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Catch of the Week: DOJ Charges North Korean and Malaysian Nationals for Bank Fraud, Money Laundering and Sanctions Violations

Posted  September 11, 2020

The Department of Justice announced a criminal complaint charging Ri Jong Chol, Ri Yu Gyong, North Korean nationals, and Gan Chee Lim, a Malaysia national, for conspiracy to violate North Korean Sanctions Regulations, bank fraud, and conspiracy to launder funds.  The DOJ said defendants allegedly established and utilized front companies that transmitted U.S. dollar wires through the United States to purchase commodities on behalf of North Korean customers.

U.S. sanctions and banking regulations prevented correspondent banks in the United States from processing wire transfers on behalf of customers located in North Korea.  According to court documents, beginning in at least August 2015 and continuing until at least August 2016, the defendants deceived banks in the U.S. into processing transactions for North Korean customers.  The defendants and their co-conspirators utilized financial cutouts and front companies to conceal the North Korean nexus.

According to court documents, the defendants discussed new sanctions on North Korea, and referenced several news articles detailing those sanctions published by U.S. and U.K. news organizations.  They utilized shipping companies previously linked to the attempted sales of luxury goods to North Korea, and failed to seek the required licenses from the U.S. Government.

John C. Demers, Assistant Attorney General for National Security said “violations of U.S. sanctions on North Korea enrich the regime and allow it to continue to fund the destabilizing activities that the sanctions are meant to prevent.” Demers continued by saying “defendants allegedly violated U.S. sanctions by lying to international financial institutions in order to dupe them into processing transactions in U.S. dollars which they would not otherwise have cleared.”

Alan E. Kohler Jr, Assistant Director of the FBI’s Counterintelligence Division added, “the FBI will not stand idle while North Koreans attempt to covertly access the U.S. financial system in violation of U.S. sanctions.” Michael F. Paul, Acting Special Agent in Charge of the FBI’s Minneapolis Division, stated “protecting our financial institutions from National Security focused money laundering is a top priority of our office…our agents, financial analysts and intelligence analysts worked tirelessly on this international investigation, and their hard work paid off.”

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Tagged in: Catch of the Week, Foreign Exchange, Money Laundering, Regulatory Violations,