Federal authorities on Thursday said they seized $7.74 million from North Korean nationals as they attempted to launder cryptocurrency obtained by IT workers who gained illegal employment and funneled the wages to the North Korean regime.
The allegedly illegally obtained funds were linked to Sim Hyon Sop, a representative of North Korean Foreign Trade Bank, and Kim Sang Man, CEO of Chinyong, an outfit associated with North Korea’s Ministry of Defense, the Justice Department said. Both North Korean nationals were added to the Treasury Department’s Office of Foreign Assets Control’s list of sanctioned individuals in 2023.
The cryptocurrency seizure marks another action in a series of long-running law enforcement efforts to identify and prevent North Korean operatives from gaining employment at companies, evading U.S. sanctions, and sending payroll back to the North Korean government.
The North Korean technical worker scheme is widespread and growing, as North Korean nationals have infiltrated the employee ranks at top global companies, including the majority of the Fortune 500, according to Mandiant. The FBI, State and Treasury Departments first issued an advisory and guidance about the threat posed by North Korean IT workers in May 2022. The scope and scale of the scheme has grown considerably since then, generating substantial revenue for North Korea’s regime.
“The FBI’s investigation has revealed a massive campaign by North Korean IT workers to defraud U.S. businesses by obtaining employment using the stolen identities of American citizens,” Roman Rozhavsky, assistant director of the FBI’s Counterintelligence Division, said in a statement.
Federal prosecutors previously charged Sim for allegedly conspiring with North Korean technical workers to gain remote employment at companies based in the United States and elsewhere, and conspiring with cryptocurrency traders to launder ill-gotten proceeds from those employers.
The Justice Department on Thursday accused Kim of acting as an intermediary between the North Korean IT workers and North Korean Foreign Trade Bank to facilitate the transfer of funds to Sim. Chinyong, the organization Kim runs, employs groups of North Korean IT workers operating in Russia, Laos and other countries, officials said.
“For years, North Korea has exploited global remote IT contracting and cryptocurrency ecosystems to evade U.S. sanctions and bankroll its weapons programs,” Sue J. Bai, head of the Justice Department’s National Security Division, said in a statement.
“Today’s multimillion-dollar forfeiture action reflects the Department’s strategic focus on disrupting these illicit revenue schemes,” Bai added. “We will continue to use every legal tool available to cut off the financial lifelines that sustain the DPRK and its destabilizing agenda.”
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