New York Fed asks Philippines to recover stolen fund

The Federal Reserve Bank of New York has asked the Philippines’ central bank to help Bangladesh Bank recover the $81 million that was stolen by hackers in February from its account held at the Fed, boosting Dhaka’s efforts to retrieve the money.

In a letter sent on June 23, the New York Fed’s General Counsel Thomas Baxter asked Elmore O. Capule, general counsel for the central bank of the Philippines, “to take all appropriate steps in support of Bangladesh Bank’s efforts to recover and return its stolen assets.”

Almost six months have passed since hackers broke into the Bangladesh central bank’s computer systems and sought to transfer away as much as $951 million — eventually managing to steal $81 million in one of the biggest-ever cyber heists. Most of that money is still missing and the culprits have not been identified.

In the letter, which has been seen by Reuters, Baxter also wrote that the payment instructions that led to four money transfers to beneficiary accounts at the Manilabased Rizal Commercial Banking Corp (RCBC) were authenticated using a “commercially reasonable security procedure”, but that they were issued by persons using stolen credentials.

Bangladesh Bank has also agreed to share with the Fed a report into the heist that was prepared by US cyber security firm FireEye, said a source close to the Bangladesh central bank with direct knowledge of the decision. Officials in the United States have been asking for that for some weeks.

Bangladesh Bank spokesman Subhankar Saha could not immediately be contacted for comment outside regular business hours.

The Philippines’ central bank said it would not comment in a case in which there were ongoing investigations. RCBC said in a statement the bank supported the efforts of Bangladesh Bank in recovering funds from “the parties who ultimately received them”.

After going to RCBC, the money was mostly laundered through the Philippines’ casino industry and now the trail has gone cold.

There has also been friction between Bangladesh Bank, the New York Fed and payments network SWIFT, over which the payment instructions were issued. But relations seem to improving to an extent, at least between the New York Fed and Dhaka.

A source close to Bangladesh Bank who has direct knowledge of the recovery process said some Bangladesh Bank officials will fly to Manila next week in an attempt to hasten the recovery.