Reserve heist: US court rejects RCBC, 6 others' appeal

The New York (NY) Supreme Court has ruled in favour of the Bangladesh Bank, dismissing Philippines' Rizal Commercial Banking Corporation (RCBC) bank and six others' motion to dismiss a lawsuit the central bank filed against 20 individuals and organisations in the US court over the 2016 cyber heist.

The court mentioned in its judgement, which was issued on 13 January, that the RCBC had "intentional participation" in stealing money from the Bangladesh Bank's account in New York.

If RCBC's New York account was not used and the company did not cooperate with the accused in the Philippines, there was no way for the money to leave the Federal Reserve Bank, the court observed.

The NY court's latest judgement cleared all bars for the Bangladesh Bank to move forward with their case against RCBC and 18 other individuals or organisations at the US court on Jurisdictional Ground, said a statement by Bangladesh Financial Intelligence Unit (BFIU) Monday.

The state court also ordered the defendants to file their responses by 2 February and directed them to mediate with the Bangladesh Bank.

The central bank Executive Director and spokesperson Md Mezbaul Haque said it was necessary to run the case in the US court in their efforts to recover the money stolen from the central bank's account at the New York Federal Reserve Bank.

"Otherwise, we would have to go to the Philippines instead of the US seeking judgement over the heist," Mezbaul Haque told The Business Standard.

On 31 January 2019, the Bangladesh Bank filed a case against 20 individuals and organisations including RCBC in the United States District Court (Southern District of New York) to recover the stolen money. Six of the defendants RCBC filed a motion to dismiss the accusations against them.

The Federal Court dismissed their plea on 20 March 2020 and directed the case to be handled in the State Court instead.

In line with the judgement, the Bangladesh Bank filed a case against the same 20 individuals and organisations of the Philippines in the New York Supreme Court (State Court) on 27 May 2020 prompting six defendants – RCBC, Lorenzo V Tan, Raul Victor B Tan, Bloombery (Solaire), Eastern Hawaii and Kim Aung – to once again filed motion to dismiss in the Federal Court.

Hearing the petitions on 14 July and 14 October 2021, the New York County Supreme Court accepted Bloombery (Solaire) and Eastern Hawaii's motion to dismiss on jurisdictional grounds.

In a partial judgement passed on 8 April 2022 the court exempted the two organisations from the case. However, Kim Aung's petition was dismissed and he was instructed to respond to the Bangladesh Bank's complaint.

Later, the Bangladesh Bank filed an appeal against the ruling exempting Bloombery (Solaire) and Eastern Hawaii for the case and a hearing in this regard is pending.

On 13 January, the State Court gave its judgement in favour of the Bangladesh Bank dismissing RCBC and six other defendants' appeals.   

According to the court's direction, the Bangladesh Bank's New York-based legal team will review the matter regarding mediation.

On 4 February, 2016, hackers broke into the Bangladesh Bank's account at the Federal Reserve Bank of New York and stole over $81 million using 35 fake SWIFT, a global communication network for banks and financial institutions, messages.

The money was wired to an RCBC branch in Manila, the capital of the Philippines, from where it disappeared into the casino industry in the Philippines.

Hackers also made an effort to transfer $20 million to a fake NGO in Sri Lanka but failed due to a wrong spelling used in the message.

Bangladesh was able to recover only $15 million from the Philippines with the help of the US intelligence agency FBI. Refund process of the rest of the money is stuck in lawsuits.