A company operating out of Southeast Asia has admitted its role in a conspiracy to launder money and evade sanctions imposed on North Korea, highlighting the ongoing efforts to access international financial systems despite restrictions. Yang Ban Corporation, established in the British Virgin Islands, pleaded guilty in a U.S. court to using deceptive practices to process U.S. dollar transactions for North Korean entities, agreeing to pay a significant financial penalty of $673,714.04.
The admission of guilt underscores the lengths to which some entities will go to circumvent international sanctions designed to curb North Korea’s access to funds, which are often channeled into its controversial weapons programs. Yang Ban confessed to intentionally misleading correspondent banks in the United States, effectively enabling North Korean clients to move money through the U.S. financial system – a system they are restricted from directly accessing due to sanctions.
According to Assistant Attorney General for National Security John C. Demers, the evasion of these sanctions directly fuels North Korea’s dangerous proliferation activities. He stated, “Evasion of U.S. sanctions laws allows North Korea to continue its dangerous and persistent proliferation activities and to develop weapons of mass destruction.” Demers emphasized the Justice Department’s commitment to disrupting and punishing such schemes, ensuring that North Korea cannot utilize fraudulent means and money laundering to support its regime.
Acting U.S. Attorney Sherwin for the District of Columbia echoed this sentiment, stating that Yang Ban’s actions undermined the integrity of the financial system and posed a threat to national security. The company deliberately bypassed bank security measures designed to prevent money laundering and enforce sanctions, all to facilitate financial transactions for North Korean customers. This case, as Sherwin highlighted, serves as a clear message that geographical location will not shield companies engaged in illegal activities that benefit North Korea.
Alan E. Kohler Jr, Assistant Director of the FBI’s Counterintelligence Division, further emphasized the FBI’s proactive stance against companies created solely to bypass North Korea sanctions. He affirmed the commitment to protecting the U.S. financial system’s sanctity and aggressively investigating entities attempting to compromise it. The collaborative effort across different law enforcement agencies demonstrates a united front against illicit North Korean financial activities.
Michael F. Paul, Acting Special Agent in Charge of the FBI’s Minneapolis Division, reinforced this message, stating unequivocally that companies attempting to launder money through the U.S. will face serious consequences and be shut down. The success of this investigation is attributed to the dedicated work of agents and analysts who meticulously uncovered the scheme.
Raymond Villanueva, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) HSI Washington, D.C., added that Homeland Security Investigations is dedicated to safeguarding the U.S. financial system. This case exemplifies the effective partnership between law enforcement agencies in exposing and dismantling North Korea’s attempts to evade U.S. sanctions.
The court documents reveal that Yang Ban’s illicit activities occurred between February 2017 and May 2018. The company and its co-conspirators employed sophisticated methods, including financial cutouts and front companies, to obscure the North Korean connection of the transactions. A key tactic was the falsification of shipping records. For instance, in one instance in May 2017, a North Korean accomplice instructed Yang Ban to use dual sets of shipping documents. One set would omit any mention of North Korea as the destination, while the second, containing the true details of shipment to Nampo, North Korea, was kept for internal records. This dual invoicing practice was a deliberate attempt to deceive banks processing the transactions.
Furthermore, evidence showed Yang Ban was acutely aware of the need to distance itself from North Korean front companies to avoid raising red flags with banks. As early as September 2016, Yang Ban instructed an employee to inform a North Korean customer about their inability to use a specific related company for further North Korea-related business due to increasing bank scrutiny. This internal communication reveals a calculated effort to navigate and circumvent banking restrictions specifically targeting North Korea Money flows.
The investigation, spearheaded by the FBI’s Minneapolis Field Office with support from HSI’s Washington D.C. Office, highlights the complexities of tracking and disrupting illicit financial networks. The prosecution team, comprised of Assistant U.S. Attorney Zia M. Faruqui and Trial Attorney David Recker, along with support staff, successfully brought this case to a guilty plea, demonstrating the ongoing commitment to enforcing sanctions and preventing North Korea from accessing international financial resources. This case serves as a stark reminder of the persistent efforts by North Korea to obtain funds for its regime and the equally persistent efforts of U.S. law enforcement to counteract these activities.
