DOJ Seeks $11 Million from Firms Accused of Aiding North Korea

WASHINGTON (CN) – The U.S. attorney's office on Tuesday filed two forfeiture complaints seeking almost $11 million from companies accused of laundering U.S. dollars to benefit North Korea, in violation of sanctions tied to the country's missile programs.

The complaints alleged Singapore-based Velmur Management and China-based Dandong Chengtai Trading Co., engaged in financial transactions that violated federal money laundering statutes, the North Korean Sanctions and Policy Enhancement Act of 2016 and the International Emergency Economic Powers Act.

"North Korea has used sanctioned state-run banks to work with a host of front companies in order to access the U.S. financial system and evade the U.S. sanctions imposed on these banks and their sanctioned affiliates," the 33-page complaint against Velmur states.

According to the complaint, Velmur laundered money for sanctioned North Korean banks working to procure products from sanctioned Russian petroleum products supplier JSC Independent Petroleum Company.

The banks allegedly used four front companies - including Transatlantic Partners, which is also named as a defendant in the complaint - to make payments to Velmur, which then wired funds to JSC.

The U.S. government is seeking more than $6.9 million for the alleged illicit wire transfers made to Velmur, which it says were routed through U.S. correspondent bank accounts.

The complaints were filed the same day that the Treasury Department announced new sanctions against Chinese and Russian entities, including 10 third-country companies and six individuals that the agency said support North Korea's advancement of its nuclear and ballistic missile programs.

According to a Department of Justice news release, North Korean banks have adapted and learned how to evade sanctions to access the international banking system.

"This includes maintaining correspondent bank accounts and representative offices abroad which are staffed by foreign nationals making use of front companies," the release said. "These broad interwoven networks allow the North Korean banks to conduct illicit procurement and banking activity."

According to the complaint, North Korea funds its weapons of mass destruction and missile programs with coal, which generates more than $1 billion per year in revenue.

The second complaint takes aim at Dandong Chengtai, one of China's largest importers of North Korean coal.

According to the FBI, Dandong laundered money through the U.S. on behalf of sanctioned entities -- in particular the North Korean Workers' Party -- that conspired with Dandong and other front companies controlled by Chinese national Chi Yupeng to evade U.S. sanctions and access the U.S. financial system.

"We assess that these deceptive practices have allowed millions of U.S. dollars of North Korean illicit activity to flow through U.S. correspondent accounts," the 31-page complaint states.

The U.S. is seeking more than $4 million that Dandong wired to front company Maison Trading, which is also named as a defendant in the complaint, through U.S. correspondent bank accounts.

According to the Justice Department, financial records show that purchases were destined for North Korea that are well outside the scope of a mineral trading company, including "bulk commodities such as sugar, rubber, petroleum products, and soybean oil, among others."

U.S. Attorney Channing Phillips cheered the forfeiture complaints Tuesday afternoon.

“These complaints show our determination to stop North Korean sanctioned banks and their foreign financial facilitators from aiding North Korea in illegally accessing the United States financial system to obtain goods and services in the global market place,” Phillips said in a statement.

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