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In Bangladesh Bank Hacking Case SDNY Judge Dismisses Only Federal Claim Amid COVID 19 Slowdown

By Matthew Russell Lee, Patreon

FEDERAL COURTHOUSE, March 23 – The Bangladeshi Central Bank which was hacked for $81 million in February 2016, on January 31 sued in the US District Court for the Southern District of New York. The first pre-trial conference in the case was held on May 21; on July 19 Bangladesh Bank opposed the defendant's motions to dismiss for forum non conveniens and lack of subject matter jurisdiction.

 Now in late March 2020 amid Coronavirus, with little activity in the SDNY courthouse except for criminal arraignments and bond hearings to get detainees out of the jails that now, at least in the case of the MDC in Brooklyn, have COVID-19 cases, this: "OPINION AND ORDER re: [139] JOINT MOTION to Dismiss the complaint on forum non conveniens grounds. filed by Rizal Commercial Banking Corporation, [136] JOINT MOTION to Dismiss For Lack Of Subject Matter Jurisdiction. filed by Bloomberry Resorts and Hotels, Inc. For the foregoing reasons, the motion to dismiss Count VII of the Complaint -- the only federal claim -- is GRANTED, and the Court declines to exercise supplemental jurisdiction over the remaining state law claims. The motions to dismiss for lack of subject matter jurisdiction and under the forum non conveniens doctrine are DENIED. The Clerk of Court is respectfully directed to close Dkt. Nos. 136 and 139. (As further set forth in this Order.) (Signed by Judge Lorna G. Schofield on 3/20/2020)." Inner City Press, covering the SDNY court daily, will have more on this.

 On related obstruction news, in a letter dated August 20 the US Federal Reserve Board upheld its own denial of documents about Bangladesh Bank with Inner City Press requested under the Freedom of Information Act. More here including the Fed's letter on Patreon, here. We'll have more on this.

  Rizal Commercial Banking Corporation's Ismael Reyes has started a separate ex parte action in the SDNY, seeking discovery against Bank of New York Mellon. That case has been assigned a separate number: 19-cv-7219.

  Bangladesh Bank responded on August 19, telling SDNY Judge Lorna G. Schofield that "Defendants did not clarify that the 1782 procedure does not work against crucial governmental discovery sources, like the FBI and possibly the New York Fed, pointing instead to the vastly more limited FOIA process."  So it is apparently unclear if Section 1782 applies to the Fed; that the Federal Reserve limits - and delays - FOIA, Inner City Press can attest to. We'll have more on this.

  Earlier, Bangladesh Bank wrote that "[t]he robbery was in New York City, not a foreign country, attacking a decades-old account in the New York. It involved the New York Fed, perhaps the most critically important bank in New York City. The conspirators also needed New York-based correspondence accounts to accomplish the theft." In its other brief it adds, "Since 1973, the Bank has held its foreign reserves at the New York Fed in order to conduct Bangladesh’s international transactions in U.S. dollars. Id. ¶¶ 37-40. Today, the Bank conducts 85% of its international transactions in the U.S. dollar, through its New York Fed account, that holds a daily average of $1.5 billion."

  Back in March Inner City Press submitted a request under the US Freedom of Information Act to the US Federal Reserve about its role in and action on the Bangladesh Bank heist. After four months of delay from the Fed, and an appeal by Inner City Press of their constructive denial, the Fed finally ruled on June 27 - releasing only one page, a two paragraph cover letter.

  This is the opposite of transparency. Inner City Press on June 29 submitted an appeal: "Dear Governor in charge of FOIA Appeals:  On behalf of Inner City Press / Fair Finance Watch (ICP), this is a near immediate FOIA appeal of FRB absurd denial by providing only one page, a two paragraph cover letter, in response to Inner City Press' FOIA request four months ago regarding the Federal Reserve's role in and action on the Bangladesh Bank heist      As you must know, agencies are request to provided all reasonably segregable information and are not allow mass withhold, as here. Beyond the Bangladesh Bank, to withhold in full records about the oversight by the Board over the Reserve Bank is an outrage. See also Inner City Press' timely comments on the FRB's current proposals to modify - and weaken - its FOIA responsibilities.   

We requested and request: records regarding the Federal Reserve System's [role] including the FRBNY's role in what is known as the Bangladesh Bank hack or cyber heist and assistance provided to Bangladesh Bank and investigative authorities since the heist, including but limited to in connection with the SDNY case Bangladesh Bank v Rizal Commercial Banking Corp et al, U.S. District Court, Southern District of New York, No. 19-00983.  and, for the record, from Inner City Press' May 21 submission: " First, the FRB denied the request for expedited processing, finding no threat of physical harm (??) and also reciting and presumably denying under this standard:     "[t]he requester is a representative of the news media ... and there is urgency to inform the public concerning actual or alleged Board activity.”     Still, the Fed in further extending its time said there would be response by April 2. There has been none, nothing at all.   Today in the SDNY counsel for Bangladesh Bank directly referred to the Federal Reserve. The Fed's delay, contrasted to the fast if bad faith turn around on Inner City Press' BB&T money laundering enforcement action termination FOIA, is in this context unacceptable, even a cover up.    This is an appeal. The FRB should provide an explanation of nothing since April 2, and the long ago requested documents."    Inner City Press is hereby appealing from the withholding, demanding that all segregable information be provided, immediately." Now the Fed, still withholding documents, has other concerns. Watch this site.

In the SDNY, the case is (now was) Bangladesh Bank v Rizal Commercial Banking Corp et al, U.S. District Court, Southern District of New York, No. 19-00983.


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