Department of Justice Announces Charges of North Korean and Malaysia Nationals for Bank Fraud, Money Laundering and North Korea Sanctions Violations
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. The three were charged with conspiracy to violate North Korean Sanctions Regulations and bank fraud, and conspiracy to launder funds. The 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.
“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,” said John C. Demers, Assistant Attorney General for National Security. “These 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. The Department of Justice will continue to investigate and prosecute violations of the North Korea sanctions so that one day that country may rejoin the community of nations.”
“The defendants knowingly and willfully circumvented sanctions designed to protect the U.S. financial system from abuse by individuals working on behalf of North Korea,” said Acting U.S. Attorney Sherwin. “We will continue to disrupt their actions and hold them accountable.”
“The FBI will not stand idle while North Koreans attempt to covertly access the U.S. financial system in violation of U.S. sanctions,” said Alan E. Kohler Jr, Assistant Director of the FBI’s Counterintelligence Division. “The FBI will continue to protect the sanctity of the U.S. financial system.”
“Protecting our financial institutions from National Security focused money laundering is a top priority of our office,” said Michael F. Paul, Acting Special Agent in Charge of the FBI’s Minneapolis Division. “Our agents, financial analysts and intelligence analysts worked tirelessly on this international investigation, and their hard work paid off.”
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.
Court documents note that Ri Jong Chol was the Deputy Director of a company sanctioned by the U.S. Department of Treasury, which referred to the company as a subordinate of North Korea’s Ministry of People’s Armed Forces. 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.
FBI’s Minneapolis field office is investigating the case. The case is being handled by the National Security Division and the U.S. Attorney’s Office for the District of Columbia Assistant U.S Attorney Zia M. Faruqui and National Security Division Trial Attorneys David Recker and Alexandra Hughes are litigating the case, with assistance from Financial Intelligence Analyst Charlotte Coolidge, Paralegal Specialist Elizabeth Swienc and Legal Assistant Jessica McCormick.