$100 Million Was Stolen From Bangladesh’s New York Fed Account

Authorities in four countries are still piecing together what happened.
  1. The New York Fed received a a series of requests seeking the transfer of nearly $1 billion out of the Bangladeshi account on a Friday in February.
    The Fed says the transfer requests were “fully authenticated” with correct bank codes.
  2. Friday is the weekend in Bangladesh though and the central bank’s offices were closed
    By the time officials at Bangladesh Bank returned to work and detected the fraudulent requests, more than $100 million had been stolen from the account. (PHOTO: ASHIKUR RAHMAN/REUTERS)
  3. Hackers had transferred $81 million to personal bank accounts in the Philippines, while $20 million had gone to a Sri Lankan bank
    Other transfers totaling roughly $850 million were blocked after “the American bank raised a money laundering alert,” said Subhankar Saha, a spokesman for Bangladesh Bank.
  4. The fact that the money was being wired to personal bank accounts in the Philippines rang alarm bells
  5. Most of the $81 million ended up in the account of businessman William Go and his brokerage firm, according to testimony by an executive at Rizal Commercial Banking Corp. (where the account was held)
  6. Go said his signature had been forged to open the account
  7. The bank executive also said that about $430,000 was withdrawn and loaded into bank manager Maia Santo Deguito’s car
    The executive testified that Deguito ignored the “stop payment” requests made by Bangladeshi officials, and transferred the money to a foreign currency broker.
  8. Deguito’s lawyer said she was the victim of a conspiracy and innocent of any wrongdoing
    (PHOTO: EUROPEAN PRESSPHOTO AGENCY)
  9. The Anti-Money Laundering Council of the Philippines said the money was funneled into several casinos and used to buy gambling chips
    The council's investigation ended at the casino’s doors, however. Gambling facilities aren’t covered by the Philippines’ Anti-Money Laundering Law.
  10. “Manila has returned only $68,000 of the money which was left in the bank accounts,” said a Bangladesh Bank official close to the investigation. “Whoever planned it had thought well ahead.”
  11. The wire transfer of $20 million to Sri Lanka went to the account of a newly formed nongovernmental organization
    The Sri Lankan bank handling the account reported the unusual transaction and authorities reversed the transfer.
  12. The New York Fed offers transaction services to about 250 foreign central banks and government-related entities around the world
  13. Bangladesh’s finance minister, Abul Maal Abdul Muhith, accused the Fed of “irregularities” over the stolen funds and said his government might sue
  14. In an early sign of fallout from the breach, Bangladesh’s central-bank governor, Atiur Rahman, resigned.
    (PHOTO: KUNI TAKAHASHI/BLOOMBERG NEWS)
  15. Bangladesh foreign-currency reserves touched a record $28 billion in February. Nearly a third of those are held in liquid form in bank accounts at the Fed and the Bank of England, according to officials.