US Court warns PH defendants in Bangladesh heist to answer raps

Angela Ruth Torres (left), former Customer Relations Officer of RCBC-Jupiter Branch, and former RCBC Jupiter branch manager Maia Santos-Deguito at the 2016 Senate Blue Ribbon Committee inquiry into the laundering of $81 million stolen from Bangladesh Bank which was deposited into bank accounts in RCBC’s Jupiter branch in Makati City. —Inquirer file photo/Lyn Rillon

MANILA, Philippines — A United States court has ordered the defendants in the case filed by the central bank of Bangladesh relating to the cyber heist in 2016 to answer to complaints filed against them or face default judgment that would compel them to pay the full amount of damages sought by the complainant.

In February 2016, the Bangladesh Bank found more than $100 million missing from its account at the Federal Reserve Bank of New York.

The bulk of the stolen funds found their way into a branch of Rizal Commercial Banking Corp. (RCBC), then converted into pesos by remittance companies, and eventually disappeared in the casinos.

Defaulting defendants

In a notice that appeared in the newspaper on Dec. 4, the Supreme Court of the State of New York gave the defendants 28 days from the first publication of the notice to respond to summons and the complaint filed by Bangladesh Bank.

Named as “defaulting defendants” for “failing” to answer to the case were spouses Michael and Salud Bautista—owners of local remittance firm Philrem Service Corp.—as well as Maia Santos Deguito, the convicted ex-branch manager of RCBC, and Angela Ruth Torres, a former employee of the Yuchengco-led bank.

Failure to respond within the deadline would result in default judgment “in the full amount of damages sought by the plaintiff.”

The court said Bangladesh Bank, which had pegged the amount of lost cash at $101 million, is seeking damages that include returning the remaining stolen funds amounting to $81 million and “interest and attorneys’ fees, to be determined at trial.”

Continuing case

”Answering papers, if any, shall be served at least seven days before the December 16, 2024 Return Date of this motion,” the notice read.

Bangladesh Bank had filed cases to recover the stolen funds that were initially blamed on North Korean hackers.

Some of the funds were transacted via correspondent banks in New York before being wired to fictitious accounts at RCBC.

After years of investigation, however, only one individual was indicted in the case.

The Makati Regional Trial Court Branch No. 149 in 2019 found branch manager Deguito guilty of violating Republic Act No. 9160, or the Anti-Money Laundering Act.

‘Unjust enrichment’

This prompted the Bangladesh Bank to file a year later a complaint against RCBC, its officers, and other parties before the New York Supreme Court for alleged conversion, conspiracy, fraud and “unjust enrichment,” among others.

The high court on Feb. 29 this year dismissed three causes of action (conversion, aiding and abetting conversion, and conspiracy to commit conversion) against RCBC and the defendants linked with the bank.

However, trial on the other courses of action will proceed, the New York Supreme Court had said.

RCBC has since been reiterating that it would continue to defend the case.