Despatch from Dhaka | International

Bangladesh’s bid to retrieve stolen money

The RCBC building in Manila’s financial district.

The RCBC building in Manila’s financial district.   | Photo Credit: NOEL CELIS

In a complaint filed with the U.S. District Court in Manhattan, Bangladesh Bank says the Manila-based RCBC helped North Korean hackers steal $101 million from its account with New York Fed.

After a long delay, Bangladesh sued a Philippine bank on January 31 to retrieve the funds stolen from its central bank in 2016 in a major reserve heist. Bangladesh Bank accused the Manila-based Rizal Commercial Banking Corporation (RCBC) of helping North Korean hackers steal $101 million from its account with the Federal Reserve Bank of New York.

The complaint filed with the U.S. District Court in Manhattan alleges a “massive, multi-year conspiracy” to steal its money. Much of the fund disappeared in the Philippines’ casino industry and gambling junkets. It was funnelled through a series of complicated account transfers, according to the complaint. Of the amount, $20 million was returned by a Sri Lankan bank because of the erroneous name of the recipient.

“RCBC and its senior personnel had full authority and control over these accounts, and all of the RCBC personnel who touched them — from the opening of the fictitious accounts, to terminating the short-lived hold and to allowing the numerous transactions to continue despite their knowledge or reckless disregard of the nature of the stolen funds,” Bangladesh Bank said.

For its part, the New York Fed will provide technical help to Bangladesh Bank under a new agreement in its litigation against those who were “complicit” in the heist. “That technical assistance includes, among other things, the New York Fed and Bangladesh Bank meeting jointly with the relevant agencies or parties in the Philippines to strongly encourage them to assist in the recovery of stolen funds,” according to a joint statement.

The New York Fed and Bangladesh Bank believe that safe and reliable funds transfer services are critical for global financial stability and that the type of fraud perpetrated on Bangladesh’s account at the Fed represents a threat to the international funds transfer system. “The purpose of the case is to recover the stolen funds and bring those who were either beneficiaries or complicit in the heist to justice,” Bangladesh Bank Governor Fazle Kabir said at a media briefing on January 30.

While Bangladesh Bank hired Cozen O’Connor, an American law firm, for its legal battle, RCBC hired another U.S. law firm, Quinn Emanuel, to defend the suit. “We will show that this suit is nothing more than a political stunt by the Bangladesh Bank to try to shift blame from themselves to RCBC,” the Philippine bank said in a tock exchange filing on February 1, citing Tai-Heng Cheng, Quinn Emanuel’s lead attorney to the case.

Lazarus Group

In 2018, the U.S. Justice Department charged a North Korean man, Park Jin Hyok, with computer fraud, saying he was part of a government-sponsored team, known as the ‘Lazarus Group’, behind the hack of Sony Pictures, the Bangladesh Bank theft and global ransom attacks. “A review of the facts shows that Bangladesh Bank’s errors, omissions, and lapses in security protocols are the cause of its loss,” the Quinn Emanuel lawyer was quoted as saying in the RCBC filing.

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 varying prison terms from 32 years to 56 years and a $109 million fine.

Ms. Deguito is a defendant in the lawsuit filed by Bangladesh. The case is just the beginning of a long journey ahead through the American court. It appears that the lawsuit will take a long time to settle. A Bangladesh Bank official says it will take at least three years to reach the resolution of the case.

Arun Devnath is a journalist based in Dhaka

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Printable version | May 27, 2020 10:30:25 AM |

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