Justice Department says $2.5B funneled into North Korea's nuclear program

Cheryl Sanders
May 29, 2020

In a federal indictment unsealed for the first time Thursday, the Department of Justice alleged that North Korea's state-owned bank and dozens of individuals engaged in a multi-year worldwide money laundering scheme that facilitated more than $2.5 billion in illegal payments for the nation's nuclear weapons and missile program.

According to the indictment, which was filed in February but unsealed on Thursday, the group of Chinese and Koreans named "did knowingly combine, conspire, confederate and agree with others" to defraud the USA government by obstructing its enforcement of multiple economic sanctions against the Democratic People's Republic of Korea (DPRK) and "to obtain moneys and funds owned and under the custody and control of, a financial institution, by means of false and fraudulent pretenses, representations, and promises, that is by concealing from United States financial institutions that they were engaged in financial transactions with a North Korean financial institution".

According to the indictment, 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, and used more than 250 front companies to process US dollar payments to further the country's nuclear proliferation program.

To evade the sanctions, more than 250 front companies were also created to process illegal payments.

"Through this indictment, the United States has signified its commitment to hampering North Korea's ability to illegally access the USA financial system, and to limiting its ability to use proceeds from these illicit actions to enhance its illegal weapons of mass destruction", said Michael Sherwin, the acting U.S. attorney for Washington, in a statement.

The indictment also revealed that China has been knowingly assisting the North Korean government in evading US sanctions, according to Joshua Stanton, an attorney and expert in USA sanctions policy who assisted in writing the 2016 law strengthening penalties against North Korea. Banks were routinely tricked into processing transactions they wouldn't have ordinarily done, according to prosecutors.

"The defendants and other co-conspirators concealed (Foreign Trade Bank) involvement in U.S. dollar payments from Correspondent Banks in order to trick the banks into processing payments that the banks otherwise would not have done", the indictment says.

The US has frozen and seized about $63 million from the scheme since 2015, according to the indictment.

The case has been under seal since February and none of the officials charged in the indictment are now in US custody. The rapprochement that President Donald Trump has tried to engineer over the past two years has stalled badly, with the last face-to-face meeting between senior officials from the two countries taking place in October in Stockholm.

A new facility in North Korea can accommodate intercontinental ballistic missiles, according to the CSIS; Greg Palkot reports.

The Washington Post said it was the largest North Korean sanctions violation case ever.

Other reports by iNewsToday