US court dismisses BB’s case against RCBC

FT ONLINE

A US court has dismissed a civil case filed by Bangladesh Bank against Manila-based bank Rizal Commercial Banking Corp, individuals and firms over $81m cyber-hacking in 2016.

Bloomberry Resorts Corp – parent firm of Solaire Resort & Casino operator Bloomberry Resorts & Hotels Inc. -- one of the defendants -– disclosed to the Philippine Stock Exchange on Monday that the US District Court for the Southern District of New York dismissed the case linking the alleged conspiracy in relation to the cyber heist and money laundering case, reported Inquirer.

Citing an opinion and order dated Mar 20, the US court granted the defendants’ joint motion to dismiss for failure to state a Racketeer Influenced and Corrupt Organizations Act (RICO) claim or RICO conspiracy claim.

The disclosure said that the US Court had “further declined to exercise its supplemental jurisdiction over the remaining state law claims,” according to the Philippine Daily Inquirer.

The court, however, denied the defendants’ other joint motions to dismiss the case based on lack of subject matter jurisdiction and having another more suitable forum.

The RCBC filed the suit at a local court in the Philippines on Mar 6, 2019 over what the BB said were baseless claims of its complicity in the 2016 cyber heist of Bangladesh’s foreign exchange reserves.

The BB filed a lawsuit in the US District Court in Manhattan earlier last year, accusing RCBC of involvement in a massive conspiracy to steal its money.

RCBC was fined a record 1 billion pesos ($19.17 million) by the Philippine central bank in August 2016 for its failure to prevent the movement of the stolen money through the bank.

A former treasurer of RCBC and five other workers at the branch where the cash was withdrawn face money laundering charges.

On Jan 11 last year, a Philippines court held a former manager of a RCBC branch guilty on eight counts of money laundering, the first conviction in the cyber heist.

Just $15 million of the stolen money has been recovered from a Manila junket operator, a role that involves marketing casinos to VIPs.

This civil case was meant to collect the amount allegedly lost by Bangladesh Bank to North Korean hackers who broke into its systems and sent multiple remittances orders to their account with the Federal Reserve Bank of New York. Some remittance orders were allowed to be transacted through four correspondent banks in New York, and were remitted to fictitious accounts with RCBC.