Today is the third anniversary since $81 million reached Rizal Commercial Banking Corp (RCBC) from the Bangladesh Bank (BB) account held by the Federal Reserve Bank of New York (New York Fed) via the SWIFT global payment network. The funds were directed to four different accounts held by RCBC’s Jupiter Street Makati branch.
BB soon found out about these payments and asserted that they were illicit and made as a result of its account being hacked. It quickly made representations to RCBC for the retrieval of the funds. But not quickly enough. The money had gone.
RCBC’s inquiries caused it to allege that the disappearance of the funds was due to the misconduct of Jupiter Street Branch manager, Maia Deguito and her No. 2. They were soon fired.
Of the $81 million stolen, $15 million was returned by Kim Wong, a casino junker operator, who was informed that the money was sourced illegally.
Another $18 million in is dispute. A Senate inquiry held in 2016 subjected money changer Philrem to serious questioning about the funds but its owners denied being in possession of the money. Philrem was not charged by the Department of Justice (DOJ), ostensibly because it filed a suspicious transaction report, as prescribed by law.
The remaining $48 million was allegedly laundered through casinos.
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Unsurprisingly, BB is not happy. Since 2016 it has threatened to file a case against RCBC. Finally, it has done this and last Friday it was reported that the New York Fed will assist BB with the case.
To some extent Philippine government instrumentalities, specifically Bangko Sentral ng Pilipinas (BSP), the Anti-Money Laundering Council (AMLC), and DOJ will come under scruting if the case comes to court. This is because they all largely accepted RCBC’s narrative that the cyberheist was successful due to the wickedness of Maia Deguito. The vexed question: ‘Was she scapegoated?’ may be answered.
Six former RCBC executives including Treasurer Raul Tan have also been charged by AMLC. This case has not yet been heard.
In addition to Philrem, I am surprised that former RCBC CEO Lorenzo Tan has not been charged. The BB case against RCBC may address this aspect.
RCBC’s lawyer has belittled BB’s lawsuit and suggested that since the money laundering took place outside the United States, the US District Court may not have jurisdiction.
I am glad that the theft of $81 million is being heard anew. The outcome of investigations within the Philippines has not been satisfactory. The whole truth has not emerged. Details of the opening of bogus accounts in Jupiter Street Branch have not been dealt with thoroughly. Nor has the flow of funds through RCBC. At the first Senate hearing RCBC asserted that the funds went ‘straight through’ from Wall Street to Jupiter Street. In fact the funds went first to RCBC’s remittance center and then to Jupiter Street.
What happened between the time the funds reached RCBC’s remittance center before being sent to Jupiter Street needs to be fully investigated. Who knew what? When did they know about it? It seems that RCBC’s head office did not communicate with Jupiter Street until after the money had gone? Why not?/PN
