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US charges North Koreans in $2.5B sanctions-busting scheme

TOPSHOT - North Korea's leader Kim Jong Un before a meeting with US President Donald Trump on the south side of the Military Demarcation Line that divides North and South Korea, in the Joint Security Area (JSA) of Panmunjom in the Demilitarized zone (DMZ) on June 30, 2019. (Photo by Brendan Smialowski / AFP) (Photo credit should read BRENDAN SMIALOWSKI/AFP via Getty Images)

WASHINGTON — The Justice Department has accused a network of North Korean and Chinese citizens of secretly advancing North Korea’s nuclear weapons program by channeling at least $2.5 billion in illicit payments through hundreds of front companies.

The indictment, unsealed on Thursday, is believed to be the largest criminal enforcement action ever brought against North Korea.

The 33 defendants include executives of North Korea’s state-owned Foreign Trade Bank, which in 2013 was added to a Treasury Department list of sanctioned institutions and cut off from the U.S. financial system.

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 U.S. dollar payments to further the country’s nuclear proliferation program.

Five of the defendants are Chinese citizens who operated covert branches in either China or Libya.

“Through this indictment, the United States has signified its commitment to hampering North Korea’s ability to illegally access the U.S. financial system and limit its ability to use proceeds from illicit actions to enhance its illegal WMD and ballistic missile programs,” acting U.S. Attorney Michael Sherwin said in a statement.

The case was filed at a time of delicate relations between the U.S. and North Korea. 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.

Apart from recent speculation over North Korean leader Kim Jong Un’s health, which prompted public expressions of concern from President Trump, the administration has been almost completely silent on North Korea. U.S. officials say they remain eager to restart negotiations but have gotten no indication from the North that any resumption is imminent.

The new indictment underscores ongoing concerns about sanctions violations by North Korea. Last month, United Nations experts recommended blacklisting 14 vessels for violating sanctions against North Korea, accusing the country in a report of increasing illegal coal exports and imports of petroleum products and continuing with cyber attacks on financial institutions and cryptocurrency exchanges to gain illicit revenue.

The U.S. has seized about $63 million from the scheme since 2015, according to the indictment.

It was not immediately clear whether any of the defendants had lawyers.

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