Bangladesh says Philippines' Duterte commits to return of cyber heist money

A security guard stands beside a logo of the Central Bank of the Philippines in Manila.
A security guard stands beside a logo of the Central Bank of the Philippines in Manila. PHOTO: REUTERS

MANILA (Reuters) - Philippine President Rodrigo Duterte has given a commitment that the US$81 million stolen from the account of Bangladesh Bank in New York and traced to bank accounts in Manila would be returned, the Bangladesh ambassador to the Philippines said.

“We are very hopeful that we will get the total US$81 million. The reason is I got a commitment from the president himself,”Ambassador John Gomes told a media briefing in Manila on Friday.  

Cyber criminals succeeded in stealing US$81 million from Bangladesh Bank’s account at the Federal Reserve Bank of New York, transferring the funds to four accounts at Manila’s Rizal Commercial Banking Corp (RCBC), which was then laundered through the city’s casinos, according to investigators.  

A Bangladesh central bank team currently in Manila to hasten the recovery process has said they were close to getting back only US$15 million of the money stolen in February.

“We know substantial amounts of money have been frozen by authorities over here,” Bangladesh Bank lawyer Ajmalul Hossain said.  

Bangladesh’s finance minister might come to the Philippines to meet Duterte and seek his help in the recovery of the money, Gomes said.  

Gomes said the bank felt that RCBC should be held responsible because they did not follow a stop-payment request from the Bangladesh Bank.  

Minutes before the Bangladesh officials held a briefing, the Philippine central bank said it would fine RCBC a record 1 billion pesos (S$28.6 million) in relation to the cyber heist.  

The central bank said in a statement that it was the largest amount it has ever approved “as part of its supervisory enforcement actions” on a bank.  

RCBC said separately that it will pay the fine over a one-year period.  

Hossain said the Bangladesh central bank would sue RCBC if it was not able to recover the entire US$81 million.  

Gomes also said they would sue Philrem Service Corp, a remittance company that anti-money laundering investigators said was used to transfer some of the US$81 million. “I think they have to return the money. They have the responsibility to return the money or face the consequence,”Gomes said of Philrem.  

A lawyer for Philrem, who speaks on behalf of the company, was not immediately available for comment.  

The last Philippines Senate hearing into the heist ended in May as a new government came to power under Duterte. No date has been announced for a resumption, but Gomes said they had asked Senate President Aquilino Pimentel III to reopen the hearings.  

RCBC has challenged Bangladesh Bank to take it to court. The bank told Reuters that the "Philippine side has done its part" and that the transfers were made based on authenticated instructions over payments network SWIFT.

The hackers used stolen Bangladesh Bank credentials to issue the instructions.

"Going to court instead of the media and various Philippine government agencies is the proper procedure," RCBC said in a statement. "We will welcome that complaint as RCBC did not keep any of the funds that were released by the NY Fed and sent via three global banks after authentication by SWIFT."

The statement added that Bangladesh Bank must follow the"correct legal procedures instead of unduly burdening the Philippine government".

A source close to Bangladesh Bank, who has direct knowledge of the legal position of the central bank, said it would sue RCBC if ongoing efforts to recover the money fail.

Bangladesh Bank spokesman Subhankar Saha could not immediately be reached for comment.