Belgium thinks Gaddafi laundered cash through embassy

BRUSSELS (Reuters) - Former Libyan leader Muammar Gaddafi's family members may have used the Libyan embassy in Belgium to launder government funds before the country slid into civil war last year, a Belgian financial fraud watchdog said on Friday.

"It's more than a suspicion," the watchdog's president Jean-Claude Delepiere told Reuters.

The Libyan treasury transferred about 1.5 million euros to its embassy in Brussels, which was then mostly withdrawn in cash, Belgium's money-laundering watchdog said in its annual report.

The Belgian Financial Intelligence Processing Unit searched the financial accounts of the embassy in Brussels at the start of 2011 after getting a tip-off from banks.

The agency believes the money may have originated from Libyan organisations controlled by Gaddafi's family.

"We have only described the case in summary," said Delepiere. "We don't give all of the information in our public report."

Following the start of fighting in Libya in 2011, the United Nations and its member countries located and froze about $19 billion in assets believed to have been under the control of Gaddafi or his associates, U.S. officials said at the time.

In March this year, the Libyan government reclaimed a London mansion worth 10 million pounds from Gaddafi's son Saadi, after a British court ruled it had been bought using stolen Libyan state funds.

(Reporting By Ben Deighton. Editing By Sebastian Moffett.)