SWIFT says helping Bangladesh Bank rebuild network after cyber heist

NEW DELHI - International payments network SWIFT said on Saturday it had signed an agreement with Bangladesh's central bank to help it rebuild its infrastructure after hackers used it to steal $81 million in 2016 in the world's biggest cyber heist.

Unidentified hackers, suspected to be from North Korea, carried out the heist by breaching Bangladesh Bank's systems and using the SWIFT network to send fraudulent money transfer orders to the New York branch of the US central bank, with which the Dhaka bank has an account.

SWIFT's comments came after the New York Fed on Friday agreed to provide "technical assistance" to Bangladesh Bank in its lawsuit against Manila-based Rizal Commercial Banking Corp (RCBC). RCBC was used to funnel the money, much of which disappeared into the casinos of the Philippines.

RCBC has called the legal action Bangladesh Bank filed on Thursday as beyond the US jurisdiction, "completely baseless" and "nothing more than a thinly veiled PR campaign" to shift blame from itself. 

"SWIFT, the New York Fed and Bangladesh Bank have worked together since the cyber fraud event occurred ... to recover the entire proceeds of the crime and to bring the perpetrators to justice in cooperation with law enforcement from other jurisdictions," SWIFT said in a statement to Reuters.

The firm would continue to lend its support to international efforts to protect the global financial system from future cyber attacks, it added.

SWIFT - the Society for Worldwide Interbank Financial Telecommunication, a cooperative used by thousands of financial institutions around the world - did not say if it would also help Bangladesh Bank with the court case in New York.

A person familiar with the technical assistance agreement said the Fed would prepare affidavits and clear employees to testify at hearings or a trial, and also allow Bangladesh Bank to interview employees. It would also provide relevant non-privileged documents and information to Bangladesh Bank or to the court.

Bangladesh Bank lawyer Ajmalul Hossain QC declined to comment on SWIFT's role in the legal case against RCBC.

In its suit filed with the US District Court in Manhattan, Bangladesh Bank accused RCBC and dozens of others, including several top executives, of involvement in a "massive" and "intricately planned" multi-year conspiracy to steal its money.

source: news.abs-cbn.com

Bangladesh to sue RCBC over $81-M cyberheist

DHAKA - Bangladesh will file a lawsuit in a US court on Wednesday against Philippine bank Rizal Commercial Banking Corp (RCBC) over its role in one of the world's biggest cyber-heists, the Bangladesh central bank governor said.

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

The money was sent to accounts at Manila-based RCBC and then vanished into the casino industry in the Philippines.

Fazle Kabir, governor of the Bangladesh Bank, said the lawsuit would be filed in the US District Court for the Southern District of New York.

"All necessary processes have been completed and Bangladesh signed an agreement Tuesday night with the New York Fed Bank to assist Bangladesh in handling this case," Kabir told reporters.

For its part, RCBC has previously said the cyber heist was an inside job and Bangladesh Bank was engaging in a cover-up by maligning it. 

On Wednesday, RCBC said in a statement it had engaged a top New York law firm to handle its defense.

"We welcome this complaint, as it is an opportunity for RCBC to put on record again that it was a victim of what was started in Bangladesh by still unnamed persons," the bank said.

This month a Philippine court found former RCBC branch manager Maia Deguito guilty on eight counts of money laundering in connection with the heist and sentenced her to a jail term ranging from 32 to 56 years. 

The Philippine central bank fined RCBC a record one billion pesos ($20 million) in 2016 for its failure to prevent the movement of the stolen money through the bank. 

A former treasurer of RCBC and five other workers at the branch where the cash was withdrawn face money laundering charges.

Just $15 million of the stolen money has been recovered from a Manila junket operator, a role that involves marketing casinos to VIPs.

source: news.abs-cbn.com

NY Fed, Bangladesh central bank to resume normal money transfers - sources

NEW YORK - The Federal Reserve Bank of New York and Bangladesh's central bank have agreed to withdraw additional payment security measures put in place after one of the world's biggest cyber heists, the theft of $81 million from Bangladesh Bank's account at the Fed, two sources said.

The decision comes after SWIFT, the global financial messaging platform, promised in May to strengthen security on software tools used by its clients and to develop new tools that would spot a compromised account and raise a red flag when a payment instruction deviates from normal patterns.

The decision was taken at a meeting in New York this week between officials from Bangladesh Bank, the New York Fed and SWIFT, said a source close to Bangladesh Bank who has direct knowledge of the matter. They have agreed on a tentative timeline to withdraw the additional security measures but the source declined to give details.

"(The New York Fed and Bangladesh Bank) want to use (only) SWIFT for secure communication," said the source, declining to be named as he was not authorised to brief the media. "We are talking about normalising our communication channels as soon as possible."

The New York Fed and SWIFT could not immediately be reached for comment.

In early February, hackers used stolen Bangladesh Bank credentials to send three dozen SWIFT messages to transfer nearly $1 billion from its Fed account, eventually managing to route $81 million to a bank in the Philippines. Most of the money was laundered through casinos in Manila and remains missing.

Following the heist, Bangladesh Bank initiated a new protocol under which the Fed could only clear any SWIFT request from Dhaka after a voice authentication. Fed officials had to call one of two or three Bangladesh Bank officials whose voice samples were shared with the Fed.

A senior Bangladesh Bank official in Dhaka, who declined to be named, said more time was needed "to improve the system" before moving back to a SWIFT-only transfer mechanism.

Both sources said the New York Fed wanted to do away with the additional measure as it delayed genuine transfer instructions.

SWIFT has told Bangladesh Bank its system was secure and that the Asian bank needed to tighten its own defenses to prevent criminals from hacking into their computer systems.

Bangladesh Bank spokesman Subhankar Saha said he was not aware of the agreement and would comment only after the bank's delegation came back from the United States.

The bank said in a statement on Wednesday that its officials discussed with the New York Fed and SWIFT "certain technical details" of the heist to enhance their understanding of how the fraud occurred and "steps that have been and will be taken to remediate the event."

The Bangladeshi delegation also requested the New York Fed to put more pressure on the Philippines' Rizal Commercial Banking Corp (RCBC), to recover the rest of the stolen money, said the source close to Bangladesh Bank. The funds were routed to four accounts at the bank before they disappeared into casinos in the city.


The New York Fed in June wrote to the Philippines' central bank, prodding it to help Bangladesh Bank retrieve the money.

Bangladesh Bank officials believe the nudge from the Fed was one of the reasons the Philippines central bank this month slapped a record fine of P1 billion ($21 million) on RCBC in connection with the heist.

source: www.abs-cbnnews.com

Conflicting statements muddle $81-million dirty money trail

Conflicting statements during a Senate hearing on Tuesday failed to shed light on how $81 million that was stolen from Bangladesh's central bank ended up in Philippine casinos.

The hearing opened under a cloud of suspicion after a lawyer denied authenticating the sworn statement of Mark Palmares, a courier of foreign exchange broker Philrem, who detailed how he delivered a portion of the money to Solaire casino.

Philrem owners Michael Bautista and Salud Bautista, Rizal Commercial Banking Corp (RCBC) branch manager Maia Deguito and casino junket operator Kim Wong later gave contradicting accounts to senators.

Unidentified hackers breached the Bangladesh central bank's account with the Federal Reserve in February and wired $81 million to RCBC. The money passed through Philrem before ending up in several casinos.

Senator Bam Aquino asked the Bautista couple, Deguito and Wong if they were willing to open their phone call logs to verify their testimonies. All four agreed.

Wong alleged that he received instructions by phone from Michael Bautista, asking him to pick up money from his house.

"Nagkausap kami sa phone at sabi niya may ganitong pera, at kunin na daw sa bahay," said Wong.

Bautista, however, said he never spoke to Wong on the phone.

Salud Bautista, on the other hand, claimed it was Deguito who instructed her to transfer money to Wong. Deguito denied the allegation.

"Wala akong instructions about cash deliveries, I would like to believe na derecho na sila [Wong and Philrem] nag-uusap. Ang instruction lang sa akin was to credit everything to Philrem," she said.

Of the $81 million, $62 million was converted into pesos and transferred to casinos while the remaining $18 million was delivered to another casino agent, Weikang Xu, whose whereabouts are unknown, according to Salud Bautista.

Bangladeshi authorities said Monday they were investigating 12 Filipinos for alleged involvement in the heist.

The daring caper exposed loopholes in Philippine anti-money laundering and banking laws that make the country a dirty money destination.

Casinos are exempt from scrutiny by the Anti-Money Laundering Council under present laws.

Also during the hearing, Deguito said admitted she lied to RCBC in her reply to a memorandum asking her to explain the questionable deposits.

Degutio said it was Wong, not a certain Jessie Christopher Lagrosas as she had told RCBC, who asked her to transfer the stolen money to the account of businessman William Go.

"During that time that I answered the show cause I wasn't ready to reveal the personalities behind those referred accounts," said.

When asked by Senator Serge Osmeña III if she lied in her response to the RCBC show cause order, Deguito said, "If you will consider that lying, yes, I would acknowledge."

RCBC has filed criminal charges against Deguito and former RCBC Jupiter branch staff Angela Torres for allegedly opening the accounts that received the money under fictitious names.

source: www.abs-cbnnews.com

RCBC chief to take steps to return Bangladesh funds

MANILA - Rizal Commercial Banking Corporation (RCBC) Lorenzo Tan on Tuesday promised to urge the bank's board members to return part of the $81 million stolen from Bangladesh if they are found liable in laundering the fund.

At a hearing led by the Senate Blue Ribbon Committtee, Tan first admitted that RCBC's market value has fallen after four local banks in their Jupiter branch received the stolen money last February 5.

Senator Ralph Recto suggested that RCBC's market position could be improved if it pledges to return some $50 million out of the total funds.

"Assuming that the RCBC gives this to the Bank of Bangladesh, your P5 billion profit minus P2.2 billion ($50 million), kita pa rin kayo ng P3 billion," Recto said.

"Maybe your market price will improve to what it used to be and you would gain from that anyway. Maybe your stock price will hit whatever value and you make the protocol corrections."

In reply, Tan conceded that, "Our business is an actuarial business... We either lose money on bad loans, bad trades or operational losses like this one."

He added that on the average, RCBS provisions P1 billion to P2 billion every year on losses from bad transactions like those involving the Bangladesh funds.

Given this, he promised: "If we're found liable, I would recommed to the board to set aside a certain amount of money."

- ABS-CBN News Channel, 12 April 2015

source: www.abs-cbnnews.com

RCBC's key shareholders increase stakes

MANILA  - Rizal Commercial Banking Corp.'s (RCBC) two biggest shareholders have bought an extra $9.48 million worth of stock, taking their combined stakes to 65.02 percent, the Philippine lender said in a stock exchange filing on Wednesday.

RCBC is at the center of a Senate investigation into a cyber heist in which $81 million stolen from the Bangladesh Bank's account at the U.S. Federal Reserve Bank of New York was allegedly deposited at RCBC.


In the filing, RCBC said top shareholder Pan Malayan Management and Investment Corp last week bought 8.8 million shares at 30 pesos apiece, raising its stake to 42.31 percent from 41.68 percent.

Taiwan's Cathay Life Insurance, a subsidiary of Cathay Financial Holding Co Ltd, bought 5.8 million shares also at 30 pesos apiece, taking its stake to 22.71 percent from 22.3 percent.

The price of RCBC shares fell to as low as 28.75 pesos last month after the bank was placed under investigation. The stock fell as much as 3.8 percent to 30.70 in Wednesday morning trade, versus a 0.6 percent decline in the broader market.

"The principals are very confident of the bank. They used their cash to buy out investors that wanted to exit," said Augusto Cosio, president at fund manager First Metro Asset Management.

RCBC's reputation may have suffered from the heist, but its balance sheet remains attractive given its clients and depositors, Cosio said.

A spokesman at Cathay Financial told Reuters it was "confident in (RCBC's) chairman and management team."

"The Philippines' market is booming. It is only one of its branches that is being investigated. And RCBC is fully cooperating with investigators," the spokesman said.

Unidentified hackers allegedly stole the money in early February and channelled it to casinos and gambling agents in the Philippines via a Manila branch of RCBC.

RCBC launched its own investigation and filed a case against two former employees.

source: www.abs-cbnnews.com

Senate digs deeper into $81-M laundering heist

MANILA - Sacked bank manager Maia-Santos Deguito, junket operator Kim Wong and representatives of PhilRem Services Corp. - all key personalities tagged in an $81-million laundering heist - are expected to face off at a Senate hearing Tuesday.

Speaking to radio dzMM, Senate President Pro-Tempore Ralph Recto said this will be the first time that the three parties will all be present during the Senate investigation on how stolen funds from the Bangladesh Bank reached Philippine banks and casinos.

"Maganda itong pagdinig na ito dahil maghaharap-harap sila mamaya," Recto predicted.

The three parties earlier presented conflicting accounts of their alleged involvement in one of the world's biggest cyber heist.

At the third Senate hearing last Tuesday, Wong said that Deguito and foreign nationals Gao Shuhua and Ding Zhize were responsible for bringing in the "dirty money" into the Philippines.



He also claimed that Deguito alone approved the documents for the RCBC dollar accounts opened in May 2015, which received the stolen funds from the Bangladesh Bank in February 2016.

Wong added that he only referred one foreigner - Gao - to Deguito, contrary to her earlier claim that she met the owners of the four dollar accounts at Solaire casino through Wong's referral.

The junket operator also said that Deguito delivered at least P20 million in cash to him at the Solaire hotel on February 5. Another P80 million, he said, was delivered to him by Philrem's Concon Bautista on the same day.

This runs counter to the statement of former RCBC Jupiter-Makati branch senior customer relationship officer Angela Torres who said that the P20 million was loaded into the car of another businessman, William Go.

Philrem president Salud Bautista also opposed Wong, saying that the money was received by Weikang Xu, who has been described as a "registered" junket agent in the gaming business.


 The Bautistas also denied Wong's claim that they still hold an estimated $17 million from the illegal funds.

In the interview, Recto said the Senate will trace the real connections of the names tagged in the scandal.

"We want to dig deeper. Ano ba iyung relationship? Kasi lahat sila magkaka-kilala, kung tutuusin natin," he said.

The Senate has invited Bureau of Internal Revenue (BIR) Commissioner Kim Henares to today's hearing to shed light on the tax compliance of the involved parties.

Recto added that the hearing will also attempt once again to trace the remainder of the stolen funds that could be returned to Bangladesh.

The fourth hearing will also tackle the scam's toll on overseas Filipino workers (OFWs) as Philippine banks face tighter scrutiny from their foreign counterparts.

 Watch the livestream of the hearing at: www.livestream.com/anctelevision.

source: www.abs-cbnnews.com

Osmena grills RCBC lawyer on bank secrecy law

MANILA - Senator Serge Osmeña and Macel Fernandez-Estavillo, head of RCBC's legal and regulatory group, got into a heated debate about the country's bank secrecy law, which Estavillo said hinder the bank from discussing details of the deposits linked to the $81-million money laundering heist.

At the resumption Tuesday of the Senate Blue Ribbon committee inquiry into the heist, Osmeña grilled Estavillo on the bank's role in the transaction of stolen funds from the account of the Bangladesh Bank.

Estavillo said that under the bank secrecy law, RCBC has to protect the rights of its clients and therefore could not speak about the deposits.

However, Osmeña argued that the owners of the accounts are fictitious, which means there is no client to protect.

“We understand that RCBC has already found out that those five accounts don’t exist—these persons don’t exist. So therefore, there is nobody to protect,” the senator said.

Estavillo said the bank would still need a court order determining that the accounts are indeed fictitious. She said the bank is unable to discuss specific deposits because all deposits are confidential under the bank secrecy law.

“The law gives the bank an absolute obligation unless there are exceptions, apart from the knowing voluntary and written consent of the depositor, banks may actually be required to divulge information in certain instances like impeachment, bribery, dereliction of duty of public officials, there are specific cases,” she said.

Estavillo added that the bank did not have the power to freeze the million-dollar deposits nor did it need to raise the matter to the bank's top officials.

"If we have ample notice, the only rights that are given to us would be to file an [STR] suspicious transaction report...we can only hold it for a period. Under the law, we have not been given any right to retain the funds," she said.

To which Osmeña responded, "I’m afraid many bankers will disagree with you."

The senator said he has talked to several bankers and the consensus he received was that "they would exercise discretion and stop [the transaction]."

Estavillo said, however, that the law applies to all banks and “that’s why it would be good to amend the laws to give more teeth to the banks because even the regulators do not have that authority."

"I wish that it would be the case because it would make our jobs easier," she said.

'IT AND HUMAN FAILURE'
RCBC president and chief executive (on leave) Lorenzo Tan, meanwhile, believes the anomalous transaction pushed through due to both human and computer failure.

He said the bank's threshold of suspicious transactions is at P1 billion (about $20 million), but it still depends on the "instincts" of bank employees in determining what transactions to report.

“Thresholds can only give you protection at a certain point because people will find out what your threshold is and they will remit below that,” Tan told the senators at the hearing.

“What will really catch dirty money is having intelligent systems in your bank, like what you have in global banks today. Even if you have modern software, you still need instincts to kick in—your compliance people, your operations people, your sales people, they all have to use their judgment,” he added.

Tan again apologized that its staff have been linked to the scandal, but said it "can happen again" unless stricter measures and a more advanced computer system are put in place.

“We have the IT controls and the human controls, and unfortunately, it failed in the end in the execution,” Tan said.

"This experience, we have made changes to our present system to prevent this from happening again. If you ask my opinion, it can happen again. Philippine banks have to upgrade to cognitive systems. We have to look at our employee behavior, what time do they go in and what time they go out, what they do outside.
We have to look at transaction behavior. Only computers can do that. If you have a bank and envision 20-40 million customers times x number of transactions per second, there is no way you can have human intervention along the way."

The bank earlier issued an apology to the public after its employees were linked to the $81-million money laundering heist.

It added that it is conducting its own inquiry to identify and address any weaknesses in its controls and operations, and it will take appropriate actions against any bank officer or staff found guilty of negligence.

source: www.abs-cbnnews.com

Kim Wong tags 2 foreigners in $81-M heist

MANILA - Casino junket operator Kim Wong on Tuesday washed his hands of the $81-million laundering heist and instead blamed dismissed Rizal Commercial Banking Corp. (RCBC) branch manager Maia Santos-Deguito and two foreigners.

Speaking before the Senate, Wong said one of the two foreigners was a junket operator and a "high-roller" in the casino industry.

“Dalawang foreigners ang nagpasok ng $81 million. Isa sa kanila ay matagal ng labas-pasok sa Pilipinas at kilalang junket agent at isang high roller,” he said.

Wong said he had prepared for the Senate a sealed envelope containing copies of the passports of the two foreigners.

Senators prodded him to open the envelope and disclose the names of the two foreigners. Wong later identified the two as Gao Shuhua from Beijing and Ding Zhize from Macau, China.

Wong said Gao had been his "junket agent" since 2007. He also said Gao once lost P450 million during a week of gambling in Solaire.

He also claimed that Deguito alone approved the documents for the RCBC dollar accounts opened in May 2015, which received the stolen funds from the Bangladesh Bank in February 2016.

Wong added that he only referred one foreigner - Gao - to Deguito, contrary to her earlier claim that she met the owners of the four dollar accounts at Solaire casino through Wong's referral.

Wong said he met Deguito and Gao at his office in Solaire in 2015 to open the dollar account.

During their meeting, Wong claimed that Deguito suggested a corporate account and that she needed the names of 5 people to open the account. He also claimed that Deguito asked for $2,500 to open the accounts, which Gao approved.

DAY OF HEIST

In his testimony, Wong claimed that he received a message from Gao on February 4, 2016 about his plan to invest in the Philippines.

He said Gao wanted to close his souring casino business in Macau and invest instead in casino junkets in Manila.

The next day, Wong said he received instructions from Gao and Ding that they would be getting a huge amount of money in the dollar accounts in Deguito's branch. When Wong initially checked with Deguito, however, the money had not come in.

Deguito then called several times to say that several dollar deposits - $6 million, $25 million, $30 million and $20 million - had come in.

This jibes with the account of Sen. Teofisto Guingona III that a total of 35 payment instructions came out allowing the transfer of funds from the Bangladesh Bank account in the New York Federal Reserve. Only five payment instructions, however, were allowed before the transactions were stopped.

$850-M could have entered RCBC: Senate

Wong said of the $81 million stolen funds, an estimated $63 million went to Solaire while an estimated $17 million went to Philrem.

Wong said at least 80 million pesos in cash were then delivered by Philrem's Concon Bautista and another 20 million pesos in cash by Deguito on the same day, February 5.

Philrem president Salud Bautista, however, said she personally delivered 80 million pesos, and not 90 million pesos, to Solaire. She said the money was received by Weikang Xu, who has been described as a "registered" junket agent in the gaming business.

WONG PICKED UP MONEY AT BAUTISTA'S HOUSE

During the hearing, Wong showed a photo of Deguito's car being serviced by the valet at Solaire at 7:57 p.m. on February 5.

He also showed a photo of the 100 million pesos being deposited at Solaire at 8:07 p.m. Wong said he took the photo himself.

After the transaction, Wong claimed he had dinner with Deguito and Concon Bautista at a Korean restaurant inside Solaire.

He said he also picked up a total of 300 million pesos and $5 million in cash from Bautista's house on February 9, February 10, and February 14.

The 300 million pesos went to a junket agent in Solaire, Wong said.

He said Gao and Ding wanted the $5 million to themselves, which he said was not part of the deal.

"Ang gentlemen's agreement, walang kukuning cash. Wala sa rules eh. So kaya natira ang $4.63 million dahil nag-aaway na kami. Ang kinuha nila $370,000. Nagagalit na ako kasi wala sa usapan na kukuha ng cash. Kasi itong negosyo namin usapan lang eh, tiwala lang. Sabi ko, 'Niloloko niyo na ako,'" he said.

Wong claimed the $4.63 million was still in safekeeping at Solaire and that he is willing to return the money to the Bangladesh Bank.

source: www.abs-cbnnews.com

RCBC apologizes for staff's role in $81-M heist

MANILA - Rizal Commercial Banking Corporation (RCBC) has issued an apology to the public after its employees were linked to the $81-million money laundering heist.

In an advertisement printed on selected broadsheets on Wednesday, the bank said it will cooperate with the investigations of the Senate and the Anti-Money Laundering Council (AMLC).
    
“RCBC offers its sincerest apologies for the involvement of its personnel in the money laundering scheme now subject of Senate Blue Ribbon and AMLC investigations. Within legal bounds, RCBC will cooperate with these and any subsequent government proceedings,” the bank said.

It added that it is conducting its own inquiry to identify and address any weaknesses in its controls and operations, and it will take appropriate actions against any bank officer or staff found guilty of negligence.

“RCBC recognizes the evils wrought by money laundering and will do its utmost in the fight against it,” RCBC said.

On Tuesday, the bank said it had fired the manager of its Jupiter branch, Maia Deguito, and her assistant, Angela Torres, over their alleged involvement in the money laundering scam.

It added that it will file charges against Deguito and Torres next week.

Deguito's camp earlier accused RCBC of covering up the role of some of its officials in the scandal.

Her legal counsel, Atty. Ferdinand Topacio, said RCBC is pinning her client as a "scapegoat" in the transfer of stolen money from a Bangladesh central bank account into four RCBC accounts.

source: www.abs-cbnnews.com

Faulty printer implicated in $81-M bank heist

DHAKA, Bangladesh - A printer fault at Bangladesh's central bank meant that overseas queries about suspicious transactions went unanswered, according to a report seen by AFP Wednesday on the $81 million cyber heist that sent shockwaves through the banking world.

The report, filed to police on Tuesday, recounts the events leading to the discovery of the dramatic theft from an overseas account of Bangladesh Bank.

It says that because of a printer and software problem, it took the Bangladesh central bank nearly four days to ask banks across the globe to halt payments to the hackers.

They tried to steal around $1 billion and got away with $81 million from the impoverished country's coffers.

How a hacker's typo helped stop a billion dollar bank heist

Central bank governor Atiur Rahman and two of the deputy governors have lost their jobs over the scandal, which has hugely embarrassed the government and raised alarm over the security of the country's foreign exchange reserves of over $27 billion.

On Wednesday the government, which has said it was kept in the dark about the losses for weeks, also removed its most senior banking official M. Aslam Alam from his position.

The hackers managed to transfer $81 million on February 5 -- a Friday, when Bangladesh Bank is closed -- from its account with the Federal Reserve Bank of New York, transferring the cash electronically to accounts in the Philippines.

In the report seen by AFP, the bank's joint director Zubair bin Huda said engineers were unable to fix the printers until February 6, a day after the New York bank sent queries about four separate transactions.

"Since such glitches happened before, we thought it was a common problem just like any other day," Huda said in the report.

Bangladesh Bank tried to contact New York on February 6 by email, fax and phone to ask that the transactions be suspended when it realized that the SWIFT interbank messaging system which it normally used was not working properly, Huda said.

"We realized that the SWIFT system being ineffective was an important issue, and therefore we sent an email to Federal Reserve Bank of New York at 1:30pm on February 6 to halt all types of payment processing," he said.

But they were unable to get through as the US bank was closed for the weekend.

It was not until Monday afternoon that the central bank's main server was again working properly and officials were able to send the formal requests to stop the payments to six banks across the globe.

But by that time $81 million had been transferred from Bangladesh Bank's New York account to a bank in the Philippines.

PHILIPPINES ACCOUNT

The money was later transferred to an account belonging to ethnic Chinese businessman William So Go, a Philippine Senate committee heard this week.

The money was then transferred to Philippine casinos, Julia Bacay-Abad from the Philippines' anti-money laundering council told the hearing on Tuesday.

Go's lawyer said the businessman's signatures for his now-frozen RCBC account, which were used to transfer the money, had been forged.

'Money trail in laundering scam ends with casinos'

Casino junket operator got $30-M in cash

Another transfer of $20 million was halted by a bank in Sri Lanka at Bangladesh Bank's request.

As details of the scandal emerged last week, Bangladesh Finance Minister A.M.A. Muhith threatened to sue the New York Fed.

The US-based bank said in a statement on its website that the payment instructions "were fully authenticated by the SWIFT messaging system in accordance with standard authentication protocols".

LACK OF TRANSPARENCY

Meanwhile, the $81 million heist has also put a spotlight on the Philippines' strict bank secrecy law. Finance Secretary Cesar Purisima earlier said the Philippines along with Lebanon are some of the only countries in the world left with a bank secrecy law.

Even Switzeland, which is known for its strict banking system, has been open to relax the law.

PH one of few countries with bank secrecy law

According to a law enacted in 1955, all bank deposits in the Philippines are absolutely confidential and may not be examined "except upon written permission of the depositor, or in cases of impeachment, or upon order of a competent court in cases of bribery or dereliction of duty of public officials, or in cases where the money deposited or invested is the subject matter of the litigation."

Last year, Internal Revenue Commissioner Kim Henares said the government is preparing a draft bill that would lift or ease the bank secrecy law to strengthen government's tax collection efforts. Congress, however, thumbed it down.

Makati Business Club chairman Ramon del Rosario said he found it "uncomfortable" that the bank secrecy law was invoked during the Senate investigation on the $81 million heist.

Senator Sergio Osmena III said the international financial community has already taken notice of loopholes in Philippine laws.

"As far as I am concerned, sunlight is the best medicine. Transparency in a democratic setting is the best safeguard against corruption and against bad public officials," he said.

“Despite all the warnings from the FATF (Financial Action Task Force), we still don’t have the political will to plug those loopholes. I hope that this will teach us a lesson because the international financial community has just taken notice of how big our loopholes are and it’s become an international incident because [81 million] dollars was hacked from the account of Bangladesh Central Bank and laundered through the Philippine financial system." With Agence France-Presse

Osmena: Political will needed to plug laundering loopholes

source: www.abs-cbnnews.com

Key figure in money-laundering case can't attend Senate probe

MANILA - Kam Sin Wong, also known as Kim Wong, will not be able to attend the Senate hearing on the $81-million money laundering case involving Rizal Commercial Banking Corporation (RCBC), his lawyer said Monday.

In a letter sent to the Senate Blue Ribbon Committee, Victor Fernandez, Wong's counsel, said the latter is currently out of the country for medical treatment.

Fernandez said Wong left the country March 4, 2016, supposedly before the "instant controversy" broke out.

(The Philippine Daily Inquirer first reported about an alleged $100-million money-laundering on February 29, 2016, and it was reported on March 3 that the the Anti-Money Laundering Council (AMLC) had frozen the suspected accounts used in the transaction. Wong left the following day. -- Ed's note.)

He likewise asked the Senate to keep his client's medical records private, assuring them that Wong will cooperate once he is done with his medical treatment.

In an exclusive interview with ABS-CBN News, RCBC Jupiter branch manager Maia Santos Deguito said Wong, who owns one of six bank accounts allegedly used in moving millions of dollars stolen by unknown hackers from the Bank of Bangladesh and laundered in casinos in Parañaque City, is a friend of RCBC president and CEO Lorenzo Tan.

Deguito said Kim Wong referred to her four persons who opened on May 2015 the other bank accounts linked to the scam: Michael Francisco Cruz, Jessie Christopher Lagrosas, Alfred Santos Vergara and Enrico Teodoro Vasquez.

Manager tags RCBC president's 'friend' in laundering scandal

Tan and Deguito are expected to attend the hearing of the Senate blue ribbon committee and the congressional oversight committee about the controversy on Tuesday afternoon.

source: www.abs-cbnnews.com