New York: A spreading scandal over the mysterious electronic theft of $US81 million ($109 million) from Bangladesh's official account at the Federal Reserve Bank of New York prompted the governor of that country's central bank to resign, and three of his subordinates were fired.Bangladesh Bank governor Atiur Rahman told reporters he resigned "out of my moral responsibility" for waiting too long to tell the government of the theft. Photo: AP
They were the first political casualties since the theft came to light this month, when news reports from the Philippines said unidentified hackers using official electronic bank messaging technology had diverted the money in early February. Most or all of the stolen money, one of the biggest electronic heists in history, is thought to have been transferred to accounts in the Philippines.
The Bangladesh central bank governor, Atiur Rahman, a widely respected economist who resigned on Tuesday, appeared to be caught by surprise by the scandal. It seems he learned of the theft only from Philippines news reports about a money-laundering investigation there. Last week he threatened to sue the New York Fed, a critical global financial gateway that holds the deposits of many foreign central banks.Maia Deguito, Rizal Commercial Banking Corporation (RCBC) branch manager, takes her oath prior to the start of Philippines probe into Bangladesh's stolen funds. Photo: AP
The New York Fed said in a statement on March 9 that the transfer of the money had been "fully authenticated" by an international financial messaging system, known as Swift, suggesting that there may have been a security breach in Bangladesh. The Fed statement said its systems had not been compromised.
With pressure intensifying to explain how such a theft could have happened, Mr Rahman submitted his resignation and Bangladesh news agencies said it was accepted by Prime Minister Sheikh Hasina.
The news agencies also said the Finance Ministry had dismissed two deputy central bank governors and the Bank and Financial Institutions division secretary, who were all accused of having kept the theft a secret from their superiors.
Mr Rahman, who had held the central bank post for seven years, said in Dhaka that he had been conflicted about the decision to resign. He also said he had informed foreign law enforcement authorities and had brought in cybercrime specialists to help investigate.Businessman William So Go, a depositor of Rizal Commercial Banking Corporation (RCBC), testifies before the Philippines probe into Bangladesh's stolen funds. Photo: AP
"Such cyberattacks are happening across the world," Mr Rahman said, according to news accounts from Bangladesh. "We are new in facing such attacks. We lack experience."
A spokeswoman for FireEye, a computer security company in Milpitas, California, confirmed on Tuesday that its forensics division Mandiant was helping to investigate the Bangladesh theft.
Quoting unidentified banking officials, Reuters reported on March 10 that the hackers appeared to have been intent on transferring nearly $US1 billion out of Bangladesh's account, with nearly three dozen messaging requests. They succeeded with four requests, totaling $US81 million, to move money to the Philippines, before a fifth attempt, for $US20 million to be sent to Sri Lanka, was stopped because the hackers misspelled the recipient's name as the Shalika Fandation instead of the Shalika Foundation.
The banking officials also were quoted as saying they were suspicious because of the unusually high number of transfer requests, so they alerted the Bangladeshis.
Why a month elapsed before the news came to light remains unclear, as are the prospects for recovering any of the money.
While incomes and living standards have improved, Bangladesh remains one of the poorest countries in the region. A 2014 study by Oxford University, using data on the percentage of the population considered destitute, ranked Bangladesh as the third-most impoverished in South Asia, after Afghanistan and India.
The resignation and firings in Bangladesh came as testimony in a Philippines Senate panel hearing about the money-laundering investigation suggested that most of the purloined Bangladesh funds had been delivered, in a mix of dollars and Philippine pesos, to three Philippines casino operators. An anti-money-laundering law in the Philippines does not apply to the gambling industry.
The senator leading the hearing, Teofisto Guingona III, said the loophole abets money laundering, an important ingredient in the crime that victimised Bangladesh's central bank.
"The funds can easily be traced until the casinos," the senator said, according to the Philippines News Agency account of the hearing. "Once it is in the casino, it seems it was a dark cave, it just one big cave, a black hole which we cannot trace anymore."
New York Times