North Korean, Chinese nationals schemed to fund Pyongyang’s nuclear program, U.S. prosecutors say
The Associated Press
The U.S. Justice Department has accused a network of North Korean and Chinese citizens of secretly advancing North Korea’s nuclear weapons program by channeling at least U.S. $2.5 billion in illicit payments through hundreds of front companies.
The indictment, unsealed May 28, 2020, in U.S. federal court, is believed to be the largest criminal enforcement action ever brought against North Korea.
The 33 defendants include executives of North Korea’s state-owned Foreign Trade Bank, which in 2013 was added to a U.S. Treasury Department list of sanctioned institutions for transactions that facilitated the nuclear proliferation network. The bank also was cut off from the U.S. financial system.
The indictment says the bank officials — one of whom had served in North Korea’s primary intelligence bureau — set up branches in countries around the world, including Thailand, Russia and Kuwait. They used more than 250 front companies to process U.S. dollar payments to further North Korea’s nuclear proliferation program, federal authorities allege.
The indictment contends the defendants used various tactics to cover their tracks, including coded conversations; listing false destinations and customers on contracts and invoices; and creating new front companies after banks discovered the association with North Korea.
Banks were routinely tricked into processing transactions they wouldn’t have ordinarily done, according to U.S. prosecutors. Five defendants are Chinese citizens who operated covert branches in either China or Libya.
“Through this indictment, the United States has signified its commitment to hampering North Korea’s ability to illegally access the U.S. financial system and [to limiting] its ability to use proceeds from illicit actions to enhance its illegal WMD [weapons of mass destruction] and ballistic missile programs,” acting U.S. Attorney Michael Sherwin for the District of Columbia said in a statement.
The U.S. has frozen and seized about U.S. $63 million from the scheme since 2015, according to the indictment.
Negotiations between the U.S. and North Korea over Pyongyang’s nuclear and ballistic missile programs remain stalled. North Korea resumed missile testing in March 2020 with a series of launches that rattled its neighbors and drew condemnation from multiple nations. (Pictured: People at Seoul Railway Station in Seoul, South Korea, watch a TV report April 14, 2020, about North Korea firing missiles.)
U.S. officials say they remain eager to restart talks but have gotten no indication from the North that any resumption is imminent.
The indictment reflects ongoing concerns about sanctions violations related to North Korea. In April 2020, for instance, United Nations experts recommended blacklisting 14 vessels for violating sanctions against North Korea. In a report, they accused North Korea of increasing illegal coal exports and imports of petroleum products and of continuing with cyber attacks on financial institutions and cryptocurrency exchanges to gain illicit revenue.
