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Muhith draws battle lines over stolen reserves

Case against RCBC by April this year

US law firm to be hired, BD lawyers to assist in recovery suit

March 05, 2018 00:00:00

FE Report

Finance Minister AMA Muhith unveiled Sunday a government plan to sue Rizal Commercial Banking Corporation (RCBC) of the Philippines by April to recover the reserves stolen through cyber-heist.

He said the CID (criminal investigation department) has been asked to submit its investigation report as soon as possible to file the case in a New York court, as the money was taken away from Bangladesh's account with the US Federal Reserve Bank in that city.

An American law firm will be hired to deal with the case and Bangladeshi lawyers will also assist them, he told newsmen after an inter-ministerial meeting on this issue at Bangladesh secretariat.

Asked whether the Federal Reserve Bank of New York agreed to be a party in this case with Bangladesh, Mr Muhith said Bangladesh Bank governor Fazle Kabir will discuss the issue with them.

However, meeting sources said the CID may not be able to submit its investigation report by April, thus filing the case may get delayed.

Bangladesh has the scope to file criminal case against RCBC until February 2019, according to officials.

The cybercriminals hacked in the account and stole US$101 million from the reserves deposited with the US Federal Reserve Bank in February 2016. The money was transferred to accounts at RCBC in Manila, by placing fraudulent order on the SWIFT payments system.

Nearly $20 million of the plundered money was recovered from Sri Lanka. The lion's share of the booty landed in the Philippines-and that is reported to have been squandered through gaming in casinos, among other matters of misdealing.

Later, some $15 million could be recovered from the Philippines and channeling back some more money to Bangladesh is underway, according to the officials.

After the incident, New York Fed, Bangladesh Bank, and SWIFT decided to work together towards retrieving the remaining over $66 million from the Philippines.

The digital fraud was committed on the night of February 04, sending a total of 35 transfer orders into the US Fed where the central bank of Bangladesh maintains its foreign-exchange account.

Of the 35 transfer orders placed, 30 were blocked. Four transfers to the Philippine bank for a total of $81 million went through. The rest $20 million transferred to a Sri Lankan non-government organisation was reversed because the hackers misspelled the name of the entity.

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