U.S. court seizes $2.4M in North Korea caseA U.S. district court on Thursday ordered the seizure of $2.4 million in funds from companies involved in money laundering for North Korea in violation of U.S. and international sanctions.
The court’s ruling follows a probe by the Federal Bureau of Investigation (FBI) into a series of wire transfers by four companies acting on behalf of North Korea’s Foreign Trade Bank in violation of the International Emergency Economic Powers Act (Ieepa).
The state-run bank is subject to both U.S. and United Nations Security Council sanctions.
Judge Rudolph Contreras of the U.S. District Court of the District of Columbia granted the U.S. government’s request for a default judgement allowing it to confiscate the funds, as the companies failed to respond to official complaints about their activities.
In its court filing, the U.S. government alleged that the North Korean bank laundered over $2.5 billion via such front companies through the U.S. financial system. The $2.4 million funds seized by U.S. authorities in Thursday’s ruling are just the transfers detected and intercepted by U.S. law enforcement.
The four companies – whose names were withheld and identified in court documents as only Company 1, 2, 3 and 4 – have not yet been sanctioned by the United States, but their funds were seized after their transactions with known North Korean front companies operating abroad came to light.
$1.8 million of the funds seized came from Company 1, which according to the U.S. government complaint not only made several wire transfers to the Foreign Trade Bank’s front companies based in Russia, Thailand and Kuwait, but also received transfers from other known North Korean front companies.
The U.S. government said that Company 2, which was incorporated in Singapore just two months after Company 1’s funds were seized by U.S. authorities, was a new front company established by North Korean agents to continue money laundering on behalf of the regime.
Citing a “confidential reliable source,” the U.S. government also argued that both Company 1 and 2 follow orders from the North’s Reconnaissance General Bureau (RGB), which conducts the regime’s cyber warfare and other clandestine operations.
According to the U.S. government, Company 3 and 4 were also involved in a series of wire transfers with organizations closely linked with the regime, including the Chi Yupeng network, which encompasses a number of North Korean front companies.
One company in the Chi Yupeng network, Dandong Zhicheng Metallic Materials Co. Ltd., used foreign currency raised by sales of North Korean coal to purchase nuclear and missile components for Pyongyang.
BY MICHAEL LEE [email@example.com]