Bangladesh Bank heist

Banking on lax checks in huge cyber caper

A banking industry veteran says RCBC's head office could have done more than just send an e-mail to prevent bank manager Maia Deguito from moving US$81 million out of her branch, especially as the money had already been flagged by Bangladesh.
A banking industry veteran says RCBC's head office could have done more than just send an e-mail to prevent bank manager Maia Deguito from moving US$81 million out of her branch, especially as the money had already been flagged by Bangladesh.PHOTO: AGENCE FRANCE-PRESSE

Philippine bank manager gives details on how the millions flowed

On May 15 last year, Ms Maia Deguito, manager of an undistinguished branch of the Philippines' sixth- largest bank, met five men at one of Manila's swanky casinos. She knew only one of them: Mr Wong Kam Sin, an ethnic Chinese who had been in the Philippines since he was 10.

At an ongoing congressional probe, Ms Deguito said she met Mr Wong through car trader Jason Go, who had helped her with her career and was a "valued client" of her employer, Rizal Commercial Banking Corp (RCBC).

She said that at a birthday party back in 2014, the bank's president, Mr Lorenzo Tan, himself told her to "take care" of Mr Wong. So she did.

Ms Deguito said she came when Mr Wong asked for a meeting on May 15, and, as Mr Wong instructed her, opened US dollar accounts with an initial deposit of US$500 (S$679) each for the four men who were with him that day.

Ms Deguito never saw the four men again, and their accounts remained dormant for nearly a year.

 

Then, on Feb 5 this year, the accounts lit up, receiving some US$81 million from New York. The money was part of nearly US$1 billion that hackers had tried to steal from accounts held by Bangladesh's central bank in New York, in one of the biggest digital thefts in history.

Lawmakers in the Philippines have been investigating the massive cyber caper to determine how millions of dollars could have flowed so easily into the Philippine banking system and moved to points unknown.

Amid circumstances that have yet to be made clear, Ms Deguito, on Feb 5, withdrew all US$81 million that went into the four accounts and transferred it to a US dollar account she opened only on Feb 1 under the name of Mr William Go, a local retail tycoon.

That same day, she withdrew 20 million pesos (S$585,000) in cash from another of Mr William Go's purported accounts.

Then came the weekend lull on Feb 6 and 7, and the Chinese New Year holiday on Feb 8. On Feb 9, the Bangladesh central bank sent an e-mail asking RCBC to freeze the US$81 million. RCBC forwarded the e-mail to Ms Deguito's branch.

Yet, throughout the day, Ms Deguito moved all US$81 million to accounts held in her branch by remittance firm Philrem, according to the Anti-Money Laundering Council.

She then sent Philrem instructions by phone to transfer over US$50 million to two casino operators - Bloomberry Resorts and a related casino, and Eastern Hawaii Leisure Company - and deliver US$31 million in cash to a certain Mr Xu Weikang, a middleman who brought Chinese high rollers to Manila's casinos.

RCBC reserve officer Romualdo Agarrado said in his testimony that he overheard a distraught Ms Deguito saying later: "I'd rather do this than me and my family getting killed." By Feb 13, Philrem had finished distributing all US$81 million.

The casinos said all the money was played out on their tables. On Feb 29, the Philippine Daily Inquirer ran a story that brought everything out of the shadow.

While the Senate's ongoing hearing has brought out more details regarding the heist, the extent of it still remains fuzzy. But most pundits agree a branch manager five levels down in the hierarchy could not have perpetrated it on her own.

A banking industry veteran told The Sunday Times that RCBC's head office could have done more than just send an e-mail on Feb 9 to prevent Ms Deguito from moving the US$81 million out of her branch, especially as it had already been flagged by Dhaka.

RCBC has said it is investigating two senior executives who directly supervised Ms Deguito.

Mr William Go has insisted that his signatures on the account used to transfer the US$81 million were forged. He denied having anything to do with RCBC, but the bank's lawyers had informed the Senate that an account opened in 2014 had over 100 transactions involving his company Centurytex Trading.

Then, there is Mr Wong. Days after news of the heist broke out, he flew to Singapore. His lawyer said he went there for "medical treatment", but that he would return to the Philippines to testify before the Senate on March 29. Everyone is eager to hear whatever he has to say.

A version of this article appeared in the print edition of The Sunday Times on March 20, 2016, with the headline 'Banking on lax checks in huge cyber caper'. Print Edition | Subscribe