Bangladesh Officials Visit Manila to Pursue Recovery of Bank Heist Funds, Reports Reuters

By Krishna N. Das, Serajul Quadir, and Karen Lema

DHAKA/MANILA – Officials from Bangladesh’s central bank are currently in Manila, aiming to persuade Philippine authorities to help recover the $63 million still unaccounted for following a significant theft earlier this year from its account at the Federal Reserve Bank of New York, according to two individuals familiar with the situation.

In early February, cybercriminals attempted to steal nearly $1 billion from the Bangladesh Bank account, successfully transferring $81 million to four accounts at Rizal Commercial Banking Corp (RCBC) in Manila. Thus far, only around $18 million has been recovered.

Bangladesh’s representatives contend that the funds found their way into the Philippine casino industry, where investigators suspect they were laundered due to systematic failures at RCBC. The Bangladeshi officials are leaning on internal RCBC documents to support their claims that the Jupiter Street branch in Manila did not act on suspicions raised by bank officials when the funds were first deposited on February 5, and subsequently delayed requests from the bank’s head office to freeze the accounts on February 9.

While RCBC did not immediately respond to inquiries, its former president, Lorenzo Tan, acknowledged during a Senate hearing in March that the incident resulted from "some judgment error from the people on the ground." He stated that, despite having proper IT and human controls in place, the system ultimately failed in execution. Tan subsequently resigned, expressing regret over the incident and attributing the failure to human error.

The Bangladeshi delegation includes members from the financial intelligence unit of Bangladesh Bank, a legal representative, and the Bangladeshi ambassador to the Philippines. They plan to engage with officials from multiple Philippine entities, including the anti-money laundering council and the central bank, over the course of their visit.

RCBC has previously assigned blame to its employees for the incident, including the branch manager. However, Bangladesh Bank believes the accountability extends beyond individual actions, arguing that RCBC facilitated the illegal transfer of stolen funds.

Documentation reviewed indicates that RCBC should be held responsible for the losses. This includes emails exchanged among managers during the incident and memos related to an internal investigation. The records show that RCBC temporarily froze the accounts in question on February 5 shortly after concerns were raised regarding the legitimacy of the funds. However, this hold was lifted just hours later following assurances from the Jupiter branch manager that the transactions were valid. The manager has since been terminated and is under investigation.

A lawyer for the former branch manager claimed that RCBC cannot shift the blame solely onto individual employees for the mistakes made. He pointed out that the bank did not respond adequately to stop payment requests from Bangladesh Bank.

The documentation reveals that when the bank reopened following the Chinese New Year, RCBC’s settlements department received alerts from Bangladesh Bank regarding the fraud. Despite this, large withdrawals totaling $58.15 million were processed just hours later, complicating recovery efforts. Only a fraction of these withdrawals occurred before the bank received formal alerts about the fraud.

Bangladesh Bank’s spokesperson asserted that RCBC failed to fulfill its responsibilities in the matter and should be held equally accountable alongside those individuals who received the stolen funds.