NY Fed's involvement in reserve heist not yet proven, says BFIU

Bangladesh is yet to find the Federal Reserve Bank of New York's involvement in the reserve heist though it plans to sue the US-based bank, a top official said on Friday.

"We are yet to get anything absolute that proves involvement of Fed (with the heist)," head of Bangladesh Financial Intelligence Unit (BFIU) Abu Hena Razee Hassan told the FE.

He said the legal firm, hired by the Bangladesh government, is still assessing the matter.

"The party that will be found involved in the heist will be sued," Mr Hassan said.

Sources said the law firm is scheduled to submit a detailed assessment report on the heist incident to the central bank by the second week of this month.

Finance Minister AMA Muhith on Wednesday told newsmen that the NY Fed, alongside the Rizal Commercial Banking Corporation (RCBC) of the Philippines, will be sued over the stolen reserve money.

Sources said a day after the minister talked about suing the NY Fed, the officials at BFIU had to clarify the matter to the Fed. "This is not to my knowledge. Maybe what you heard is not true," said Mr Hassan.

Mr Muhith on that day said the initial transaction was held from the Fed, though it made reference to Bangladesh.

"But before receiving the notification, some money was already transferred," he added.

He said the Fed did not wait for a reply from the Bangladesh Bank (BB) before releasing the money.

The hackers stole US$101 million from the BB's reserves deposited with the NY Fed in February 2016.

They channelled the money to bank accounts at the RCBC in Manila by placing fraudulent orders on the SWIFT payments system.

Of the total, a sum of nearly $20 million was recovered from Sri Lanka.

The lion's share of the booty landed in the Philippines and most of it was reported to have been squandered in casinos.

Later, some $15 million more could be recovered from the Philippines.

The Bangladesh government has decided to file the case by January 15 after failing to recover the money out-of-court settlement.

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