DOJ Opens Forfeiture Suit on Funds Meant for North Korea in Crypto Laundering Scheme
DOJ announced last week that it opened a civil forfeiture action in the U.S. District Court for the District of Columbia against more than $7.74 million allegedly laundered on behalf of the North Korean government. The funds were initially "restrained" as part of an indictment against North Korean banker Sim Hyon Sop, who was allegedly conspiring with North Korean information technology workers who illegally "amassed millions in cryptocurrency" as a means of evading sanctions on North Korea, DOJ said.
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The complaint said the North Korean government uses "illegally obtained cryptocurrency as a means of generating revenue," sourcing this cryptocurrency in part from "remote work done by North Korean IT workers deployed around the globe," including in China and Russia. To obtain employment at various companies, including blockchain development firms, the IT workers allegedly "bypassed security and due diligence checks using fraudulent (or fraudulently obtained) identification documents and other obfuscation strategies."
To send their ill-gotten gains to North Korea, the IT workers allegedly used various money laundering techniques, including establishing accounts with false identities, converting funds to other forms of cryptocurrency and using U.S.-based accounts to "legitimize activity."
After laundering the funds, the IT workers allegedly sent them to the North Korean government. In some cases, the funds went through Sim and Kim Sang Man, CEO of sanctioned defense company Chinyong, DOJ said. Previously, DOJ indicted Sim for his role in the crypto laundering scheme (see 2304250027).