A former US ambassador to Afghanistan, Iraq and the United Nations has been caught up in a suspected money-laundering inquiry that led to a freeze on bank deposits he and his wife hold in Austria.

Austrian officials said Zalmay Khalilzad, the founder of a global consulting group, was being investigated for suspected money laundering related to business activities in Iraq and the United Arab Emirates. The case became public after a blogger found documents while rummaging through a garbage can used by the state prosecutor's office in Vienna.

However, few other details are known about the case.

The US Justice Department in May 2013 asked Austrian authorities for records regarding the Viennese bank accounts of Khalilzad's wife, Cheryl Benard, according to a statement by Khalilzad's US lawyer, Robert B Buehler. Austrian authorities then froze the accounts.

Khalilzad strongly contested the decision to freeze his and his wife's accounts, saying it was an overreaction to a routine request for information by the Justice Department to Austrian officials.

The Austrian state prosecutor, Thomas Vecsey, confirmed the blogger's report in the Austrian weekly Profil, which said the inquiry centres on the alleged transfer of $1.5 million to an account belonging to Benard.

Buehler noted in a statement that no charges have been filed against Khalilzad or Benard..

"The DOJ request for information did not seek the seizure of assets belonging to Ms Benard or Ambassador Khalilzad, nor did the DOJ ask Austrian authorities to seize any of their accounts," Khalilzad's lawyer said in  the statement. "However, for reasons that remain unclear, an Austrian prosecutor ignored the plain language of the DOJ request and froze Ms Benard's accounts solely on the basis of the DOJ's request for information."

The law firm said the Justice Department request did not contain any evidence of money laundering or other offenses, and that the Austrian prosecutor had not developed any evidence of his own to support the seizure of the accounts.

Justice Department spokesman Peter Carr declined to comment on Monday.

Source: Agencies