US seeks Philippines help in recovering stolen BD money

U.S. central bankers have asked their counterparts in the Philippines to help Bangladesh recover $81 million in stolen funds, according to The Wall Street Journal.

 

The letter was sent in June from the Federal Reserve Bank of New York’s former head lawyer, Thomas Baxter, who retired last month, to the Philippines central bank. The Bangladesh Bank account from which the money went missing was held at the New York Fed.

 

The correspondence was one of the first examples of outreach by the U.S. central bank in the wake of a May 10 meeting in Basel, Switzerland, among the parties to discuss recovery of the missing money.

 

In February, the thieves— who haven’t been identified yet— obtained special credentials to Bangladesh Bank’s systems and managed to send fraudulent instructions telling the New York Fed to transfer the money to beneficiary bank accounts in Sri Lanka and the Philippines.

 

When the messages reached the New York Fed, they had been authenticated by the international money transfer network Swift, or the Society for Worldwide Interbank Financial Telecommunication, even though they later were found to be fraudulent. The Fed blocked some of the instructions but put others through before flagging them as suspicious.

 

Much of the money ended up in the Philippines casino industry. The $20 million Sri Lanka payment was successfully reversed.

 

In a statement following the May meeting in Basel, representatives from the New York Fed, Bangladesh Bank and Swift said they met to share information about the attack, in which the thieves ultimately attempted to steal nearly $1 billion via a total of 35 transfer offers. They said they would work together to “recover the entire proceeds of the fraud and bring the perpetrators to justice.”

 

A spokeswoman for the New York Fed didn’t immediately respond to a request for comment Friday.