THIS is a welcome piece of news that a Philippine court on Thursday held a former branch manager of Manila-based Rizal Commercial Banking Corp guilty of money laundering in which $81 million was stolen from the Bangladesh Bank’s account at the Federal Reserve Bank of New York in 2016. The court sentenced the former manager to a jail term and ordered her to pay about $109 million in fine. Cyber thieves on February 4 that year transferred $101 million from the Bangladesh central bank’s New York Fed account using fraudulent orders on the SWIFT payment system. While the transfer of $20 million could stopped in Sri Lanka and sent back to Bangladesh, $81 million went out of the banking channel in the Philippines. The Philippine central bank in August 2016 also fined the Manila bank about $19.17 million for its failure to prevent the movement of the stolen money. Manila in November 2016, however, returned $15, which could be recovered from a Manila junket operator, to Bangladesh and the remaining of the $81 million is reported to have been laundered to the Philippine casino industry. The other piece of good news is that the government has initiated a move to file a case in the United States for the recovery of the stolen money.
But what remains worrying in all this is that the allegation of the culpability of central bank employees in the theft, which kept coming off and on in the initial days of investigation, has not been properly investigated. With SWIFT authorities that time seeking to explain that the Bangladesh central bank was responsible for the security of its own systems interfacing with the SWIFT network, this sought to point to the complicity of a sort of central bank people in the theft. This also came to question the security standard of the Bangladesh Bank’s financial management system. The Federal Bureau of Investigation that time also suspected the theft to be partly an inside job. While the allegations could be entirely untrue, yet the hinted culpability of bank employees has not yet been properly looked into. The Criminal Investigation Department was then reported to be claiming to have identified some ‘components’ of different ‘agencies and individuals’ to be responsible for the neglect of duty, potentially having criminal intention, but no one was named or arrested. When the theft came to light, there were allegations that such an online transaction fraudulence, reported to have been properly authenticated with the bank’s actual code, could not have happened without the involvement of bank insiders.
No official or employee working with the central bank, when the theft of money took place, has so far been investigated and punished. At least, nothing of this sort has so far happened in plain sight. While the government must file the case, against both Rizal Commercial Banking Corp and the New York Federal Reserve Bank or against the Manila bank with New York Fed being named a party, as the finance minister early December 2018 hinted at, the government must also properly investigate the allegations of central bank people being involved in the process and prosecute anyone found responsible to stop the recurrence of similar incidents.
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