BB Heist: First conviction, after 3 years

A court in the Philippines yesterday convicted a former branch manager at Manila-based Rizal Commercial Banking Corp (RCBC) of money laundering, in the first conviction over the Bangladesh Bank reserves heist in which $81 million was stolen nearly three years ago.

But lawyers for the convict, Maia Deguito, and officials from the BB and the Bangladesh finance ministry said the others involved in the crime should also be held accountable.

The Makati Regional Trial Court sentenced Deguito to a jail term ranging from 32 to 56 years, with each count carrying four to seven years. She was also ordered to pay a total of about $109 million in fine.

In February 2016, unknown criminals used fraudulent orders on the SWIFT payments system to steal the funds from the BB's account at the Federal Reserve Bank of New York in one of the world's biggest cyber heists.

The money was sent to accounts at an RCBC branch, then headed by Deguito, before it disappeared into the casino industry in the Philippines.

"Her declaration in open court that she has nothing to do with these transactions was a complete and comprehensive lie," the court said in its 26-page ruling.

Deguito was "utterly shocked" and will appeal against the decision, said her lawyer, Demetrio Custodio, according to ABS-CBN news of the Philippines.

"We were pointing out to the court that Maia could not have acted on this because her position at the bank was one of customer care and therefore she had no function that will relate to the operation of banking transactions," Custodio said.

"I am disheartened to believe that due to the amount involved here, only a very lowly person is prosecuted by the government," he said.

"There should be more people who should be liable to this other than a very lowly bank officer who had nothing to do with operational matters."

RCBC was fined a record 1 billion pesos ($19.17 million) by the Philippines central bank in August 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A former treasurer of RCBC and five other workers at the branch where the cash was withdrawn face money laundering charges.

"We hope that this case could be expedited and could go to trial soon for a decision," Asad Alam Siam, Bangladesh's ambassador to the Philippines, told Reuters, regarding the charges.

Maia Deguito

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

GOVT TEAM IN US

Meanwhile, Md Serajul Islam, a BB spokesperson, said a high-powered committee comprising BB and government officials is now in the US to decide how to proceed with filing a case against individuals or groups involved in the heist to recover the funds.

The team, which includes Md Ashadul Islam, secretary of the banking division, and Abu Hena Mohd Razee Hassan, chief of the Bangladesh Financial Intelligence Unit, will hold a final discussion with a New York law firm and the NY Fed. Coming back, the team members will report to the government and then go back to the US again to sue those responsible.

According to US laws, money-laundering cases have to be filed within three years of the crime being committed. This meant the case against the Fed would have to be filed with a New York court by this January.

AB Mirza Azizul Islam, a finance adviser to a former caretaker government, told The Daily Star, "It's a positive thing that the Philippines court has completed all the procedures of the case which proved the involvement of the RCBC official. But Bangladesh is still far away from [taking] any concrete stance on recovering the stolen funds."

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He urged the Bangladesh government to publish the probe report submitted by a committee led by Mohammed Farashuddin, a former central bank governor.

Officials of the BB and the finance ministry pointed out that in the pre-trial process a few major suspects were dropped from the case.

The Department of Justice (DoJ) cleared casino boss Kim Wong, junket operator Weikang Xu and remittance service Philrem, according the article of ABS-CBN.

Officials of the BB and the finance ministry said Wong knew that the money would come, and opened five false accounts with the help of Deguito eight months before the money came.

Philrem actually withdrew the money from the intermediate account of William Go, a local trader, where Deguito transferred the money, once it arrived.

The company distributed the money to Kim, who took it to casino accounts, converted to chips, and thus the money whitened at gambling table and disappeared as white money in the market.

RCBC was also left out although the bank was requested both by the Fed of the US and the BB not to disburse the money saying that it was a heist.

There is one more case being pre-judged by the DoJ, against six RCBC top officials which, if goes on trial, might focus on how top management of the bank were involved.

When asked about the verdict, Finance Minister AHM Mustafa Kamal told reporters yesterday that he hadn't received the copy of the verdict. "I will comment on it after I know the details."

He also said he was not updated on the hacking and the probe report.