Bangladesh looks to central bank cyber-heist case settlement to recover funds

Bangladesh is looking to leverage pressure from a US legal battle to come to an agreement with the Filipino defendants of a case over a central bank cyber-heist to recover the stolen funds.

A team composed of lawyers and Bangladesh Bank officials will depart for the Philippines next week as part of the government’s continued efforts to recover the stolen reserves, said the central bank’s chief counsel Ajmalul Hossain QC.

He too would be a part of the team, the lawyer told reporters in Dhaka on Monday.

Their visit to the Philippines will aim to “recover the stolen funds through a settlement after discussion”, according to Hossain.

“We are continuing our legal battle. We have started the case in the New York federal court. The case has been set for Apr 2,” he said.

“Before that, we want to discuss the matter with the defendants first. We want to talk so that we can come to a creditable resolution to this matter through an agreement,” the lawyer added.

Ajmalul Hossain QC.

In its suit filed with the US District Court in Manhattan on Feb 1, Bangladesh Bank accused Manila-based Rizal Commercial Banking Corporation or RCBC and dozens of others, including several top executives, of involvement in a “massive” and “intricately planned” multi-year conspiracy to steal its money.

The other accused include Philrem Service Corporation, casino owners and beneficiaries, Bangladesh Bank officials said.

The Bangladesh Bank lost $81 million to the heist in February 2016. The funds were transferred to the Philippines and beyond using Philrem and a branch of the RCBC.

RCBC was fined a record 1 billion pesos ($19.17 million) by the Philippine central bank in August 2016 for its failure to prevent the movement of the stolen money through the bank.

A former treasurer of RCBC and five other workers at the branch where the cash was withdrawn face money laundering charges.

On Jan 11 this year, a Philippine court held a former manager of a RCBC branch guilty on eight counts of money laundering, the first conviction in the cyber heist.

Just $15 million of the stolen money has been recovered from a Manila junket operator, a role that involves marketing casinos to VIPs.

Bangladesh has been constantly demanding that the RCBC gives back the stolen funds, but the bank has not yet showed any sign of compromise.

Now Bangladesh Bank officials believe the US suit will exert pressure on the bank to return the funds.

“Bangladesh has initiated the discussions. But I have come to know that many of the other side are interested to sit,” lawyer Hossain said.

He was hopeful that Bangladesh will be able to recover the remainder of the stolen reserve money.

“Let’s see whether it happens through legal battle or mediation and settlement,” he added.

The Bangladesh team will sit on Mar 10 to discuss their strategy before leaving for the Philippines, the lawyer said.

They will sit with the defendants, Filipino law enforcers, divisional judge, and representatives of anti-money laundering agency on Mar 11 and 12, according to Hossain.