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Category: U.S. Law

April 30, 2023

British American Tobacco, North Korea, & the Bomb: Setting a New Low for How Evil a Tobacco Company Can Be

Last Tuesday, British American Tobacco, the world’s second-largest tobacco company, along with its Singaporean subsidiary, pled guilty to bank fraud and conspiracy charges and agreed to pay a combined $635 million in criminal and civil fines, penalties, and forfeitures to the Treasury and Justice Departments. The charges arise from an secret joint venture, going all the way back to 2001, in which BAT sold the North Korean government tobacco, other materials, machinery, and technical help to manufacture cigarettes, despite having said...

Categories Money Laundering/NK Crime/U.S. Law
April 4, 2023

The Root of All Evil: Money, Rice, Crime & Law in North Korea

In 1997, a Washington Post reporter was allowed into the city of Hamheung, in the mountains that ring North Korea’s east coast, to investigate reports of a famine in the isolated country. There, he interviewed the director of a local orphanage, who told him that some parents who could no longer feed their children had begun to abandon them “to nature.” Some of these children died where their parents left them. In other cases, people would bring them to the...

Categories Human Rights/Sanctions/U.S. Law
July 19, 2022

The U.S. & South Korea should enforce existing sanctions against North Korea, not bargain for new ones

Between 2017 and 2022, the leaders of the United States and South Korea performed an experiment: what if they froze joint military exercises, said nothing about Kim Jong-un’s crimes against humanity, offered aid, and stopped actively enforcing sanctions? The results of the experiment are in. This week, Treasury Secretary Yellen is in Seoul, where she met with President Yoon to discuss, among other items, what each of the two government should do about Kim Jong-un’s increased missile tests, and the...

Categories An Alliance?/Money Laundering/Sanctions/U.S. Law
October 3, 2021

Selling Slavery: South Korean investors’ $900,000 Kaesong lobbying campaign

Documents filed with the Justice Department in July show that a group of South Korean investors hired a San Francisco law firm and a South Korean consulting firm to lobby the U.S. government to support reopening a shuttered, looted, and partially exploded manufacturing complex near Kaesong, North Korea. The documents were required to be filed with the Justice Department and made public under the Foreign Agents Registration Act of 1938 (FARA), a law designed to expose foreign propaganda and influence...

Categories Kaesong/U.S. & Korea/U.S. Law
March 23, 2021

For the first time, the Justice Department extradites a North Korean to stand trial in the U.S.

Today, the Justice Department announced that for the first time, it has extradited a North Korean national to the United States. Mun Chol Myong, who was based in Malaysia, and whom DOJ claims to be an agent of the Reconnaissance General Bureau, allegedly laundered money through the United States to do deals between the Foreign Trade Bank of North Korea (designated in 2013 for WMD proliferation financing), the military electronics manufacturer, Glocom, and other wholesome types. Funny, no mention of...

Categories Luxury Goods/Money Laundering/Southeast Asia/U.S. Law
July 17, 2020

Why DOJ’s deferred prosecution of Essentra FZE is a good deal for it, & for us.

In the Washington suburbs, $665,112 will buy you a nice house, but not a mansion. A settlement with the Treasury Department for a civil penalty in that amount isn’t going to bankrupt a large multinational corporation. Its main impact on Essentra FZE, a UAE-based subsidiary of a British corporation that makes cigarette filters, may be in its access to financial services and legal fees, which would still be worth every penny if they exceeded the penalty. You could argue back...

Categories Money Laundering/U.S. Law
May 28, 2020

Feds unseal 14-count indictment against 33 agents of sanctioned North Korean bank

The U.S. Attorney’s office for the District of Columbia has done it again. Today, its prosecutors unsealed indictments against 28 North Korean and 5 Chinese representatives of North Korea’s Foreign Trade Bank (FTB) who are or were posted in China, Russia, Libya, Thailand, Kuwait, and Austria. The Treasury Department’s Office of Foreign Asset Control (OFAC) designated the FTB for proliferation financing in 2013. The North Korea Sanctions Regulations later put additional restrictions on dealings with the North Korean financial industry....

Categories Money Laundering/Sanctions/U.S. Law
April 14, 2020

On OFAC’s new North Korea Sanctions regulations

In the days since the Treasury Department announced its amendment to the North Korea sanctions regulations at 31 CFR Part 510, I’ve received at least half a dozen inquiries from journalists about what it means. Unfortunately for us all, today also marks the first day in almost three weeks, inclusive of weekends and holidays, that I did not work a significant amount overtime in my day job—currently, it involves responding to the nationwide coronavirus disaster declaration—so I’ll keep this post...

Categories Arms Trafficking/Money Laundering/Sanctions/Shipping sanctions/U.S. Law
March 2, 2020

DOJ indicts 2 Chinese men for laundering stolen South Korean Bitcoin for North Korean hackers

Today, the U.S. Attorney’s Office for the District of Columbia unsealed an indictment of two Chinese nationals, Tian Yinyin and Li Jiadong, charging them with money laundering and running an unlicensed money transmitting business, for laundering $100 million in stolen Bitcoin and Ether for North Korean hackers between July 2018 and April 2019. The indictment alleges that the $100 million was part of a $250 million take the Lazarus Group stole from four cryptocurrency exchanges, three of them in South...

Categories Cyberwar/Money Laundering/U.S. Law
February 14, 2020

Huawei & North Korea: Reading between the lines of EDNY’s new indictment

HUAWEI, WHICH WAS PREVIOUSLY INDICTED FOR eleven counts of conspiracy, bank fraud, wire fraud, violations of Iran sanctions, and money laundering (plus criminal forfeiture counts) now finds itself hit with a superseding indictment for sixteen counts of similar allegations by prosecutors in the Eastern District of New York, or EDNY. I’ve always been impressed with the quality of EDNY’s work. It’s a plucky, underrated little office that sits resentfully in the shadow of its more prestigious and prideful neighbor in...

Categories Money Laundering/U.S. Law
December 20, 2019

The Warmbier Act could raise the pressure on Kim Jong-un dramatically, whether Donald Trump likes it or not

Kim Jong-un is wrapping Donald Trump’s Christmas present, and Putin and Xi Jinping say that Trump should lift the sanctions on Kim they’ve been violating anyway, but Congress just made those sanctions much tougher in a new bill, the Otto Warmbier North Korea Nuclear Sanctions and Enforcement Act, which just passed both houses of Congress as an amendment to the National Defense Authorization Act for Fiscal Year 2020, or NDAA. The bill is an updated version of the BRINK Act,...

Categories Money Laundering/Sanctions/Shipping sanctions/U.S. Law
May 15, 2019

Judge holds Chinese banks in contempt, fines them $50K a day for failing to comply with North Korea subpoenas

If you haven’t already read my post about Chief Judge Beryl Howell’s order directing three Chinese banks to comply with federal grand jury and statutory subpoenas of their North Korea-related records, you should probably start there. Although the docket in this case is still sealed, I speculated in that post that the banks would likely appeal to the D.C. Circuit and seek a stay of the court’s order. And so they have, according to an order Judge Howell unsealed today....

Categories Money Laundering/U.S. Law
May 10, 2019

I’ll give you a topic. The final voyage of the “Wise Honest” was neither. Discuss.

The U.S. Attorney’s Office for the Southern District of New York has seized and sued to forfeit a 17,000-ton North Korean bulk carrier that was hauling neither rice, nor corn, nor milk, but coal to enrich Kim Jong-un, and machinery to keep his mines and his military-industrial complex from shutting down.1 And it was doing it with money laundered through correspondent banks in our country, in New York City. This is the great, uncharged crime of the M/V Wise Honest,...

Categories Money Laundering/Shipping sanctions/U.S. Law
April 30, 2019

OFK Exclusive: Court orders three Chinese banks to comply with subpoenas for North Korea-related records

There is (or should be) a modern Chinese curse that goes something like this: “May the subpoenas fall like rain on your New York correspondents.” In December 2017, that curse afflicted three Chinese banks that now find themselves enmeshed in an expensive and legally perilous FBI investigation into the laundering of large amounts of Kim Jong-un’s lucre. With today’s unsealing of Chief Judge Beryl Howell’s opinion, ordering the banks to comply with the subpoenas, the story can be told. You...

Categories Money Laundering/Sanctions/U.S. Law
February 28, 2019

How to negotiate a lasting peace in Korea, feed the hungry, and heal the sick

Let’s say you still believe in a negotiated disarmament of North Korea, something to which I assign a ten percent probability at most. Or, let’s say you don’t. Suspend your disbelief and assume that aggressive sanctions enforcement—the enforcement Kim Jong-un tricked Trump into calling off nearly a year ago—becomes a sufficient threat to the solvency and cohesion of Kim Jong-un’s regime that he comes back to the table next year, offers to submit a complete declaration of his WMD programs...

Categories Class Warfare/Democracy/Diplomacy/Sanctions/U.S. Law
February 23, 2019

Hanoi Redux: the Senate, the Supremes & Pompeo (also, Trump!) on the Iran deal

SAY WHAT YOU WILL ABOUT OBAMA’S DEAL WITH IRAN; what Trump signed with Kim Jong-un in Singapore makes it look like a model of clarity and specificity. For all its flaws, the Iran deal, or Joint Comprehensive Plan of Action (JCPOA), undeniably gained us something. Its inspection terms and sunset clause were serious flaws and might have proven to be fatal ones. Even so, it got Iran to surrender a big stockpile of enriched uranium and make some useful concessions...

Categories Appeasement/Diplomacy/U.S. Law/U.S. Politics
December 3, 2018

Of course, Kim Jong-un’s tourist resorts will fail. Of course, we can help with that.

The following question is multiple choice. Please do not use a number two pencil to blacken the oval on your screen. In April, angry, hungry citizens in North Korea’s remote Ryanggang Province took the brave and desperate step of protesting to local authorities over forced “donations” of food, money, and supplies they were required to make to the construction of — (a) an orphanage (b) a grain elevator (c) a soy-based infant formula factory (d) a beach resort If you...

Categories Human Trafficking/Sanctions/Sunshine/U.S. Law
November 27, 2018

DOJ sues to forfeit $3M linked to N. Korean money laundering, proliferation financing & slave labor

This afternoon, the U.S. Attorney’s Office for the District of Columbia filed suit to forfeit just over $3 million that three defendants allegedly laundered for an interconnected network of North Korean banks and front companies, in violation of the North Korea Sanctions and Policy Enhancement Act and the International Emergency Economic Powers Act: $599,930.00 in funds “associated with” Cooperating Company 1 of Singapore, which agreed not to contest the forfeiture (and hopefully more), and which used “a bank account in...

Categories Money Laundering/Sanctions/U.S. Law