Five years into reserve heist: Money recovery efforts too slow

Five years have passed since the central bank's reserve heist but the government's ongoing legal battle in the US court to recover $66.54 million has not made much progress.

Only $14.61 million out of the $81 million stolen money have been retrieved as yet.

Moreover, the Criminal Investigation Department (CID) has not yet even completed its investigation into the case filed by the Bangladesh Bank with the Motijheel Police Station following the reserve theft.

The CID claimed that their investigation is nearing completion and soon will file a charge sheet.

An investigation committee led by former governor Dr Farashuddin submitted its report on the heist in May 2016 but it has not been made public.

On 4 February 2016, hackers stole $101 million from the Bangladesh Bank's accounts with the Federal Reserve Bank of New York.

Of the amount, $81 million was transferred to four accounts with the Rizal Commercial Banking Corporation (RCBC) in Manila and another $20 million to a bank in Sri Lanka.

However, the transfer of $20 million to Sri Lanka failed because of a spelling error by the hackers. The Bangladesh Bank got back that amount from Sri Lanka.

Later, the Bangladeshi central bank was able to retrieve about $15 million from the amount the Philippines realised in a fine from the RCBC for its negligence in duty. About $66 million could not be recovered yet.

Legal battle to recover the stolen money

The recent report published by the central bank on its measures to recover the remaining $66.54 million says on the process of recovering the heisted money, a "Resolution and Assistance Agreement" was signed between the Bangladesh Bank and the Federal Reserve Bank of New York on 29 January 2019.

The Bangladesh Bank filed a lawsuit against seven persons, 20 institutions and 25 anonymous persons and institutions at the District Court for the Southern District of New York on 31 January 2019, it added.

On 20 March 2020, the court dismissed the case and suggested filing a case in another court.

On 27 May last year, the central bank filed a fresh case with the New York County Supreme Court against the RCBC and its associates. Eight months have passed since the case was filed, but it has hardly made any progress.

When contacted, Abu Hena Mohammad Razi Hassan, head of the Bangladesh Financial Intelligence Unit and former deputy governor of the central bank, told The Business Standard that a notice has been sent to the accused from a New York court.

He expects that the hearing of the case will start soon. However, he cannot say precisely when it starts.

Abu Hena said since the reserve is public money, the government has directed to continue the case to recover the stolen money.

Meanwhile, the RCBC filed a defamation suit against the Bangladesh Bank in a Philippine court on 6 March 2019 after the Bangladesh Bank filed a lawsuit in a New York court in January that year.

CID investigation 

According to CID sources, many local and foreign individuals and organisations are involved in the reserve heist. It has sought information from five countries for the investigation.  Although the Philippines and India provided information, no information has yet been received from North Korea, China and Sri Lanka.

The investigation on the Bangladesh part is almost at the last stage. The CID said many people in the central bank were directly involved with the incident. Many central bank senior officials have been found to be negligent to their respective duties at that time. Charges will be brought against them.

Seeking anonymity, an official involved in the investigation told TBS that all those involved on the Bangladesh part of the charge sheet will be indicted. There will be names of many former and current influential officials of the Bangladesh Bank.

Some officials of Bangladesh Bank were directly involved in the process of stealing the reserve money. Many did not fulfil their responsibilities properly – it can either be intentional or unintentional. They are all responsible people; such behaviour cannot be expected from them. They cannot avoid their accountabilities, he added.

Special Superintendent of CID's Financial Crime Unit Mostafa Kamal told TBS that the investigation is almost over. The Charge sheet will be submitted at any time.

When asked about how many people will be charged, he said, "We can tell about it only after the completion of the investigation."

Farashuddin-led committee's investigation report

On 15 March 2016, the finance ministry had formed a three-member inquiry committee headed by former central bank governor Dr Farashuddin after the reserve theft.

The committee submitted an interim report to the then Finance Minister Abul Maal Abdul Muhith on 15 April that year and a full report within its scheduled 75 days on 30 May.

Upon receiving the full report, the then finance minister promised that the report would be released within 15-20 days. But, the investigation report has not been published in the last five years. The mystery of reserve theft is still unknown.