Cyber Heist: Bangladesh Bank Will Appeal against US Court Verdict

The US court has given a partial verdict in the 2016 cyber heist, according to Bangladesh Bank. The accused in the case are Rizal Commercial Banking Corporation of the Philippines (RCBC) and 19 individuals and entities. Two of them have been acquitted.

Bangladesh Bank said this in a statement on Wednesday. The case filed by Bangladesh Bank in a US court was dismissed on April 6, according to a report in the Philippine news portal Philstar on Monday. Two days later, Bangladesh Bank issued a statement yesterday.

According to Bangladesh Bank sources, it was decided yesterday that Bangladesh Bank will appeal against the partial verdict in the next one to two weeks.

Bangladesh Bank filed the case in a New York court in the United States about two years ago to recover the stolen money from the reserve. The main accused in the case is RCBC of the Philippines. The RCBC appealed to a New York court, claiming that it did not have "sufficient jurisdiction" to prosecute. Bangladesh Bank said in a statement that its verdict has not been made yet. Cozen O'Connor, a New York-based law firm, is hopeful that a New York court will rule in favor of the Bangladesh Bank. This has also been said in the statement.

Bangladesh Bank said in a statement yesterday that Cozen O'Connor gave notice to the defendants after the lawsuit was filed. After receiving the notice, five defendants, including RCBC, filed a petition in the court seeking dismissal of the case, claiming that they did not have sufficient jurisdiction to proceed with the case. Resort and casino operators Bloomberg and another casino operator, Eastern Hawaii, and a casino entrepreneur named Kim Aung filed a petition on July 14, 2021. Two months later, on October 14, a hearing was held on the dismissal of RCBC, Lorenzo Tan, and Raul Tan.

Bangladesh Bank said in a statement that the New York County Supreme Court had given a partial verdict in the case on April 8 and that it had acquitted Bloomberg and Eastern Hawaii. However, casino businessman Kim Aung's application was rejected and he was asked to respond to the allegations of Bangladesh Bank. The court has not yet ruled on RCBC, Lorenzo Tan, and Raul Tan.

Bangladesh Bank filed a case on May 26, 2020, to recover $66.4 million out of the $81 million stolen from the reserves. The 103-page statement alleges that the money was removed through a complex conspiracy over the years. RCBC and 19 individuals and organizations were named as defendants in the case. The reserve of Bangladesh Bank kept in the Federal Reserve Bank of New York (Fed) was stolen on February 4, 2016, through cyber hacking. The money was transferred to RCBC by sending fake messages to the Swift system.

Bangladesh Bank said in a statement that RCBC's application was also rejected once in a case filed in a US federal court. The order stated the theft of reserves from the Federal Reserve Bank of New York. Fraudulent payment orders, various types of stolen money transactions, and remittances from these accounts have all been proven beyond a reasonable doubt to be from New York.

Bangladesh Bank lawyer Ajmalul Hossain QC told the media yesterday that some parties had conspired to steal the money. So the case can go on. Apart from that, two courts have given two types of verdicts.

When asked what action would be taken now, Ajmalul Hossain QC said, 30 days is the time to appeal. It was decided today (yesterday) that an appeal will be lodged next week.

According to data from Bangladesh Bank, $81 million of the reserve's local currency went to pesos in three casinos. Where did the money flow from the casino, It is still unknown. The Philippine government recovered $10.5 million from the owner of one of the casinos and handed it over to the Bangladesh government. The case is pending for recovery of the remaining $60.64 million.

Former Governor of Bangladesh Bank Salehuddin Ahmed told the media that others will try to get an exemption by following the example of the two exempted persons. The central bank will have to take steps to prevent this from happening. It is also unfortunate that the CID investigation report on this incident has not been completed in so many years. As per the recommendation of the committee headed by former governor Mohammad Farasuddin, no administrative or legal action has been taken against anyone so far.

The Philippine government has filed a lawsuit against their country over the theft of reserves. The case was decided in January 2019. RCBC branch manager Maya Santos Degitok was found guilty. She is also accused in the case filed by Bangladesh Bank.

Bangladesh Bank also filed a case with Motijheel Police Station in 2016 after the theft of reserves. The Criminal Investigation Department (CID) is still investigating the case.