WSJ: Sun Sidong under FBI investigation

Previously, I’ve written about the C4ADS investigation that exposed the Sun Sidong network, and that network’s role in money laundering and arms smuggling for North Korea, most notably the seizure of the Jie Shun arms shipment in Egypt. Shortly after the release of C4ADS’s report, Treasury froze the assets of one of Sun’s companies, Dandong Zhicheng Metallic Materials, and the Justice Department filed a civil forfeiture suit against $4 million of its assets. Now, the Wall Street Journal reports that Sun is under FBI investigation:

The FBI has been looking into Mr. Sun’s U.S. connections to potentially illegal transactions with North Korea, according to one person familiar with the investigation. Another person said the FBI has inquired about a personal U.S. real estate deal involving Mr. Sun, and a third person said Mr. Sun was on the FBI’s radar. Neither Mr. Sun nor his businesses are officially sanctioned by the U.S. [WSJ]

That last statement isn’t entirely true.

One of Mr. Sun’s companies and a company owned by his sister, Sun Sihong, have each been listed as owners of a cargo ship, the Jie Shun, that the United Nations said was seized off Egypt’s coast last year and found to be hiding 30,000 rocket-propelled grenades under piles of iron ore.

At the time of the seizure, the ship was owned by Ms. Sun’s Hong Kong-based company, Vast Win Shipping, and it had been previously owned by Mr. Sun’s Hong Kong-based company, Jie Shun Shipping Co., according to the Equasis shipping database and Hong Kong corporate records. Ms. Sun declined to comment. [WSJ]

In related news, Vietnam recently expelled the local Vast Win representative, describing it as a subsidiary of North Korean shipper Ocean Maritime Management, which was designated by the UN and the US over a 2013 arms shipment, also in violation of the UN embargo. Vietnam also denied visas to 20 North Korean “IT workers.”

Anyway, so much for the theory (or guess) advanced by “experts” that North Korea’s Chinese enablers were shadowy, isolated, inscrutable, and sanctions-proof.

Mr. Sun has had assets in the U.S. as well—he sold a four-bedroom house in Great Neck, N.Y., in August for $1.1. million, according to real-estate records and people involved in the transaction.

By C4ADS’s reckoning, Sun’s network may have been Pyongyang’s since most important portal into the Chinese (and thus, the global) economy. I don’t expect most of these enablers to have physical assets in the U.S. like Sun had, but I do expect all of the major ones to require access to the dollar system.

Mr. Sun is linked in Chinese corporate records to several other firms registered in Hong Kong and mainland China. He also is listed in U.S. public records as the chief executive of Dongyuan Enterprise, a Flushing, N.Y.-based firm. That company successfully applied for a U.S. work visa last year for another Chinese national, its director, according to Labor Department records. Dongyuan Enterprise didn’t respond to repeated requests for comment.

Dongyuan Enterprise shipped 42,000 pounds of apples from South Korea to the U.S. in January, according to Descartes Datamyne, an international trade-data provider. It also shipped $35,000 worth of “used furniture” from one of Mr. Sun’s Chinese firms to the U.S., in March.

Mr. Sun’s U.S. business might allow him to do transactions around the world without any obvious ties to his China-based, North Korea-focused dealings, said C4ADS’s research chief, David Lynch. It could also provide him with the ability to register for business services within the U.S., including bank accounts to transfer funds internationally and overseas trade, Mr. Lynch said. [WSJ]

I don’t know anything more about this investigation against Sun than you do, but the conduct described here suggests an investigation for money laundering and violations of the International Emergency Economic Powers Act. I suppose we’ll also see a forfeiture action of some kind, listing the real property or proceeds of the sale as “proceeds” of criminal activity. If Sun Sidong runs back to China and the authorities there won’t extradite him, that may be the only way to impose any meaningful accountability on him.

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