as pursuing legal action in Lebanon’s unstable environment presents considerable challenges.
International Legal Disparities Compound the Problem
Patricia has appealed the dismissal of her New York lawsuit, arguing that the state has jurisdiction due to Bank Audi’s extensive connections with major New York financial institutions. Her attorney, Douglas Kellner, highlighted the inequity in international approaches to such cases, noting that “England and France do allow their citizens to sue the Lebanese banks — but not the courts in New York.” This disparate treatment of similar claims across different countries underscores the complex and often inconsistent nature of international banking regulations and legal remedies.
For Patricia Raad, the situation extends beyond financial loss to emotional devastation. The trust fund represented not just money but her husband’s wishes for their children’s future and security. As she continues her legal battle to recover the funds, she joins thousands of other depositors fighting to access their trapped savings in Lebanon’s banking system. Her case serves as a sobering reminder for older adults about the potential risks of placing retirement funds or inheritance in overseas financial institutions, particularly in countries experiencing economic instability.
Health Implications of Financial Stress
The prolonged legal battle and financial uncertainty have taken a toll on Patricia’s wellbeing. For adults over 40, chronic stress from financial insecurity can contribute to numerous health issues, including elevated blood pressure, sleep disruption, and increased risk of heart disease.
Financial stress is particularly damaging in later years when recovery from economic setbacks becomes more difficult due to limited earning potential and time horizons. The American Psychological Association consistently identifies money concerns as a leading source of stress for adults, with potential long-term health consequences.
As Patricia awaits her appeal in the US Court of Appeals Second Circuit in Manhattan, her case highlights the importance of diversifying retirement assets and understanding the legal protections available for overseas investments. For those planning for retirement or managing inheritance funds, consulting with financial advisors familiar with international banking regulations may help prevent similar situations and protect both financial and physical wellbeing in later years.