Philippine court orders jail for former bank manager over Bangladesh central bank heist

Maia Santos Deguito was a branch manager of the Rizal Commercial Banking Corp (RCBC). (Reuters)
Updated 10 January 2019
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Philippine court orders jail for former bank manager over Bangladesh central bank heist

  • In February 2016, unknown criminals used fraudulent orders on the SWIFT payments system to steal the funds from the Bangladesh’s central bank account at the Federal Reserve Bank of New York
  • Deguito was sentenced to jail, and was also ordered to pay a total fine of about $109 million

MANILA: A Philippine court on Thursday held a former bank manager guilty on eight counts of money laundering, the first conviction in one of the world’s largest cyber heists, in which $81 million was stolen from Bangladesh’s central bank nearly three years ago.
The regional court sentenced Maia Deguito, a former branch manager at Manila-based Rizal Commercial Banking Corp. (RCBC) , to a jail term ranging from 32 to 56 years, with each count carrying four to seven years.
She was also ordered to pay a total fine of about $109 million.
In February 2016, unknown criminals used fraudulent orders on the SWIFT payments system to steal the funds from the Bangladesh’s central bank account at the Federal Reserve Bank of New York.
The money was sent to accounts at a branch of RCBC in Manila then headed by Deguito, before it disappeared into the casino industry in the Philippines.
“Her declaration in open court that she has nothing to do with these transactions was a complete and comprehensive lie,” the court said in its 26-page ruling.
Deguito facilitated and coordinated and corroborated in the execution and implementation of the illegal bank transactions, the court added.
“The conviction of Deguito is consistent with the bank’s position that it is the victim in this situation and that Deguito is a rogue employee,” RCBC spokeswoman Thea Daep said in a statement.
Deguito remains free, however, as bail she posted earlier stays in effect until the conviction becomes final, one of her lawyers, Joaquin Hizon, told Reuters.
Her other lawyer, Demetrio Custodio, told Reuters she intended to appeal Thursday’s ruling and carry the case to the Supreme Court, if necessary, to win acquittal.
In a separate interview with news channel ANC, Custodio said, “There should be more people who should be more liable for this, other than a very lowly bank officer who has nothing to do with operational matters.”
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.
“We hope that this case could be expedited and could go to trial soon for a decision,” Asad Alam Siam, Bangladesh’s ambassador to the Philippines, told Reuters, regarding the charges.
Just $15 million of the stolen money has been recovered from a Manila junket operator, a role that involves marketing casinos to VIPs.
Bangladesh bank, finance and law ministry officials are visiting New York this week for talks to try and move forward the recovery process. They will have to make a decision on suing the parties involved.


FBI eyes Deutsche Bank after money-laundering report

Updated 20 June 2019
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FBI eyes Deutsche Bank after money-laundering report

  • Questioned money transfers allegedly made by the Kushner Cos. to Russian individuals in 2016
  • Banks are required to report certain suspicious transactions to the Treasury Department, but have discretion over what triggers a report

NEW YORK: The FBI has reached out to a lawyer for a former Deutsche Bank employee who complained that the bank was ignoring suspicious transactions, including some involving Jared Kushner’s family real estate company.
The former Deutsche Bank anti-money laundering specialist, Tammy McFadden, told The New York Times in May that she had recommended that the bank alert the Treasury Department to a series of money transfers from the Kushner Cos. to Russian individuals in 2016, but the bank decided against it.
McFadden’s lawyer, Brian McCafferty, told the Times in a story published Wednesday that he was recently contacted by the FBI about his client.
Deutsche Bank declined to comment on the Times story, other than to say it will cooperate with any “authorized investigations.”
Kushner Cos. released a statement saying “any allegations regarding Deutsche Bank’s relationship with Kushner Companies which involved money laundering is completely made up and totally false.”
McCafferty did not respond to messages left by The Associated Press.
Banks are required to report certain suspicious transactions to the Treasury Department, but have discretion over what triggers a report. Transactions are typically vetted at several levels at banks and many are ultimately not sent to Treasury. Financial institutions reported more than 2 million suspicious transactions last year. Most such reports don’t lead to a criminal case.
In a report in the Times in May, McFadden criticized the bank’s practices, saying it had a pattern of rejecting proposed suspicious activity reports involving prized clients.
Jared Kushner, the president’s son-in-law, was CEO of Kushner Cos before the election, but stepped down afterward to become one of Trump’s senior advisers.
The Times in May also reported, citing anonymous former and current bank employees, that several transactions involving President Donald Trump’s company were flagged at the bank as suspicious but were not passed on to the Treasury Department.
The Trump Organization did not respond to email and text messages from The Associated Press seeking comment.
Two congressional committees have subpoenaed Deutsche Bank documents as part their investigations into President Donald Trump and his company. Deutsche Bank has been one for the few banks willing to lend to Trump after a series of corporate bankruptcies and defaults starting in the early 90s.
Trump had sued Deutsche Bank to stop the subpoenas, but a judge in May ruled against the president.