Last week\'s arrest of an ex-employee of Citibank Kathmandu has revealed an elaborate electronic scam to steal money from the New York account of a Nepali bank.
Madhu Aryal, former assistant representative of Citibank in Kathmandu, is charged with taking $ 185,000 from a Rastriya Banijya Bank (RBB) account in New York, aided by another staffer. Tashi Chering Sherpa. (Aryal quit Citibank in July 1998 and to become the Standard Chartered representative in Nepal and Bhutan.)
Police arrested Aryal and Sherpa last week, and during interrogation stumbled upon another discrepancy: Aryal had drawn $500,000 from his account at Himalayan Bank and Nabil Bank and was preparing to fly to the United States on 13 August.
Both banks have asked American Express to stop payment on Aryal\'s traveller\'s cheques. Sources said Aryal had been advised at the banks to use a bank draft or credit card rather than carry the pile of TCs, but he is said to have insisted on them. Aryal told the police he had already sent the travellers cheques abroad by express mail.
Meanwhile, the police have also discovered a locker in Aryal\'s name at the Bank of Kathmandu, but the contents are being examined.
The scam remained unknown for two years because of delays in RBB to reconcile its accounts. It was only during a routine reconciliation exercise in April this year that RBB staff found out that statements from Citibank for 22 May and 19 June 1998 did not match its records,Closer scrutiny showed that unusually large sums had been paid from the RBB New York account to one Pratima Agrawal at a United Overseas Bank account in Singapore. This payment, however, was not recorded in the daily statements issued by Citibank Kathmandu.
The RBB had asked Citibank to furnish details of the suspect payments as soon as it became known. The clarification from Citibank stated that the transfer to Agrawal was made as final payment as asked by RBB\'s Supermarket branch at New Road. When the RBB re-checked its books it found discrepancies with the Citibank statement. A month later RBB wrote to the bank asking for the specific payment authorisation documents.
Citibank in Kathmandu has so far refused to make any comment, but said a team from New York is here for further investigation. It has meanwhile agreed to deposit the missing cash into RBB\'s account.
Police say the investigation will be completed in another 15 days. RBB has formed a task force to quickly reconcile all its dealings with Citibank. Until then it will not be known exactly how much money was siphoned away.