The 2016 cyber heist resulted in the loss of $81 million to Philippine casinos so the RCBC is facing accusations of negligence in failing to prevent cybercrime. It is also facing accusations that it did not implement adequate security measures to prevent the theft of such a large sum of money.
The New York Supreme Court Ruled Only on Its Jurisdiction
The case against RCBC was filed in May 2022 and RCBC argued that the court did not have the jurisdiction to hear the case. However, the court rejected this argument and confirmed that it has the jurisdiction to hear the case, but did not make any ruling on the validity of the lawsuit. The court also instructed both parties to try to resolve the dispute through mediation.
The incident that led to the lawsuit happened in 2016 when North Korean hackers sent 35 fake requests for money transfers of about $1 billion from Bangladesh Bank’s account to the Federal Reserve Bank of New York. The American bank was able to stop most of the transactions, but five transactions worth a total of $101 million were processed.
Bangladesh Bank was able to recover $20 million, but $81 million transferred to RCBC in the Philippines was lost, and some of it was used in casinos in the country.
The original lawsuit lodged by Bangladesh Bank listed 20 individuals and entities as defendants, among them Solaire Resort and Entertainment City, where some of the stolen funds were reportedly used to buy gaming chips and play in VIP gambling rooms.
However, in 2022, both Solaire and Eastern Hawaii managed to get their cases thrown out based on jurisdiction. Bangladesh Bank has filed an appeal against that decision, however, the court has not yet given a ruling on it.
A Court in the Philippines Unfroze Funds of a Chinese Gambling Company
In October 2019, the Manila City Regional Trial Court (RTC) lifted asset preservation orders (APOs) on the accounts of Eastern Hawaii Leisure owner Kam Sin Wong, Qiaoqiao Wendy Wang, and Dong Na Xu, as there was no evidence linking them to the cyber heist of funds from Bangladesh. It was alleged that the accounts were established to receive the embezzled funds from the Bangladesh central bank.
The Court of Appeals upheld this decision on April 29, 2022. The Philippines’ Anti-Money Laundering Council (AMLC) appealed but the Court of Appeals again confirmed the decision on August 2, stating that AMLC did not provide new evidence to support their case. Eastern Hawaii Leisure returned $4.63 million as part of the stolen funds, but AMLC couldn’t prove the accounts were related to the cybercrime.