RCBC sues ‘vicious’ Bangladesh Bank over heist claim

March 12, 2019 - 6:45 PM
Security guards outside RCBC
In this photo: A security guard stands guard outside a branch of Rizal Commercial Banking Corporation, or RCBC, in Parañaque city, Metro Manila, Philippines August 2, 2016. (Reuters/Erik De Castro, file)

A Philippine bank has filed a lawsuit accusing Bangladesh’s central bank of defamation, hitting back at what it says are baseless claims of its complicity in the world’s biggest cyber heist.

In February 2016, criminals used fraudulent orders on the SWIFT payments system to steal $81 million from the Bangladesh central bank’s account at the Federal Reserve Bank of New York.

The money was sent to accounts at Manila-based Rizal Commercial Banking Corp (RCBC) and then vanished into the casino industry in the Philippines.

RCBC said its reputation had come under a sustained “vicious and public attack” by Bangladesh Bank. It is seeking at least 100 million pesos ($1.9 million) in damages.

“Bangladesh Bank has embarked on a massive ploy and scheme to extort money from plaintiff RCBC by resorting to public defamation, harassment and threats geared towards destroying RCBC’s good name, reputation, and image,” it said in a statement on Tuesday, citing the civil court filing on March 6.

It said the motive was to get RCBC to return money it neither had, nor owed.

Bangladesh Bank declined to comment.

Barbs and blame

The lawsuit is the latest in a slew of barbs and blame-trading between the two banks.

Last month, the Federal Reserve said it had agreed to help Bangladesh as it sues to recoup losses from the heist, offering “technical assistance”. SWIFT also agreed to help the bank rebuild its infrastructure after the breach.

Bangladesh Bank filed a lawsuit in the U.S. District Court in Manhattan earlier this year, accusing RCBC of involvement in a massive conspiracy to steal its money.

A hunt for the culprits has made little progress and Bangladesh Bank has managed to get back roughly $15 million, mostly from a Manila gaming junket operator.

In the first conviction in the case, a Philippine court in January found a former RCBC bank branch manager, Maia Deguito, guilty on eight counts of money laundering.

Deguito was sentenced to between 32 years and 56 years in jail, and was ordered to pay a total fine of about $109 million, although she remains free on bail pending appeal. —Reporting by Martin Petty; Additional reporting by Ruma Paul in DHAKA; Editing by Neil Fullick