Central bank officials say most of the money is in the Philippines, a small portion recovered from Sri Lanka; culprits identified

Bangladesh Bank has identified the people involved in the hacking of around $100 million (Tk 780 crore) from its foreign currency account with the Federal Reserve Bank of New York, claim BB officials.

Almost the entire amount was transferred online to the Philippines banking system and a small portion of it to Sri Lanka by suspected Chinese hackers on February 5, they said.

The incident took place at a time when Bangladesh's banking system is trying to recover from the recent ATM and credit card fraud.

A senior BB official told The Daily Star yesterday that a small portion of the stolen money has already been recovered from Sri Lanka. But the money, which is in the Philippines, is yet to be recovered.

“We are dealing with the issue. Those who were behind the hacking have been identified,” said the official.

The BB has around $28 billion in foreign currency reserve. Nearly one-third of the reserve is in the form of liquid assets with the Federal Reserve Bank in the US and the Bank of England. The rest is invested in bonds and gold.

In a statement yesterday, the BB said it has been able to recover a portion of the stolen money. But it did not mention the amount.

“Bangladesh Financial Intelligence Unit (BFIU) is working with the Anti-Money Laundering Council (AMLC) of the Philippines to recover the money from there,” it said.

The AMLC filed a case in this regard in the Philippines, and received a court order to freeze the accounts of those involved in laundering the stolen money.

Wishing anonymity, a deputy governor of the BB, said the Federal Reserve Bank of New York failed to do due diligence in dealing with the hacking threat.

However, the Federal Reserve Bank denied that its payments systems were breached, reports Reuters.

"To date, there is no evidence of any attempt to penetrate Federal Reserve systems in connection with the payments in question, and there is no evidence that any Fed systems were compromised," said New York Fed spokeswoman Andrea Priest in response to queries about the claim.

Talking to reporters on the matter yesterday, Finance Minister AMA Muhith said it is a “very unusual situation”.

“I cannot make any statement as I was not informed by the central bank about it. I just saw the news in the media,” Muhith said after a meeting with the newly appointed country director of the World Bank in Dhaka.

According to BB officials, hackers stole the money from a BB account with the Federal Reserve Bank of New York on February 5. Soon after the BB came to know about the hacking, it started working on the issue secretly so that the matter doesn't go public.

But the issue came to the fore after inquirer.net, a leading news website in the Philippines, revealed that the funds laundered were of a financial institution in Bangladesh.

Now the financial regulator of the Philippines is investigating what could be the biggest money laundering case ever detected in the country.

Investigators in the Philippines found that computer hackers stole around $100 million which was brought into the country's banking system. It 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 few days.

“We are confident of recovering the funds as it was channelled into the Philippines financial system,” said a senior BFIU official.

“Two of our officials recently visited the Philippines to hold talks on the issue,” added the official.

According to BB officials, this laundered money can be recovered through the Stolen Asset Recovery Initiative (StAR), a partnership between the World Bank Group and the United Nations Office on Drugs and Crime (UNODC), which supports international efforts to end safe havens for corrupt funds.

StAR works with developing countries and financial centres to prevent the laundering of the proceeds of corruption and to facilitate more systematic and timely return of stolen assets.