Bangladesh loses NY lawsuit over $81m cyber heist

The Supreme Court of New York has dismissed Bangladesh Bank's 2020 civil complaint over cyber heist of its $81 million reserve "for lack of jurisdiction", reports the Philippines Daily Inquirer.

A central bank spokesperson said they are aware of the development and would take the next action once they receive a copy of the judgement.

Hackers stole the amount from the Bangladesh Bank in 2016, and the funds flowed through the financial system of the Philippines before disappearing in Manila casinos.

Bloomberry Resorts and Hotels Inc and Yuchengo-led Rizal Commercial Banking Corp (RCBC) were among at least 20 defendants named in the complaint Bangladesh filed two years ago.

They were accused of "conversion/theft/misappropriation; aiding and abetting the same; conspiracy to commit the same; fraud (against RCBC); aiding and abetting and conspiracy to commit fraud; conspiracy to commit trespass against chattels; unjust enrichment; and return of money received".

Bloomberry told the Philippine Stock Exchange (PSE) on Monday that the Supreme Court of New York had dismissed the complaint on 8 April for "lack of jurisdiction", according to the Philippine Daily Inquirer.

The Bangladesh Bank lost another case in New York in March 2020 before filing this latest suit. The Bangladesh Bank appealed the decision with the US Court of Appeals, which was later withdrawn, Bloomberry said in its 2021 annual report.

Some of the funds stolen from the Bangladesh Bank were cleared by correspondent banks in New York before being wired to fictitious accounts with RCBC. The money was withdrawn and later disappeared.

The embarrassing incident prompted the Bangko Sentral ng Pilipinas to slap RCBC with a record 1 billion Philippine pesos fine in 2016 after a special investigation was completed.

The following year, President of the Philippines Rodrigo Duterte signed a new law, arming the Anti-Money Laundering Council with greater powers and included casinos in its coverage.

"We are aware that the 2020 civil complaint of the Bangladesh Bank has been rejected in the Supreme Court of New York. We will chart our next course of action after receiving a copy of the full judgement," Serajul Islam, executive director and spokesperson of the Bangladesh Bank, told The Business Standard.