Exclusive: Bangladesh Bank, NY Fed discuss suing Manila
bank for heist damages
Send a link to a friend
[December 08, 2017]
By Krishna N. Das and Serajul Quadir
DHAKA (Reuters) - Bangladesh's central bank
has asked the Federal Reserve Bank of New York to join a lawsuit it
plans to file against a Philippines bank for its role in one of the
world's biggest cyber-heists, several sources said.
The Fed is yet to respond formally, but there is no indication it would
join the suit.
Unidentified hackers stole $81 million from Bangladesh Bank's account at
the New York Fed in February last year, using fraudulent orders on the
SWIFT payments system. The money was sent to accounts at Manila-based
Rizal Commercial Banking Corp <RCBS.PS> and then disappeared into the
casino industry in the Philippines.
Nearly two years later, there is no word on who was responsible and
Bangladesh Bank has been able to retrieve only about $15 million, mostly
from a Manila junket operator. (http://reut.rs/2jk1W74)

Officials from Bangladesh Bank and the New York Fed spoke about legal
action against RCBC in a conference call last month that was also
attended by two representatives from SWIFT, according to three sources
in Dhaka who had direct knowledge of the conversations.
It was agreed that Bangladesh Bank would send a proposal on the suit to
the New York Fed, they said.
"The aim is to file a case by March-April in New York," said one of the
sources. "Work is on. Bangladesh Bank is likely to send something to the
Fed soon."
The source said the idea was it would be a civil suit to recover the
money, and that Bangladesh hoped the Fed and SWIFT would be joint
petitioners.
Subhankar Saha, a spokesman for Bangladesh Bank, said he had no
knowledge of any plans to sue RCBC but that "efforts are on to recover
the entire stolen money".
The New York Fed and SWIFT declined comment.
A source familiar with the New York Fed's thinking confirmed that
Bangladesh Bank's external counsel raised the idea of filing a suit
against RCBC in the call.
The New York Fed officials agreed to review any proposal Bangladesh Bank
wrote up but they did not formally agree to a joint effort, and have not
since worked on it nor heard from Bangladesh Bank, the source said.

There was no indication that the Fed would join the suit once it had
received and reviewed the proposal.
[to top of second column] |

Commuters pass by the front of the Bangladesh central bank building
in Dhaka, Bangladesh on March 8, 2016. REUTERS/Ashikur Rahman/File
Photo

ROGUE EMPLOYEES
RCBC has blamed rogue employees and Philippine prosecutors have filed money
laundering charges against a former RCBC bank manager and four people who owned
the bank accounts where the funds were sent, but are not identifiable since the
accounts were in fake names. They are the only people to be formally cited
anywhere in the world in association with the crime.
Bangladeshi officials have cited internal RCBC documents, also seen by Reuters,
to assert that the Filipino bank ignored suspicions raised by some RCBC
officials when the money was first remitted to the accounts on Feb. 5, 2016, and
then delayed acting on requests from RCBC's head office to freeze the funds on
Feb. 9. (http://reut.rs/2BM9EOO)
RCBC did not respond to requests for comment. But it has said in the past that
it would not pay any compensation and that Bangladesh Bank bore responsibility
for the theft since it was negligent.
RCBC was fined a record one billion Philippine pesos ($20 million) by the
country's central bank last year for its failure to prevent the movement of the
stolen money through it.
Separately, a Bangladesh court has sent "letters rogatory" to the United States
seeking the findings of the Federal Bureau of Investigation (FBI) into the case,
said the main police investigator in Dhaka.

Letters rogatory are documents used to obtain judicial assistance from foreign
courts.
"We have questions for the Federal Reserve Bank, we want to collect the FBI
report, what their findings are," Molla Nazrul Islam, a special superintendent
of police in Bangladesh, told Reuters this week.
An FBI spokeswoman said the agency could not comment on ongoing cases.
A hacking group called Lazarus that is believed to have connections to North
Korea has been linked to the Bangladesh cyber heist and some U.S. officials said
earlier this year that prosecutors were building a case against Pyongyang.
But no case has yet been filed.
(Reporting by Krishna N. Das and Serajul Quadir in Dhaka; Additional reporting
by Karen Lema in Manila, Michelle Price in Washington, Jonathan Spicer in New
York and Jim Finkle in Toronto; Editing by Raju Gopalakrishnan)
[© 2017 Thomson Reuters. All rights
reserved.] Copyright 2017 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed. |