Inside connivance in Bangladesh Bank’s SWIFT theft?
12 December, 2016
“Bangladesh Bank’s SWIFT network was made insecure by some bank employees in connivance with some foreign people,” Dhaka police investigator said. “They knew what they were doing.”
He said investigators were now trying to find out how the mid-ranking officials were connected to the hackers and whether they benefited financially from the heist. Asked if the officials would be arrested, Alam said: “We are very close to it.” $81 million was successfully transferred purportedly for payments in relation to Bangladeshi infrastructure projects, including bridges, a power station and the Dhaka metro to four fake accounts in a branch of Rizal Commercial Banking Corp (RCBC) (RCB.PS) in the Philippines. A dollar account is opened at RCBC in the name of William So Go, who denies involvement. Funds transferred via that account and via Philrem, a remittance company: About $29m then made its way into accounts held by Bloomberry Resorts and $21m to Eastern Hawaii Leisure Company, with another $31m delivered in cash by Philrem to an individual by the name of Weikang Xu, described by one Bloomberry representative as a “junket agent” organising trips for gamblers. The four RCBC accounts that initially received funds were frozen, as well as the accounts of Eastern Hawaii; Kam Sin Wong, one of the signatories to the account of Eastern Hawaii; Mr Go, and his Centurytex Trading business. On February 29 the story of the scam was broken by the Philippine Daily Inquirer.Cyber security experts do not think such inside persons would have been essential for a crime that could have been committed from outside by sophisticated criminal hackers from eastern Europe or elsewhere.
[March 12 $81 million stolen by hackers, an internal investigation is ongoing ]
Bangladeshi Finance Minister Abul Maal Abdul Muhith March 8 accused Federal Reserve Bank of New York of “irregularities” that led to the unauthorized transfer of $100 million from the account of Bangladesh central bank. The funds had been stolen by hackers and some had been traced to the Philippines. The money was converted into pesos and deposited through a branch of Rizal Commercial Banking Corp.in the account of an unidentified Chinese-Filipino businessman who runs a business flying high net worth gamblers to the Philippines. Four requests to transfer a total of about $81m to the Philippines went through, but a fifth, for $20m, to a Sri Lankan non-profit organisation was held up because the hackers misspelled the name of the NGO, Shalika Foundation, leaving $81 million unaccounted for. Initially, the Sri Lankan transaction reached Pan Asia Banking Corp, which went back to Deutsche Bank for more verification because of the unusually large size of the payment, a Pan Asia official said.
Hackers misspelled “foundation” in the NGO’s name as “fandation”, prompting a routing bank, Deutsche Bank, to seek clarification from the Bangladesh central bank, which stopped the transaction, one of the officials said. The hacking of Bangladesh Bank happened sometime between 4-5 February, over the Bangladeshi weekend, which falls on a Friday, the officials said. The bank’s offices were shut.
You have to admit that stealing a hundred million bucks — and attempting to steal almost a billion — is pretty impressive! And all they needed was a SWIFT code. It makes all that hard work in heist flicks like “Ocean’s 11” and “The Italian Job” seem pretty silly by comparison.
The ECB had to resort to negative deposit rates to scare European banks into taking cash out of the Eurosystem and putting it to work elsewhere. Maybe when a hundred million bucks vanishes into thin air from under the nose of the U.S. central bank, it will have an even greater effect!
[October 30 2013 Fines for corporate wrongs cost of business? Brother Circle gangster apparatchiks and Yamaguchi-gumi yakuza group ]
A consumer finance company affiliated with Mizuho, made at least $2 million in small loans to buyers with links to Japan’s organized crime syndicates without properly vetting their backgrounds. The syndicates use the loans to help finance their activities.
Mizuho Bank, which bought and bundled these loans from its affiliate, found gangster-linked loans on its books in 2010 but failed to inform the authorities, according to a report by outside lawyers appointed by the bank to investigate the case.
But the lawyers said they could find no evidence that Mizuho officials intentionally tried to hide the loans from investigators.
Mizuho’s management instead simply “failed to appreciate the gravity of collaborating with organized crime,” Hideki Nakagomi, who headed the panel of lawyers, said on Monday. He acknowledged that many officials at the bank had told the investigators “they did not remember what happened.”
Mizuho, based in Tokyo, announced late on Monday that its president and chief executive, Yasuhiro Sato, would keep his job, though he and 53 other current and past executives will take a pay cut for up to six months. Mr. Sato also serves as president and chief executive of the bank’s parent, the Mizuho Financial Group.
“I apologize from the bottom of my heart,” Mr. Sato said at a news conference, bowing deeply in front of cameras. “I take very seriously the fact that we find ourselves in this situation.”
The group’s chairman, Takashi Tsukamoto, who plays a mostly advisory role at Mizuho, will step down.
The scandal has done little damage to the company’s stock, which actually rose 2.45 percent on Monday after news of the report.
The shady lending came to light after the Japanese banking regulator, the Financial Services Agency, censured Mizuho last month over its handling of the loans. The loans underscore how organized crime groups continue to draw money from the financial system here despite efforts to shut them out.
Used-car loans have long been known to be part of illicit fund-raising schemes run by gangsters. In one often-used method, gang members conspire with a dealer to buy a car — like a slick, black Mercedes-Benz of the type favored by gangsters here — for a far higher amount than the usual asking price, then apply for a used-car loan to cover the inflated price. The scheme gives gangsters access to easy financing; the car can be sold or fitted with new license plates so it can be used to apply for further loans, according to local news reports.
Members of organized crime groups are not supposed to have such access to financing from big banks like Mizuho as a result of a 1991 law that made money-laundering illegal. Since then, the Japanese authorities have bolstered rules requiring that banks more vigorously scrutinize potential clients to check for any ties to organized crime. Mizuho said its loan officials typically checked applications against its nationwide database of known members of organized crime groups and their associates.
But the auto loans in question, about 230 transactions totaling about $2 million, were made by the Orient Corporation, a much smaller consumer financing company affiliated with Mizuho that carried out far less stringent background checks on potential buyers, the report from the outside panel said. Last week, an investigation by the daily Mainichi Shimbun said used-car loans from Orient, known as Orico, were typically approved in about 15 minutes with minimal identification checks that were conducted by fax.
Mizuho periodically bought up bundles of these loans from Orico and did not stringently check each loan, the report said. When some gangster-linked loans came to light during a routine internal inspection, Mizuho instructed Orico not to give further loans to those gangsters. But it did not cut off existing loans or inform the authorities.
The bank initially said that knowledge of the matter went only as far as the bank’s compliance officers but later acknowledged that Mr. Sato and other members of Mizuho’s board had been aware.
Mizuho Financial Group Inc. President Yasuhiro Sato gave up six months of pay for failing to stop loans made to yakuza crime syndicates. Takashi Tsukamoto will also forgo a half year’s compensation and give up his role as chairman of Mizuho Bank Ltd., keeping his post at the parent company.
No leading bank executives have been jailed since the global financial crisis. The largest lenders are so big that criminal charges could threaten the global economy, U.S. Attorney General Eric Holder said in a Senate hearing this March, saying that made it “difficult for us to prosecute.”
Executive-suite alterations, docked pay and company fines need to be paired with criminal prosecutions, according to Jennifer Taub at Vermont Law School.
“You have to have some kind of pain,” she said, “and some kind of shame.”
The US has targeted organised crime by freezing the financial assets of two groups – Japan’s Yamaguchi-gumi yakuza group and the Brothers’ Circle.
The Brothers’ Circle (f.k.a. Family of Eleven; f.k.a. The Twenty) is a Transnational Criminal Organization, multi-ethnic criminal group composed of leaders and senior members of several Eurasian criminal groups largely based in countries of the former Soviet Union
The Department of the Treasury said it was also freezing the assets of key members, including Yamaguchi-gumi leaders Kenichi Shinoda.and Kiyoshi Takayama
KHRISTOFOROV, Vasily Alexandrovich (a.k.a. KHRISTOFOROV, Vasiliy; a.k.a. “VASYA”; a.k.a. “VOSKRES”), Murjan 6 Sector, Tower D01-T03.1, Apartment 401, Dubai 39409, United Arab Emirates; DOB 12 Mar 1972; POB Gorky Oblast, Russia; National ID No. 76481815 (United Arab Emirates); Passport 63-7186356 (Russia) (individual) [TCO]
KOLBAYEV, Kamchybek Asanbekovich (a.k.a. KOLBAEV, Kamchibek; a.k.a. KOLBAYEV, Kamchy; a.k.a. KOLBAYEV, Kamchi; a.k.a. KOLBAYEV, Kamchibek; a.k.a. “KAMCHI BISHKEKSKIY”; a.k.a. “KOLYA-BISHKEKSKIY”; a.k.a. “KOLYA-KYRGYZ”), Bahar 1 Sector, C09-T02 Tower, Apartment 3203, Dubai 31672, United Arab Emirates; Volokolamskoye Shosse, House 15/22, Moscow, Russia; DOB 3 Aug 1974; alt. DOB 1 Jan 1973; POB Cholpon-Ata, Kyrgyzstan; citizen Kyrgyzstan; Passport A0832532 (Kyrgyzstan) expires 17 Mar 2009 (individual) [SDNTK] [TCO]
LEONTYEV, Vladislav Vladimirovich (a.k.a. LEONTIEV, Vladislav; a.k.a. LEONTIEV, Vlantislav; a.k.a. LEONTYEV, Vyacheslav; a.k.a. LEONTYEV, Vadim; a.k.a. LEONTYEV, Vadik; a.k.a. “BELOBRYSYY”; a.k.a. “BELYY”), Al-Fattan Building, Dubai, United Arab Emirates; DOB 5 Jul 1971; POB Gorky, Russia; alt. POB Caracas, Venezuela; National ID No. 60229551 (United Arab Emirates); Passport AB4065216 (Greece); alt. Passport H2214925 (Ghana); alt. Passport C1602418 (Venezuela) (individual) [TCO]
MANUYLOV, Aleksandr Leonidovich (a.k.a. MANUILOV, Alexander; a.k.a. MANUYLOV, Alexander; a.k.a. “SASHA SAMARSKIY”); DOB 3 Mar 1962; POB Russia; Passport 3056306 (Russia) (individual) [TCO]
RAKHIMOV, Gafur Akhmedovich (a.k.a. RAKHIMOV, Gofur-Arslonbek; a.k.a. RAKHIMOV, Gafur-Arslanbek Akhmedovich), The Meadows, Villa Number 64, Sheikh Zayed Road, near Emirates Hills, Dubai, United Arab Emirates; DOB 22 Jul 1951; POB Tashkent, Uzbekistan; National ID No. 03101200302034752 (United Arab Emirates); Passport CA1804389 (Uzbekistan); alt. Passport CA1890392 (Uzbekistan) (individual) [TCO]
SHAYBAZIAN, Lazar Gurgenovich (a.k.a. SHAYBAZYAN, Lazar); DOB 1 Apr 1966; Passport CA2485930 (Uzbekistan); alt. Passport CA2179793 (Uzbekistan) (individual) [TCO]
SHINODA, Kenichi (a.k.a. TSUKASA, Shinobu); DOB 25 Jan 1942; POB Oita Kyushu, Japan (individual) [TCO]
TAKAYAMA, Kiyoshi ; DOB 5 Sep 1947; POB Tsushimasi, Aichi Prefecture, Japan (individual) [TCO]
ZAYTSEV, Aleksey Alekseyevich (a.k.a. ZAITSEV, Alexei; a.k.a. ZAYTSEV, Alexey); DOB 7 Sep 1965; POB Leningrad, Russia; National ID No. 74914883 (United Arab Emirates); Passport 63-4604880 (Russia); alt. Passport 4103417473 (Russia); alt. Passport H2029462 (Ghana) (individual) [TCO]
YAMAGUCHI-GUMI (a.k.a. ROKUDAIME YAMAGUCHI-GUMI; a.k.a. SIXTH YAMAGUCHI-GUMI), 4-3-1 Shinohara-honmachi, Nada-Ku, Kobe City, Hyogo, Japan [TCO]