Bangladesh Bank to file fresh case in NY as US Federal Court quashed its case

HM Murtuza | Published: 00:30, Mar 24,2020


Bangladesh Bank on Monday decided to file a fresh case with a state court in New York against a Filipino bank and other parties to recover $81 million stolen from its account with the Federal Reserve Bank of New York.

Bangladesh Financial Intelligence Unit chief Abu Hena Mohammad Razi Hasan told New Age that the fresh move was taken as the federal court, Southern District Court of New York, found the case filed by BB on January 31, 2019 out of the purview of the Racketeer Influenced and Corrupt Or ganisations Act (RICO).

The BB had filed the case under the RICO Act.

The court refused to accept the case on the ground that the petition, intricately planned multi-year conspiracy, along with some other issues could not be established as the Rizal Commercial Banking Corp has no presence in New York.

‘The petition could be accepted only if the RCBC had any branch in New York,’ Razi Hasan said.

‘The court gave the order on Saturday but, we came to know about it on Sunday,’ he said adding, ‘We instructed our lawyer in New York to file a fresh case with the state court and hope it would be filed online by Wednesday.’

The court, however, junked another joint petition of the defendants that sought  ‘motion to dismiss’ the case on the ground that the case filed by the BB was out of the jurisdiction of any court in New York.

‘The court in its order mentioned that the money was hacked from the Federal Reserve Bank,’ a BB statement issued on the day said, adding, ‘It was undoubtedly proved that the incidents — forged payment order, transfer of the stolen money to correspondent accounts and the  subsequent transfer to another country – took place in New York.’

The court also mentioned that New York was the appropriate place to run the case as a federal entity had faced the cyber-attack, said BB.

In a disclosure, Bloomberry Resorts Corporation — the operator of Solaire Resort & Casino — said the United States District Court in the Southern District of New York quashed the Racketeer Influenced and Corrupt Organizations Act or RICO conspiracy claim filed by Bangladesh Bank against the company, as well as the Rizal Commercial Banking Corporation, Eastern Hawaii Leisure Company, Centurytex Trading, and remittance firm Philrem Service Corp and their officers.

In 2016, the hackers tried 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.

Of the stolen money, Manila returned $15 million following an order of a regional Philippine court in November 2016 while the rest $66 million still remains to be recovered.

BB in its complaints had mentioned the 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.

It said that the funds were then funnelled through RCBC accounts in New York City to the Philippines, where much of it disappeared in that country’s casino industry.

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