Fallout Over Hack by N. Koreans Hits Philippines Bank

MANHATTAN (CN) – Bangladesh’s central bank brought a federal complaint against one of the largest banks in the Philippines on Thursday to recover $80 million that it says was stolen from North Korean hackers.

Second Secretary of the Bangladesh Embassy in Manila Probash Lamarong; Anti-Money Laundering Council Director Julia Bacay-Abad; and council member Emmanuel Dooc (from left) open a case containing U.S. dollars on March 31, 2016. The money was returned by Chinese casino junket operator Kam Sin Wong to Bangladesh and Philippine AMLC officials in Manila, Philippines. Bangladesh’s central bank has filed a lawsuit in the U.S. District Court for the Southern District of New York against Philippine private bank over the heist of $81 million from Bangladesh Bank’s account with the Federal Reserve Bank of New York. The head of Bangladesh Bank’s Finance Intelligence Unit confirmed the lawsuit against the Rizal Commercial Banking Corp. (Jason Arlan Raval/Bangko Sentral ng Pilipinas via AP)

At the time it was stolen from Bangladesh Bank, says lawyer John Sullivan of Yehudah Gordon, the money was being held in an account at the Federal Reserve Bank of New York. 

Bangladesh Bank say it was hacked by the same North Koreans “who had already broken into the computer systems of Sony Pictures Entertainment.”

“To accomplish [the elaborate transfer],” according to the complaint, “the North Korean hackers aligned with co-conspirators in the Philippines, most importantly, RCBC, a bank in the Philippines that also had (and, on information and belief, continues to have) correspondent bank accounts at intermediary banks in New York City.”

RCBC, whose full name is Rizal Commercial Banking Corp., has hired the firm Quinn Emanuel to defend it.

Tai-Heng Cheng, an attorney with that firm, issued a statement Friday that describes the lawsuit as a “baseless” and “thinly veiled PR campaign.”

“Not only are the allegations false, they don’t have the right to file here since none of the defendants are in the U.S.,” Cheng said in the statement. “We will show this suit is nothing more than a political stunt by the Bangladesh Bank to try to shift blame from themselves to RCBC.”

Aside from RCBC, the lawsuit named RCBC executives, like Maia Santos Deguito who was convicted of money laundering and sentenced to 4 to 7 years in prison, and 25 unknown conspirators as defendants in the lawsuit. 

A total of $101 million was stolen from the Bangladesh Bank, but $20 million of it went to Sri Lankan accounts and has since been returned.

The $81 million that was allegedly sent to the Philippines was withdrawn, converted to pesos, then gambled in a number of casinos before authorities could track it.

“Once the stolen funds were in the Philippines, RCBC and other co-conspirators, including questionable businesses, casinos, and individuals, executed a series of intentionally  complicated account transfers and foreign exchange transactions to launder the bank’s stolen funds, all of which were eventually withdrawn from RCBC and brought to casinos and gambling junkets in the Philippines into which they disappeared,” the complaint states.

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