Philippine Casinos at Center of $80m Heist

Over $80 million in Bangladesh money is missing in one of the biggest digital thefts ever, and Philippine casinos are connected to the caper.

Officials around the world are puzzled after the money was transferred out of Bangladesh’s at the Federal Reserve Bank of New York. The trail first leads to Philippine banks, then to their casinos, which have very little regulation. After this, it’s unknown where the massive fortune went.

United States officials are saying that this case highlights how lax the Philippines’ anti-money-laundering controls are and shows that the Pacific nation is a prime target for political corruption and financial crimes. The U.S. is particularly worried about the Philippine casino industry being exempt from many of the countries money-laundering safeguards.

As the New York Times reports, another problem here is that the Philippines features notable banking secrecy laws that were designed to make the country a bigger financial hub. But, as pointed out by Philippine Senator Sergio R. Osmeña III, they seem more likely to invite money laundering and tax evasion.

“They picked us to launder this money because our system is full of loopholes,” said Osmeña, who heads a committee on financial institutions. “We have been trying to amend these laws for decades, but we can’t get it through congress.”

Whatever the circumstances that led to this giant digital heist may be, this crime has left a trail of destruction in its wake. Bangladesh’s top banker resigned while the country’s officials are trying to point the finger at New York Fed’s top brass.

In their defense, New York Fed says that the $80 million transfer was enacted by proper channels and any problems come from Bangladesh’s end. As for the Philippines, they have been busy questioning local bankers, with some bankers refusing to speak due to rights against self-incrimination.

Those responsible for the heist actually tried to transfer $100 million out of Bangladesh’s New York Fed . However, they misspelled the word “foundation” as “fandation,” which caused a holdup of $20 million destined for Sri Lanka. But they were able to make off with the $80 million that was moved to the Philippines.

Given the sheer size of the theft, U.S. officials will be working with their close ally to try and shore up anti-money-laundering controls and prevent something like this from happening again.