BB�s stop payment orders vague: RCBC

The Rizal Commercial Banking Corporation (RCBC) yesterday said the bank could have immediately held the stolen USD 81 million if the Bangladesh Bank had only sent "high priority messages", reports ABS-CBN News. Macel Estavillo, the head of RCBC’s legal and regulatory affairs, said though the Bangladesh Bank did send three requests for a freeze on February 9, the messages were "vague" and "ambiguous". The RCBC could have reacted promptly if it had received an MT192, the code for a request for cancellation or stop payment order, she added. “The Bangladesh Bank did not send us any high priority message. They did not send us any stop payment order. They just sent us an unauthenticated free format message or a 999,” Estavillo told senators at the Senate Blue Ribbon investigation into the money laundering scandal.
Estavillo said that on February 9, the banking day after a three-day-long weekend, the RCBC received a total of 790 messages in the SWIFT system, but none of those was an MT192. SWIFT (Society for Worldwide Interbank Financial Telecommunications) is the messaging system used by banks worldwide to transmit funds. As there were no apparent red flags, Estavillo said all messages were deemed to be of "normal priority" and thus opened sequentially. She said that at 11:22am on February 9, the bank's settlements department opened and read an MT999, or a bank-to-bank text message, recalling funds sent to the account of a certain “Alfred Santos Vergara.”  The account was later discovered by the RCBC to be fictitious. The MT999 was forwarded to RCBC Jupiter, Makati branch.
Estavillo said the “normal priority” message from Bangladesh Bank read: “Please be informed that this is a doubtful transaction. You are requested to stop the payment and, if you have already made payment, then freeze the account of the beneficiary for proper investigation. We think the transaction is contradictory to the anti-money laundering law.” However, three minutes earlier, at 11:19am, USD 19.95 million had already been transferred to the purported account of William Go, which was also discovered later by the RCBC to be an unauthorised account.
Estavillo said a similar recall message from Bangladesh Bank was read by the settlements department at 11:25am in relation to the ‘Enrico Teodoro Vasquez’ account. It was also sent to the RCBC Jupiter branch. She also said that at 10:24am, USD 15.216 million from the Vasquez account was already transferred to another account. The receiving account refused to sign a waiver, which hinders the RCBC from discussing details of the transaction, she added.
At 11:34am, or nine minutes after the message from the Bangladesh Bank was received, another transfer from the Vasquez account, this time to Go’s account, was made for USD 9.76 million. The third freeze order request from the Bangladesh Bank was read at 11:30am on February 9, pertaining to the account of a certain Christopher Lagrosas. But Estavillo said the transfer of funds of USD 22.7 million had already been made from the Lagrosas account to Go’s account on February 5 at 3:16pm. Another transfer of USD 7.23 million was made to Go’s account five minutes after the bank read the freeze order request at 11:35am. According to Estavillo, there was nothing to indicate that the messages had been sent by the central bank of Bangladesh. “We didn’t know that it was the central bank of Bangladesh, we just thought it was a regular bank,” she said.
She noted that alarm bells started to ring on February 10, when the wording of the messages from Bangladesh became clearer. The “normal priority” message, pertaining to the account of Michael Francisco Cruz, was read by RCBC’s head office at 2:41pm.
Estavillo said the message from the Bangladesh Bank on February 10 read: “Please be informed that this is a fraudulent transaction and unauthorised access in our SWIFT system. So you are requested to stop the payment, and if you have already made the payment, then freeze the account of beneficiary.” Estavillo said the message sent on February 10 was more direct compared to the messages sent on February 9, which “used very vague terms”. “Perhaps it was also not clear to them what had happened on February 9, because it was not clear, based on their emails sent. We have received many stop payment orders, but never those as ambiguous as these messages,” she added.
Estavillo emphasised that since Go’s account was private, the RCBC did not have any authority to freeze the account and stop the withdrawal. She also noted that the branch manager at RCBC Jupiter, Maia Santos-Deguito, could also have alerted the head office but decided to push through with the transactions.
Meanwhile, the Philippines’ Rizal Commercial Banking Corporation (RCBC) yesterday said it is prepared to raise and return the balance of the $81 million stolen from the central bank of Bangladesh if ordered to do so.
“If we are found liable, I would recommend to the board to set aside certain money,” Lorenzo Tan, RCBC president and CEO, who is on leave, told the Senate Blue Ribbon committee at the resumption of its inquiry into how the money made its way to the country until eventually disappearing into casinos.
However, Bangladesh Bank spokesman and executive director Subhankar Saha told UNB that he has no knowledge about the latest state of the hearing. “But two officials of the central bank are now in Manila to maintain communications with the Philippines authority. They might have better information on the issue,” he said. On February 5, hackers stole the funds from a current account that Bangladesh Bank held with the Federal Reserve Bank of New York, transferring the cash electronically to fictitious accounts in RCBC. The money was then allegedly consolidated into a single dollar account in the name of Filipino-Chinese businessman William S Go, who later claimed his signature was forged. RCBC then wired the funds from the supposed Go account to Philrem Service Corp, which converted the dollars to pesos and delivered it to Bloomberry Resorts Corp’s Solaire Resort and Casino, casino operator Eastern Hawaii Leisure Co Ltd, and junket promoter Weikang Xu. During Tuesday’s hearing, Senator Ralph Recto noted that junket operator Kim Wong had returned $4.6 million and P38 million (around $8.24 million) to the Anti-Money Laundering Council, while around $17 million is still with Philrem, report Philippines media.

 

BB�s stop payment orders vague: RCBC

The Rizal Commercial Banking Corporation (RCBC) yesterday said the bank could have immediately held the stolen USD 81 million if the Bangladesh Bank had only sent high priority messages, reports ABS-CBN News. Macel Estavillo, the head of RCBCs legal and regulatory affairs, said though the Bangladesh Bank did send three requests for a freeze on February 9, the messages were vague and ambiguous. The RCBC could have reacted promptly if it had received an MT192, the code for a request for cancellation or stop payment order, she added. The Bangladesh Bank did not send us any high priority message. They did not send us any stop payment order. They just sent us an unauthenticated free format message or a 999, Estavillo told senators at the Senate Blue Ribbon investigation into the money laundering scandal. Estavillo said that on February 9, the banking day after a three-day-long weekend, the RCBC received a total of 790 messages in the SWIFT system, but none of those was an MT192. SWIFT (Society for Worldwide Interbank Financial Telecommunications) is the messaging system used by banks worldwide to transmit funds. As there were no apparent red flags, Estavillo said all messages were deemed to be of normal priority and thus opened sequentially. She said that at 11:22am on February 9, the banks settlements department opened and read an MT999, or a bank-to-bank text message, recalling funds sent to the account of a certain Alfred Santos Vergara. The account was later discovered by the RCBC to be fictitious. The MT999 was forwarded to RCBC Jupiter, Makati branch. Estavillo said the normal priority message from Bangladesh Bank read: Please be informed that this is a doubtful transaction. You are requested to stop the payment and, if you have already made payment, then freeze the account of the beneficiary for proper investigation. We think the transaction is contradictory to the anti-money laundering law. However, three minutes earlier, at 11:19am, USD 19.95 million had already been transferred to the purported account of William Go, which was also discovered later by the RCBC to be an unauthorised account. Estavillo said a similar recall message from Bangladesh Bank was read by the settlements department at 11:25am in relation to the Enrico Teodoro Vasquez account. It was also sent to the RCBC Jupiter branch. She also said that at 10:24am, USD 15.216 million from the Vasquez account was already transferred to another account. The receiving account refused to sign a waiver, which hinders the RCBC from discussing details of the transaction, she added. At 11:34am, or nine minutes after the message from the Bangladesh Bank was received, another transfer from the Vasquez account, this time to Gos account, was made for USD 9.76 million. The third freeze order request from the Bangladesh Bank was read at 11:30am on February 9, pertaining to the account of a certain Christopher Lagrosas. But Estavillo said the transfer of funds of USD 22.7 million had already been made from the Lagrosas account to Gos account on February 5 at 3:16pm. Another transfer of USD 7.23 million was made to Gos account five minutes after the bank read the freeze order request at 11:35am. According to Estavillo, there was nothing to indicate that the messages had been sent by the central bank of Bangladesh. We didnt know that it was the central bank of Bangladesh, we just thought it was a regular bank, she said. She noted that alarm bells started to ring on February 10, when the wording of the messages from Bangladesh became clearer. The normal priority message, pertaining to the account of Michael Francisco Cruz, was read by RCBCs head office at 2:41pm. Estavillo said the message from the Bangladesh Bank on February 10 read: Please be informed that this is a fraudulent transaction and unauthorised access in our SWIFT system. So you are requested to stop the payment, and if you have already made the payment, then freeze the account of beneficiary. Estavillo said the message sent on February 10 was more direct compared to the messages sent on February 9, which used very vague terms. Perhaps it was also not clear to them what had happened on February 9, because it was not clear, based on their emails sent. We have received many stop payment orders, but never those as ambiguous as these messages, she added. Estavillo emphasised that since Gos account was private, the RCBC did not have any authority to freeze the account and stop the withdrawal. She also noted that the branch manager at RCBC Jupiter, Maia Santos-Deguito, could also have alerted the head office but decided to push through with the transactions. Meanwhile, the Philippines Rizal Commercial Banking Corporation (RCBC) yesterday said it is prepared to raise and return the balance of the $81 million stolen from the central bank of Bangladesh if ordered to do so. If we are found liable, I would recommend to the board to set aside certain money, Lorenzo Tan, RCBC president and CEO, who is on leave, told the Senate Blue Ribbon committee at the resumption of its inquiry into how the money made its way to the country until eventually disappearing into casinos. However, Bangladesh Bank spokesman and executive director Subhankar Saha told UNB that he has no knowledge about the latest state of the hearing. But two officials of the central bank are now in Manila to maintain communications with the Philippines authority. They might have better information on the issue, he said. On February 5, hackers stole the funds from a current account that Bangladesh Bank held with the Federal Reserve Bank of New York, transferring the cash electronically to fictitious accounts in RCBC. The money was then allegedly consolidated into a single dollar account in the name of Filipino-Chinese businessman William S Go, who later claimed his signature was forged. RCBC then wired the funds from the supposed Go account to Philrem Service Corp, which converted the dollars to pesos and delivered it to Bloomberry Resorts Corps Solaire Resort and Casino, casino operator Eastern Hawaii Leisure Co Ltd, and junket promoter Weikang Xu. During Tuesdays hearing, Senator Ralph Recto noted that junket operator Kim Wong had returned $4.6 million and P38 million (around $8.24 million) to the Anti-Money Laundering Council, while around $17 million is still with Philrem, report Philippines media.