Gambling with a billion dollar account, The Lazarus Heist, Episode 7 - BBC World Service podcast

Jean Lee: Thousands of miles from the busy streets of Dhaka, Bangladesh, there is a stunning casino called Solaire. It is located on the seafront in Manila, capital of the Philippines. Geoff White: I was there; I visited to research this history and it is an incredible place: it is a large white stucco building surrounded by the flat docks; It looks like a giant tooth sticking out of the ground. And in 2016, A week after hackers set out to steal a

billion

dollar

s from the Bangladesh Bank, Robi Lin finds herself in the middle of her shift in one of the VIP rooms on the first floor of that building.

Robi is a VIP host and her job is to take care of the casino's richest clients. JL: The last few days have been absolutely crazy. It was the Lunar New Year, Asia's most important holiday and the casino's busiest time of year. Just when it seems like things are getting back to normal... GW: Half a dozen Chinese-speaking guys walk into Robi's VIP area. But there is something strange about them... Robi Lin: The appearance of her was really normal. The way they dressed didn't make them look genuine. They just didn't seem like people who had a lot of money.

GW: Not like the kind of people Robi is used to, with their fancy cars and designer clothes. Robi says that once a client made a deposit of 200 million Philippine pesos, that is, 10 million

dollar

s. JL: And as you can imagine, when you play with that kind of money, you expect superior

service

. RL: The VIP room is like a luxury house. There is a living room, a dining table and a minibar with food and drinks on request. They have their own bathroom. So everything feels really special. Muhammad Cohen: You get the privacy, you get the

service

, you get the personalized attention that you think you deserve.

You know, 'I want a bottle of Hennessy XO.' And you will get it. GW: Muhammad Cohen is a casino expert and editor-at-large of Inside Asian Gaming magazine. He knows how hard it is to be at the beck and call of these types of high rollers... MC: I want a manicure and pedicure for my wife and I want someone to take her shopping. Take her to see the sights of Manila, please. So she doesn't get bored while I do this. And make me my favorite dish when I'm hungry. GW: But how much would you have to bet to get these benefits?

MC: Someone who comes on a weekend and deposits, say, a quarter of a million US dollars, you know, would be in the top class. GW: But that's the thing: Robi can't help but feel that the Chinese who just walked into his VIP area don't look "first class." However, it turns out that your first impression of him is wrong: apparently these guys are absolutely loaded. RL: Suddenly the money they are here to bet appears. And it took them a while to tell it all. There were piles and piles of cash, tall as a mountain. And as a host, I just think, 'Wow, this group is very rich.' Bright'.

JL: He's impressed, but at the same time, the money doesn't seem right to Robi, because these men aren't regular customers. RL: Our VIP guests are usually high-profile people. Then we would know his background. But who are these people? How come they have so much money? Until now we had never heard of them. But it's when the men start playing that Robi and his companions notice some really strange things. RL: Almost every day they followed the same routine: they played from 8 in the morning until 11:30. Then stop at lunch time. He takes her chips to his hotel room.

And the next day, the same. They came back, sat down and played from 8 to 11:30. JL: It's like they treat the game like a normal job. RL: So I assumed that these people must have a boss, because they followed a very strict routine. GW: But what stands out most to Robi are the men's reactions to the games they play. These guys just don't seem to care if they win or lose. RL: People who play games are usually quite tense. And when they lose, they seem heartbroken. And when they win, they are delirious. These people didn't seem to have any reaction in any way.

Unenthusiastic. They just act like nothing happened. JL: There's a good reason why these men behave so strangely. They are hiding a secret. It's not their own money they're playing with. It is money stolen from Bangladesh Bank. GW: They are part of the plot to steal the bank's money. It's not like the movies: no fast cars, no screeching tires, no loud soundtrack. But the process of escaping with the money will be as tense as in the movies and, like any good getaway driver, the criminals who robbed the bank will need careful planning, nerves of steel and great timing to pull it off. everything works.

JL: The bank robbery has moved on to its next phase. The escape. GW: And if these men and their accomplices play their cards right - literally - they can ensure that Bangladesh never sees that money again. MUSIC From the BBC World Service, this is The Lazarus Heist I'm Geoff White I'm Jean Lee Episode 7: Korean Roulette GW: The Bangladesh Bank raid began in January 2015, when investigators say Lazarus Group hackers of North Korea gained access to the bank's computer systems for the first time. But the money wasn't actually stolen until a year later. What were you doing during those 12 months?

Turns out quite a bit. JL: In May 2015, four

account

s are opened in a branch of a Philippine bank called RCBC. The bank is on Jupiter Street in the capital Manila. GW: After creating the four

account

s... well, nothing happens. They sit idle month after month, with their initial deposit of US$500 intact. JL: And suddenly, on Monday, February 8, 2016, immediately after the cyber attack on Bangladesh Bank, those account holders became millionaires overnight. GW: Michael Cruz receives 6 million dollars, JL: Jessie Lagrossa 30 million dollars GW: Alfred Vegara receives almost 20 million dollars JL: Enrico Vásquez 25 million dollars In total, the Lazarus Group hackers transferred 81 million dollars of the Bangladesh Bank accounts to these four people.

GW: So account holders are rushing to withdraw money? Are they happily planning how to spend their millions? No. Because they don't exist. FILE: Philippine Senate The account holders were found to have fake addresses. The account holders' identification documents, such as driver's license cards, were found to be fake. He is Senator Teofisto Guingona, chairman of the Philippine Senate inquiry that was set up to unravel what happened to the Bangladesh Bank money once it arrived in Manila. And he has a big job on his hands. Fake accounts are just the beginning. As his committee investigates, they discover that the Jupiter Street bank branch hides many very disturbing secrets.

GW: When I went to Manila, I visited Jupiter Street because I wanted to see the RCBC bank where the hackers transferred their stolen millions. I wasn't sure what to expect. In the end, what I found was a single unit, sandwiched between an eco-hotel and a dental office. Standing at the door was something seen in many financial institutions in Manila. A bored looking security guard brandishing a frighteningly large pump shotgun. And for me, that summed it up. This bank was prepared for a physical attack through the front door. Apparently, what they were least prepared for was a mass crime that occurred digitally through the back office.

JL: As the Philippine Senate committee is about to discover, this small bank branch is going to play a vital role in the Bangladesh Bank

heist

. GW: When the stolen $81 million arrives that week in February 2016, a flurry of activity begins at the RCBC branch. First, the $81 million begins to move between different accounts MIX OF VOICE OF PEOPLE READING TRANSFERS $22,735,000 transferred from Jessie Lagrosas to account number 9016455240 $14,200,000 from account number 9016455240 to account number 8278007651 23,725,000 Pesos transferred to account number 90 1027206 $13,500. 000 negotiated for 640,980,000 pesos. .. JL: Some of the money is sent to an exchange house, where it is changed into the local currency, pesos, and then redeposited into other accounts at the RCBC branch.

GW: The Senate committee hears testimony from a bank employee who tells an extraordinary story. When he appears in the committee room, reserve officer Romauldo Agarrado appears terrified at the prospect of giving his testimony, which he does in a mix of English and Filipino. FILE: For the, for the, (speaks in Filipino). Take your time, I know you're a little tense but it's okay JL: Then Romauldo goes on to tell what he sees after the money arrives at the bank. As you may remember, it's a long weekend in the Philippines, an Asia-wide holiday for the Lunar New Year.

But according to Romauldo, the RCBC branch on Jupiter Street is bustling with activity that Monday. FILE: (Romauldo speaking in Filipino language) GW: What Romauldo says he witnessed was unlike anything he had ever seen at my local bank branch. He says some of the money transferred to the accounts, about $400,000, is placed in a cardboard box and loaded into the bank manager's own car. FILE: His car at the time was parked outside the branch. Does your CCTV of him allow it? JL: That's a good question from one of the committee members, Senator Vicente Sotto: what about the bank's surveillance cameras?

Surely they would have captured all of that? FILE: Unfortunately / That was the time when the CCTV doesn't work, okay. GW: That's right, the bank's surveillance cameras are out of operation the entire time all of this is happening, another sign that whoever planned this part of the

heist

had put a lot of planning into it, and may have even able to access the bank's surveillance systems. What about the bank manager? FILE: The brand manager is Miss… / The branch manager is Maia Deguito. / So she was your boss? / Yes she was. JL: So what was Maia Deguito, manager of the Romauldo branch, thinking while all this was happening?

As millions of dollars digitally flew through the bank, were some of them loaded into your own car? GW: Romauldo says he asked him about all the suspicious money transfers, and the response he receives is chilling: ARCHIVE: (Romauldo quoting Maia Deguito) 'I would rather do this than have myself or my family killed' JL: Threats of death, broken CCTV, cash in cardboard boxes, multi-million dollar transfers. The arrival of stolen money from Bangladesh has sparked deeply suspicious activity. And the only key person who could explain everything to us is the branch manager. We spoke with his lawyer, Ferdinand Topacio.

He denies Maia received death threats but admits she was terrified when she first came to him for help in the weeks after the money passed through her bank branch. He says RCBC had launched an internal investigation and Maia was... Ferdinand Topacio: ...scared. She was distraught. She knew she would lose her job. GW: The committee hearings had raised serious concerns about what happened at her branch. So my first question was obvious: GW: Wasn't it a little suspicious that the money arrived at the branch, was loaded into tills, loaded into cars and taken out? That doesn't seem very common.

FT: Well, you have to understand the banking culture here. In the cases of what they would call valuable customers, bank managers go beyond the call of duty to please them, always keeping the average daily balance in mind. GW: Well, in this case she went above and beyond the call of duty by participating in a fraud, it sounds like FT: Well, ultimately what happened was a fraud. But I'm not saying my client is innocent. It's just that she was the victim of a confluence of events that made it seem like she was the only one here. She may have been negligent.

She may have been too trusting. But a simple bank manager could not have achieved something of this magnitude. Here in this country the law is like a spider web. Only a few are trapped. The great ones pass. JL: This was Maia Deguito's argument all along, and this is also what she said in a statement at the Senate hearing. FILE: (Statement of Maia Deguito) I am nothing more than a pawn in a high-stakes chess game played by giants of international banking and high finance. If this committee is looking for the grandmaster, it's not me. In retrospect, I have inadvertently allowed myself to become the scapegoat when all I wanted was to advance my career and, along with my husband, help support my family.

GW: That broken CCTV? Maia says that she had reported it to her boss and that it wasn't her job to fix it. The fake IDs used to set up the accounts that received the stolen money? Maia says it wasn't her job to review them, it was up to the head office. She seemed to have an answer for everything. But she still had questions for her lawyer... GW: So you have a situation where the books are opened. Maia Deguito says she met the people, got their IDs and so on. Then, all of a sudden, there's a lot of money, a huge amount of money, flowing into theseaccounts.

Maia Deguito is obviously worried about it, but she was told to move on. The CCTV is out of service. If I were the bank manager, I would call the police. Why didn't she do it? FT: Well, she didn't see anything wrong with that transaction after the head office gave it the green light. That's all. If she had not been given any sign to go or if head office had remained silent, I am sure she would have taken other steps to ensure the money would have been protected. GW: I guess Maia Deguito says they told her: let this money go?

FT: Yes, we have the emails to prove it. GW: Maia Deguito herself is not available for an interview because she has been convicted in connection with the robbery. She is appealing against it, but as things stand she has been sentenced to 56 years in prison and a $109 million fine; That's more, of course, than the $81 million she accused of helping launder. We approached the RCBC headquarters to obtain a response to Maia Deguitoy's accusations from her lawyer, but they have not responded to us. In previous media statements, RCBC said Deguito's conviction showed he was the "victim" and that the former manager was a "rogue employee." Hackers may have stolen many millions from Bangladesh Bank accounts, but they are not out of the woods yet.

They know that investigators will now be after them and will try to trace the money through the computer systems of the various banks. And if it can be traced, the bank can potentially recover it. JL: In the end, Maia Deguito's RCBC bank branch had been used to play a basic but vital role in the heist. The idea was to move the money quickly to mislead investigators. It's classic money laundering. GW: And it doesn't stop at the bank. The criminals will go much, much further: they will end up in the glamorous

world

of Manila casinos. And this is where North Korea's international network would come in handy.

We are on the trail of $81 million stolen from Bangladesh Bank. But stealing it was, in a way, the easy part. Moyara Ruehsen: The issue of money laundering is the most difficult for criminals. Turning all that criminal proceeds into clean cash that they can then use is a big challenge. JL: Moyara Ruehsen is director of the Financial Crimes Management Program at the Middlebury Institute of International Studies in Monterey, California. GW: She's an economist by training and, in the early 2000s, she realized that, apart from bankers and lawyers, there weren't many people investigating money laundering, she says. And so, after 9/11, she became one of the first scholars to study how terrorism was financed.

MR: And she has since dedicated herself to funding weapons of mass destruction programs, particularly what North Korea has been doing. GW: Basically what happened was this. Moyara made a video for Vanity Fair talking about money laundering in Hollywood movies and how it would work in real life. And I just thought the video was cool, so when I was looking for someone to explain to me how the North Korean regime might proceed with money laundering (claims they strongly deny, of course), I went to Moyara. GW: I guess the question would be why is it necessary for criminals to launder money?

If I've stolen a million dollars, what's stopping me from just going out, spending it, and having a good time, I guess? MR: Yes, exactly. So even if I raise a lot of money from cybercrime or drug trafficking and then use that money to buy a house. If investigators can link the purchase of that house to the original funds derived from the crime, they can seize my house. So you have to really disguise the connection to protect everything you do with the money afterwards. JL: The key to the process, she says, is to put as many obstacles as possible in the path of people trying to track down the loot.

MR: You want the money trail to be as confusing and obscure as possible. GW: By the way, we're not going to reveal any big secrets here; What Moyara is about to explain are the general principles, and they are well known, since they are on the Internet. And furthermore, knowing the principles is far from being able to really apply them. GW: Can you explain to me the classic stages you would go through in a money laundering operation? MR: The first stage, of course, is to put that dirty money into the financial system. And that is probably the most challenging stage for a criminal, because it is the stage in which investigators are most likely to flag suspicious activity.

JL: The Lazarus Group hackers who broke into Bangladesh Bank know all about those red flags, because they had already faced them. So their original plan had been to steal $951 million by transferring it from Bangladesh's account at the Federal Reserve Bank of New York. GW: But the Federal Reserve had detected the transfers because hackers had sent the money to the Jupiter Street bank. It turns out that Jupiter was the name of an Iranian ship that was on a sanctions list. Then the Federal Reserve stopped many of the transfers. JL: But before the Federal Reserve hit the brakes, $100 million came in. 81 million dollars of which had been transferred to that bank in Manila.

So from now on, hackers don't want any more red flags. They want to make sure money passes smoothly through the financial system. Now they can start removing it from the bank and taking it to the next stage of the washing process. GW: After the money is laundered at RCBC bank, a portion of the $81 million is withdrawn in local currency, pesos. And we are talking about A LOT of pesos. Rodolfo Noel Quimbo: The average is that one million pesos is equivalent to approximately one kilo of bills. So half a

billion

pesos is about 500 kilos. Rodolfo Quimbo. He is head of the Philippine Senate committee that investigated the heist.

He's talking about half a TON of cash - that's the weight of a grand piano. RQ: Two Chinese people picked it up with assistants who would load the money into their cars. So how do you load five hundred kilos into a car so quickly? Which means they had to have trucks. They had to have people carry those bills because 500 kilos are not necessarily capable of being carried by a single person. This was a great operation. GW: Rodolfo's Senate committee manages to uncover the fact that this cash, which amounts to about $30 million, is paid to a Chinese man named Weikang Xu.

So now he has a big chunk of the $81 million stolen from Bangladesh Bank. Great, maybe this Weikang Xu guy can shed some light on all this? JL: Unfortunately, no. When the committee chairman asks about him, he receives this response from the Philippine anti-money laundering authority: FILE: We received information that this Mr. Weikang Xu probably left the country on a private plane, Your Honor. FILE: (President) I guess if it's a private plane, you still have to go through immigration. What did Immigration say? / They have no record of his departure, Your Honor. JL: So, of the $81 million, mystery man Weikang Xu takes $30 million;

Some speculated it was his payment for organizing the operation, although Philippine authorities say there was insufficient evidence for a prosecution. After Xu's departure, there is now $51 million left in the Philippines. GW: Surely the criminals have already done enough to move that money out of the reach of investigators? Not really. The people chasing them can still (pretty much) track you. So what criminals need now is a solid way to ensure that investigators can never recover it. JL: It's time to move on to the next stage in the money laundering process: layering. MR: The layering stage is the most interesting part of money laundering.

What we as researchers study is what I teach my students in my program. JL: Moyara says it's about transforming money so that it can't be traced. MR: There are several things you can change. Therefore, you can convert dollars into cryptocurrencies, or dollars into British pounds, gold, or some other type of asset. You can move it into real estate or stocks and then sell those real estate and stocks. JL: Forget real estate and stocks. In the case of Bangladesh Bank, criminals had a much more interesting option to accumulate that stolen money... GW: When I was in Manila, after visiting the RCBC bank branch, I went to the Solaire casino.

It is a beautiful place, overlooking the seafront. Plus, it's the only place in the

world

where I've been offered a “bag stool.” I went to have a drink at the bar and the waiter offered me a little chair to put my bag on. I had no idea these things existed. I guess if you just bought a Louis Vuitton bag, you don't want to throw it on the floor. Although my backpack looked a little weird sitting on a chair. However, this was the place where Robi was working in 2016 when those half-dozen Chinese players arrived. As you probably already realized, the millions of dollars they brought with them in piles were part of the money stolen from Bangladesh Bank.

JL: After laundering the money through the RCBC bank branch and giving Weikang Xu his $30 million, there is $51 million left. It's split between two casinos: about $30 million is transferred to accounts at the Solaire and about $20 million is transferred to a smaller one across town called, guess what? The Midas. Players in Robi's VIP room at the Solaire are not the only group using this money. Throughout Manila, there are several teams attacking the two casinos with the stolen money. But they're not just there to enjoy the stools and free drinks. GW: Clearly the criminals had a plan on how to use the casinos, this was another part of their money laundering plan, right?

But why would you go to a casino to launder money? Moyara Ruehsen has the answer for us: MR: Imagine I'm a criminal with a lot of dirty money. I convert that money into chips, into casino chips. I play a little. Try not to lose a lot of money. And then when I'm done betting, I put all those chips back into a casino check. So now they look like my winnings at a casino. And then I walk out the door. I deposit my earnings somewhere and no one asks questions. GW: I don't know if you realized this, but part of Moyara's instructions was to “try not to lose too much money.” Maybe it's just me, but that's not something I've managed to accomplish on the few occasions I've been to a casino.

It's clear that I'm not a very good player. JL: But even if the criminals laundering Bangladesh Bank money are much better gamblers, aren't they still taking a big risk by laundering their money by

gambling

in a casino? How can they be sure that they are not going to lose large amounts? GW MUSIC: Imagine that you and I walk into a casino. Each of us has 100 dollars and we want to lose as little as possible. So we change our money into chips and go to the big spinning roulette wheel. I bet my $100 in chips that it will land on a red number.

You bet your $100 that it will land black. Black it is. I lose my $100. Boohoo. But you win $100, so now you have $200 in chips. And since we are such good friends, you give me half, we both exchange our chips for cash and we take 100 dollars each, like at the beginning. Of course, there is a small chance that the roulette ball will land on green, that is the color of the casino, and in that case we both lose. But there are only one or two green squares on the wheel, depending on where you play, so it's a pretty low probability.

Most of the time, it will land on red or black, and we can get our little system working. But this whole system only works if we make polar opposite bets from each other, right? Therefore, we will almost always come out even, but neither of us will make any real profits. That's not very satisfying for a gaming trip. JL: But remember: in the Bangladesh Bank robbery, the people who took the money to the casino were not going there to win any bets. They are playing a different game. They go there to launder the money. So for them, breaking even is absolutely fine.

And that's why the men in Robi's VIP room are so relaxed. If one of them loses, he knows that one of his accomplices will win. And vice versa. They are not worried about making money from games, because money launderers pay them to launder their chips through the system. But wait, Geoff: why do they have to bet? Why not just exchange the money into tokens, walk around for a bit, maybe have a drink, and then exchange it back for cash and leave? GW: That's a very good question. I mean, first of all, doing that with $30 million would set off a lot of alarm bells.

It's hard to go unnoticed doing that. Furthermore, to get so much money into the casino and make it look legal, money launderers had to organize what are called "junkets": private, invitation-only gaming sessions held in VIP rooms like the one Robi worked in. Now, to play in those junket rooms, they give youspecial chips, they are called room chips, and can only be bet and used in those rooms; You can't take those chips and just exchange them for a check and walk away. outside. But, when you play those chips, the chips you get back are regular casino chips, and those can be taken to the counter, exchanged for cash, and taken out of the casino.

JL: So money launderers have to follow the procedures of the game. They have to sit there, day after day, wasting money, and they probably know that at any moment, investigators could catch them hot on their heels. GW: Yes. And they have another challenge: finding the right game to play. Muhammad Cohen: Baccarat is the favorite game among Chinese players. There is no skill involved. It's all pure luck. But other people feel that this is a competition between them and destiny. And they want to see if they can triumph over destiny. GW: Muhammad Cohen is the casino expert he heard about at the beginning of the

episode

.

Baccarat began in Europe; It was actually James Bond's favorite, according to the books, and is now the biggest

gambling

game in the world. MC: Basically, Baccarat is a card game in which there are two hands. A banker's hand and a player's hand. And the other objective is to get as close as possible to nine without going overboard. Let's say you get a 3 and an 8. That's 11. You remove the front digit. So that's one. And again, all you have to do is decide whether you are going to bet on the player's hand or whether you are going to bet on the banker's hand.

Alan Katz: In this case, we have tens of millions of dollars worth of chips that are purchased with money stolen from the Central Bank of Bangladesh. Then you play at these casinos and you don't really want to win or lose. What you want to do is be at peace. And with Baccarat, you can because you can bet on both sides of the hand. JL: I'm investigative journalist Alan Katz, European Financial Investigations Editor for Bloomberg News. He investigated the casino aspect of this heist very closely. GW: He says Baccarat is the right game because it is similar to roulette: there are only two outcomes to bet on, so money launderers can balance their bets against each other.

AK: The money you win is usually casino chips. And those tokens, you can then go to the cashier counter and transfer them to cash. And if you play long enough, in this case they played for weeks, you can withdraw money from the casino. And now it's washed. GW: So these guys were literally playing baccarat for weeks. What was Bangladesh Bank doing all this time? Why couldn't they stop all this? JL: So the bank discovers the theft two days after the money went missing, and at first they assume that recovering it could be a simple process of reversing the funds.

But they are wrong. Thanks to the planning of the criminals, recovering that money is turning out to be a nightmare, and the Bangladesh government is now using its big guns to help AH: My name is Ajmalul Hussain. I am a lawyer, Queen's Counsel in England. I am a senior lawyer in Bangladesh, which is equivalent to Queen's Counsel in that jurisdiction. I am a practicing attorney in two jurisdictions. GW: If you're not sure what a Queen's Counsel is... it's basically a top-notch lawyer, usually (whispers) very expensive. Ajmalul is hired by the Bangladesh government to help track the money.

He starts having problems almost immediately. AH: He was pretty surprising. For the first few weeks, everyone completely denied the involvement of outside hackers. Including the Federal Reserve Bank of New York, the Swift... They all treated these as genuine transactions. That's why you have to convince them of it. JL: When it becomes clear that the money ended up in the Philippines, Ajmalul makes repeated trips to the country. AH: I personally went, I don't know, six or seven times. But bank officials went many more times. GW: But they also receive little attention there. AH: They were claiming that people from the Central Bank of Bangladesh were involved.

And to say, well, this was all your problem... They weren't really getting into that this was stolen money. JL: Shortly after discovering the theft, Bangladesh Bank sent stop orders to RCBC, the Philippine bank, telling them to hold the funds. But it took time for RCBC to process those requests, and by the time they did, the money was already out the door and transferred to the casinos. GW: So, of course, the Bangladeshis took the money to the casinos. They got a little lucky: they managed to recover $16 million from a guy named Kim Wong. He was one of the men who organized the private gaming sessions, the junkets, at the Midas casino, and also helped bank director Maia Deguito open RCBC accounts.

It's a bit like a game of pass the parcel: when the music stopped, Kim Wong kept some of the money, so he gave it back to her. He was initially charged in the Philippines, but the charges were later dropped. But as for the rest of the money, Bangladesh Bank hit a stone wall because, as Moyara explains: Moyara Ruehsen: The Philippines, at that time, did not have any anti-money laundering regulations for its casinos. That's very unusual. Most casinos around the world have to follow anti-money laundering protocols because in the past, you know, decades ago, we know that organized crime used casinos to launder money.

It is a very convenient way to launder your funds. This is where the North Koreans were very smart in selecting the target countries where they were going to move the money. JL: This has all changed now: Philippine casinos ARE covered by money laundering regulations. But in 2016, a lack of regulation means that when Bangladesh Bank officials approach casinos, they are unable to help. As far as the casinos are concerned, the people who showed up with the stolen millions are genuine customers and have the right to gamble the money. GW: Solaire Casino says they had no idea they were dealing with stolen funds and are cooperating with authorities.

We also approached Midas casino for a statement but they did not respond to us. JL: It's a crazy situation. Bangladesh Bank knows where the money is. They've traced it to the casinos. You can almost see it fading onto the tables. But because of Philippine law, they can't stop him. GW: Alan Katz can't believe it either: AK: We're really surprised. This was like, who are these guys that sat in the casino for weeks, right? So I was aware of this story. Everyone was aware of this story. Bloomberg wrote about this. Reuters wrote about it, The New York Times wrote about it, you know, obviously the Philippine newspapers wrote about it and these guys just sat there and played and played and played and nobody bothered them.

GW: While the headlines are spinning around you? AK: Absolutely. And then they left. They disappeared. JL: After laundering stolen money at gaming tables, the gangs of men who robbed Manila casinos now plan to take a backseat. GW: But Alan Katz and his colleagues track them down and end up discovering a lot about the dark men who helped launder the money stolen from Bangladesh Bank. AK: His wife asked one of the police officers: where should she tell the lawyer to call to try to bail him out or follow up on the matter? And the police officer told him, oh, don't bother calling a lawyer.

Actually, it didn't end very well for them. GW: But before we get to Gao and Ding's destination (and don't worry, we will), we have to tie up one loose end. Trust me, it will be worth it. You may remember that $101 million of Bangladesh Bank's money was transferred from its New York Federal Reserve account. Now, we just told you about the 81 million dollars that arrived in the Philippines. JL: But that still leaves 20 million dollars. This is arguably a small sum, given the $951 million the hackers originally intended; almost everything was destined to be laundered through the Philippines. And yet, the hackers organized a completely separate route to a completely different country just for that 20 million dollars.

GW: And the story gets even stranger when a bank employee makes a lucky discovery. JL: A spelling mistake is about to cost hackers millions of dollars. CLIP: An 'o' was missing from the foundation. It has come as a Foundation. BACKGROUND. Foundation. That is where they received a message from Bangladesh Bank saying not to allow this person to withdraw the money. GW: And it puts Jean and me on a completely new investigation, one that would expose a completely different side of the Lazarus Group's global operation. CLIP: They never lived in North Korea but they chose North Korea as their homeland.

So my father's dream was to send his children to North Korea. JL: That's next time on The Lazarus Heist MUSIC The Lazarus Heist is an original

podcast

from the BBC World Service. I'm Geoff White and I'm Jean Lee. Our producer is Estelle Doyle. GW: Thank you so much to everyone who left ratings and reviews and talked about the show on social media. That really helps us spread the word. JL: And remember to subscribe too so you don't miss any future

episode

s. GW: Also spread the word on social media using the hashtag #LazarusHeist. JL: Thanks for listening.