Bangladesh Bank has filed a case in New York against a Philippine bank to recover stolen fund worth $81 million by unidentified hackers from its account at Federal Reserve Bank nearly three years ago.
Bangladesh Financial Intelligence Unit chief Abu Hena Mohd Razee Hassan told New Age on Friday that Manila-based Rizal Commercial Banking Corp was made main accused in the case filed in the Southern District Court of New York on Thursday evening.
In its complaint, BB accused RCBC and dozens other, including several top executives, of involvement in a ‘massive’ and ‘intricately planned’ multi-year conspiracy to steal its money, he said.
RCBC in a statement attached to its disclosure to the stock exchange said on Friday that the complaint by Bangladesh central bank was completely baseless.
CNN quoting RCBC lead counsel, US-based attorney Tai-Heng Cheng reported that RCBC had already hired US-based law firm Quinn Emanuel for its defence.
Tai-Heng Cheng said, ‘If the Bank of Bangladesh was serious about recovering the money, they would have pursued their claims three years ago and not wait until days before the statute of limitations.’
‘The case was nothing but a political stunt,’ he added.
Former Bangladesh Bank governor Mohammad Farashuddin said the case was imperative to recover the stolen fund from RCBC.
According to him, RCBC should not defend as it already faced fine by a court in the Philippines for fraudulence in connection of the unprecedented reserve heist.
BB in its complaints said funds were stolen with the help of unnamed North Korean hackers who used malware with such names as ‘Nestegg’ and ‘Macktruck’ to obtain backdoor access to its network, according to Reuters.
It said funds were then funnelled through RCBC accounts in New York City and to the Philippines, where much of it disappeared in that country’s casino industry.
Manila returned $15 million following an order of a regional Philippine court in November 2016 while the rest $66 million still remained to be recovered.
Farashuddin said he was very happy as the case was finally filed in line with suggestion of the government-appointed probe body led by him.
He informed that they recommend not making New York Fed a party in the case so that BB could get cooperation from Fed.
The probe report is yet to be made public despite commitment by former finance minister AMA Muhith.
Fazle Kabir, governor of Bangladesh Bank, said on Wednesday at a press conference that New York Fed had signed an agreement to help with the case.
Another former BB governor Salehuddin Ahmed said that filing case was a positive step towards recovering the stolen fund and the case looked favourable since RCBC was already found guilty by a court in Manila.
He, however, said it was not certain when they money could be brought back.
A senior finance ministry official said the country had fare chances to win the legal battle against RCBC although BB might face questions for a month-long delay in disclosing the cyber theft hitting headlines of major dailies across the world.
In March 2016, Muhith admitted the loss of reserve fund, nearly a month after the incident that prompted the government to discard former governor Atiur Rahman and two deputy governors.
BIFU chief Razee Hassan, also a former deputy governor, said money exchange companies like Philram in Manila and casinos there were made other accused in the case.
He also said the filing of the case was completed on 8:00pm New York time by US law firm Cozen O’Connor.
The visiting BB team comprising BFIU adviser Debaprasad Debnath, general manager Md Jaker Hossain, joint director Mohammad Abdur Rab and BB’s local legal counsellor Ajmalul Hossain QC were present during the filing of case.
The team is expected to return Saturday.
The hackers sought to steal close to $1 billion, but ultimately stole $101 million, including $20 million sent to a Sri Lankan account. That transfer was reversed after a spelling error was caught.
On January 10, a Philippine court found Maia Deguito, who managed RCBC’s Makati City branch, guilty of eight counts of money laundering tied to the heist.
It sentenced her to a 32- to 56-year prison term and a $109 million fine.
In August 2016, the Philippine central bank fined RCBC a record 1 billion pesos ($19 million) for failing to stop stolen money from moving through the bank.
The case is Bangladesh Bank v Rizal Commercial Banking Corp et al, US District Court, Southern District of New York, No 19-00983 and culmination of abortive diplomatic efforts by Bangladesh with the Philippines to bring back the money home.
Earlier, in May 2018, finance minister AMA Muhith while attending annual general meeting of Asian Development Bank in Manila proposed an out-of-court settlement on the recovery of the rest $66 million stolen reserve fund.
Manila’s response to the proposal was lukewarm, according to a report by Manila-based daily Business World.
In December 2016, law minister Anisul Huq led a Bangladesh Bank delegation to Manila for speeding up the recovery of the rest of the stolen money but without any major success.
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