Being unnerved over the huge $100m taken away by hackers from its overseas account with a US bank, Bangladesh Bank (BB) yesterday said a portion of the hacked money was already brought back and rest portion’s destination was already traced out.
“BB Financial Intelligence Unit is in active touch with the Philippines Anti Money Laundering Authority to recover the rest portion,” said the BB in a statement issued after a month into the incident.
However, the central bank did not disclose the amount of hacked money.
The statement also stated that a legal step will be taken to bring back the money immediately after completing investigation currently being carried out by the Philippines Anti Money Laundering Authority and if needed World Bank’s Stolen Assets Recovery process will be adapted.
For the sake of fair probe, the information collected through investigation from and outside of the country has not been disclosed, it said.
“The cyber attack is very new for Bangladesh, though such incident is very familiar in the banking system of the developed world,” said the central bank.
In sharp contrast with the BB statement, sources said BB itself is in doubt over getting back money stolen by suspected Chinese hackers to the Philippines from the central banks overseas account with a bank in New York, despite desperate efforts to recover the stolen money.
“It is very tough to bring back hacked money which has already exchanged many hands and it is a matter of legal complexities,” said a senior central bank official requesting not to be named.
He noted that Bangladesh Bank has cyber security loopholes through which hackers get access to the account.
Over the “hide and seek” seemingly played by the central bank to make the matter public, Finance Minister AMA Muhith said: “We have had no knowledge about the matter till today but the incident happened on February 5. Bangladesh Bank authority should have let me inform about the matter earlier.”
“I could not say any more about it because I am yet to receive any report from the Bangladesh Bank. I have known this from newspaper reports,” the finance minister told reporters at his resident.
A central bank official said a portion of the money transferred to Sri Lanka has been brought back.
According to BB, it has currently around $28bn foreign currency reserve and 30% of which is in the form of liquid asset and the rest has been invested in bonds and gold in overseas financial markets.
The Inquirer.net, a Philipnes news web portal, reported on March 4 that the National Bureau of Investigation of Philippines was investigating a Chinese-Filipino who allegedly played a key role in the laundering operation.
The Chinese-Filipino, who is known to the gambling community and has business interests in Manila, is suspected to be the conduit of the laundering activities, the report said referring to a source privy to the investigation.
On February 28, it reported that the financial regulators of the South East Asian country were investigating what could be the biggest single money laundering activity ever uncovered in the Philippines—a total of $100 million that was brought into the country’s banking system.
The money was sold to a black market foreign exchange broker, transferred to at least three large local casinos, sold back to the money broker and moved out to overseas accounts, all in a matter of days, it said.
More importantly, the suspected illicit funds are said to be part of funds stolen by computer hackers recently from the accounts of a bank overseas, which Inquirer sources said was a financial institution in Bangladesh, said the report.
“The initial report is that some funds went missing in Bangladesh and the suspicion is that this bank—or the central bank of that country, itself—was hit by hackers based in China,” reads the report.
The suspected illicit funds first entered the Philippine financial system through a Makati City branch of Rizal Commercial Banking Corp through a transaction handled by one of its branch managers with foreign exchange broker Philrem.
“Once converted into pesos, the funds were consolidated from five individual bank accounts into a single corporate account of a Chinese-Filipino businessman who runs a ‘junket operation’ flying in high network gamblers from overseas to play in local casinos,” the report said.
The bank immediately filed a suspicious transaction report with anti-money laundering cell once its officials got wind of the activity, thus alerting regulators, said the report.
The funds are owned by a Macau-based client of the junket operator, the report said referring to gambling industry sources, adding that these funds were used to either ‘buy chips’ or ‘pay for casino losses’ incurred at Solaire Resort and Casino, City of Dreams Manila and Midas Hotel and Casino.