Security & Fraud

NY Fed Ponders Legal Action Over $81M Bangladeshi Heist

Bank heist

In what may be a legal salvo over a monumental bank heist perpetrated by cyber thieves, the central bank of Bangladesh has asked the New York branch of the Federal Reserve to join forces in a lawsuit levied against another bank, this one based in the Philippines.

Reuters reported news that the request has yet to be embraced or rejected. As the newswire noted, “there is no indication” the Fed will indeed sign on to sue.

The mulling of legal action came as officials from the two banks spoke by conference call in November. The call, said Reuters, also had been joined by two SWIFT payments representatives. Details of that call came from a trio of unidentified sources based in Dhaka, Bangladesh, during which an agreement was struck where the Bangladesh Bank would offer up a proposal to the New York Fed to sue Manila-based bank, Rizal Commercial Banking Corp. (RCBC).

As has been widely reported, hackers made off with $81 million that was housed in an account at the New York Fed, held by the Bangladesh Bank. The February 2016 cyberattack used bogus orders transmitted across the SWIFT pay network. The siphoned funds, in turn, were sent to accounts held at RCBC and then were brought to the Philippines casino industry.

The trail has grown a bit chilly, however. Reuters stated that there is no word yet on the identities of the bad guys, and only $15 million has been retrieved, which is a small part of what had been stolen. RCBC has said that “rogue employees” were tied to the case, and prosecutors based in the Philippines have filed charges against four individuals for alleged money laundering, including one bank manager and three account holders.

The suit is likely to be a civil one, and sources said the timeframe for filing may be during March or April of 2018.

In separate but related actions, “letters rogatory” have been sent by a Bangladesh court to the U.S., requesting information tied to FBI investigations into the heist.  Those letters, said Reuters, request judicial assistance from courts outside the requesting court’s country.

——————————

LATEST PYMNTS REPORT: MARCH 2020 B2B API TRACKER  

B2B APIs aren’t just for large enterprises anymore — middle-market firms and SMBs now realize their potential for enabling low-cost access to real-time payments and account data. But those capabilities are only the tip of the API iceberg, says HSBC global head of liquidity and cash management Diane Reyes. In this month’s B2B API Tracker, Reyes explains how the next wave of banking APIs could fight payments fraud and proactively alert middle-market treasurers to investment opportunities.

TRENDING RIGHT NOW