Bangladesh Bank Cyber Heist: Lawsuit to be filed at NY court Wednesday
12:00 AM, January 31, 2019 / LAST MODIFIED: 03:31 AM, January 31, 2019

BB set to sue Rizal Bank in US court

Moves to recover $81m stolen from reserve

Bangladesh Bank Governor Fazle Kabir said the central bank was expected to file a lawsuit yesterday night with a US court against Philippines' Rizal Commercial Banking Corporation (RCBC) to recover the full amount stolen in the February, 2016 heist.

During that time, hackers made off with $81 million from the BB account with the Federal Reserve Bank of New York. The money was wired to RCBC's branch in Manila but only $14.54 was returned after the theft came to light.  

“The main aim is to recover the full amount; nothing short of it,” the BB governor said yesterday while talking to reporters during the release of the monetary policy for the second half of the current fiscal year at the bank's headquarters.

He said all preparations for filing the case were completed and a BB team was now in New York.  The case would be filed with The United States District Court for the Southern District of New York.

The Bangladesh team last night signed an agreement with NY Fed for resolution and assistance, the BB governor said.

A US law firm would file the case in the New York court on behalf of Bangladesh. 

After the Bangladesh team returns they will give details on the amount of compensation to be sought in the lawsuit.

Replying to a question about how much it would cost for appointing a law firm the BB governor said it was less than expected. He did not go into details about the amount.

On the reason for the delay in filing the case, the governor said the process of case disposal with the Philippines was a lengthy one. They hoped that much less time would be required in the NY court.

Meanwhile, RCBC, in a statement, said it had engaged a top New York law firm to handle its defence, according to Reuters.

“We welcome this complaint, as it is an opportunity for RCBC to put on record again that it was a victim of what was started in Bangladesh by still unnamed persons,” the bank said.

On February 4, 2016, hackers broke into the central bank's system and generated 70 fake payment orders to the Federal Reserve Bank of New York amounting to $1.94 billion.

The NY Fed's security system flagged the payment orders but only five of them fell through and $101 million was released.

Of the amount, $81 million was wired to RCBC's branch in Manila, while $20 million made its way to Sri Lanka.

Sri Lanka sent back the entire sum immediately after the heist was exposed while the Philippines sent back $14.54 million in November 2016 -- meaning $66.46 million is yet to be retrieved from there.

Kabir said the beneficiaries in this incident were RCBC and other private firms in the Philippines who were complicit in and involved with the incident.

He said the SWIFT system had been abused by the hackers and Bangladesh Bank and NY Fed were the victims.

The BB governor said a decision was taken in 2016 that NY Fed and SWIFT would continue their cooperation until the full amount of the stolen money was recovered.



Stay updated on the go with The Daily Star Android & iOS News App. Click here to download it for your device.

Type START <space> BR and send SMS it to 22222

Type START <space> BR and send SMS it to 2222

Type START <space> BR and send SMS it to 2225

Leave your comments

Top News

Top News