Bangladesh will sue Manila bank in US court to recover stolen central bank fund

Bangladesh Bank has decided to sue a Philippines bank in a US court for damages over the 2016 heist of its central bank’s reserve.

Unidentified hackers stole $81 million from Bangladesh Bank’s account at the New York Fed, using fraudulent orders on the SWIFT payments system.

The fund was sent to Manila-based Rizal Commercial Banking Corp or RCBC and then disappeared into the casino industry in the Philippines.

Finance Minister AMA Muhith on Wednesday first confirmed Bangladesh’s move to start the lawsuit. The Bangladesh Bank provided details in a media briefing later in the day.

The Federal Reserve Bank of New York and SWIFT will be parties to the lawsuit, said Deputy Governor Abu Hena Mohd Razee Hassan.

The case will be filed in New York in two to three months, he said.

Two years into one of the world’s biggest cyber heists, it is yet to be found who were responsible and Bangladesh has been able to retrieve only about $15 million, mostly from a casino junket operator.

Philippines authorities opened a probe and slapped a $20-million fine on RCBC, but the Manila-based bank says it is not responsible for recovering the stolen money.

“As much as $17 million has been traced to money remittance company Philrem. The Anti-Money Laundering Council in the Philippines has confiscated the fund and a lawsuit is ongoing.”

Another $29 million has been traced to Casino Solaire, now frozen by the court, in a pending case, he said.

“Bangladesh recovered $15 million and the process to get back the remaining fund is on,” said Hassan.

Hassan alleged that several RCBC officials “from the top to bottom” were involved. “That’s why we will bring criminal charges.”

He said the decision to proceed with a lawsuit came after a delegation led by Bangladesh Bank’s counsel Ajmalul Hossain QC filed its findings following a recent visit to the Philippines.

Hassan said they will consider if the RCBC comes up with any proposal before filing the lawsuit.

The Manila bank, however, has accused Bangladesh Bank of covering up its own negligence.

In a statement in December, RCBC demanded that Dhaka should stop making them a “scapegoat”.

In the audacious bank heist, hackers tried to swindle $1 billion belonging to Bangladesh from the Federal Reserve Bank of New York using forged commands through SWIFT messaging system.

The hackers siphoned off $81 million to accounts in the Philippines using five messages. Another $20 million was wired to Sri Lanka.

Though the Sri Lankan transfer was stopped successfully, the fund wired to the Philippines made its way to gambling dens, making it impossible to be recovered.

People in Bangladesh could learn about the largest cyber heist in the world through reports published in a Filipino newspaper a month after the incident.

The heist cost Governor Atiur Rahman his job after he drew flak for keeping the theft under wraps. It was followed by a major overhaul of the top brass of Bangladesh’s central bank.

The Bangladesh government had commissioned a probe body over the theft, which filed its findings in May 2016.

Philippines authorities had requested Bangladesh to share the findings, but Finance Minister AMA Muhith declined.

He told the media on Wednesday that they will not make the probe report public for now. “We are yet to decide on it. Let’s see when it can be done.”