Casinos, money laundering and a scheme to steal $1 billion from the Bangladeshi central bank.

These are just some of the intriguing elements in a murky story shaping up to be one of the biggest documented cases of potential money laundering in the Philippines. It risks setting back the Southeast Asian nation’s efforts to stamp out the use of the country to clean cash, and tarnishing the legacy of President Benigno Aquino as elections loom in May.

The case highlights the threat to any institution -- government or private -- from criminals mounting cyber attacks using real bank codes so orders seem genuine. Bangladesh is the 20th most-cyber attacked country, according to a real time cyber threat map developed by Kaspersky Lab, an international software security company.

“Even as banks continue to harden their defenses against such sabotage, hackers too have upped their game to breach servers by utilizing both technical skills and rogue elements within the financial institutions,” said Sameer Patil, an associate fellow at Gateway House in Mumbai who specializes in terrorism and national security.

Bangladesh Accounts

The story begins in Bangladesh, a country of about 170 million people that’s recently found itself with record foreign reserves thanks to a low wage-fueled export boom and inward remittances. Some of those reserves were held in an account at the Federal Reserve Bank of New York.

Finance Minister Abul Maal Abdul Muhith this week accused the Fed of “ irregularities” that led to the unauthorized transfer of $100 million from the account. The Bangladesh central bank said the funds had been stolen by hackers and that some had been traced to the Philippines.

A Bangladesh central bank official who is part of a panel investigating the disappearance of the funds said Wednesday that a separate transfer of $870 million had been blocked by the Fed. The official requested anonymity because the investigation is private. A Fed spokeswoman said she had no comment when asked about the attempted $870 million transfer.

No Signs

Essentially the dispute is about whether the Fed went through the right procedure when it received transfer orders.

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