WASHINGTON (CN) — The United States announced a $3.1 million federal forfeiture action Tuesday against two Chinese companies that it accuses of having laundered money on behalf of sanctioned North Korean banks.
The complaint, which was filed on Nov. 26 in Washington, takes aim at Apex Choice and Yuanye Wood, described as front companies that purported, in the case of the former, to export paraffin wax and, in the case of the latter, to sell lumber.
A third company based in Singapore whose name is shielded in the complaint opted not to contest the forfeiture.
“The front companies that launder funds on behalf of sanctioned North Korean banks are supporting sanctioned North Korean end users, including North Korean military and North Korean weapons programs,” the complaint states.
In addition to the International Emergency Economic Powers Act and the prohibitions of the North Korea Sanctions and Policy Enhancement Act of 2016, the defendants are accused of violating laws pertaining to conspiracy and money laundering.
Only the Singapore-based defendant has admitted that it took orders from an unauthorized Chinese money remitter and sent payments to North Korean companies in exchange for discounted currency exchange rates.
Apex Choice has responded to accusations that it made payments to North Korean front companies by claiming that the front companies, which have no known relations to the wax industry, are wax companies in China. The complaint says Yuanye Wood bought lumber produced by a North Korean wood company that operates using forced labor camps and paid known North Korean financial facilitators for the products.
“As North Korea continues to find creative ways to circumvent international sanctions, we hope this investigation will compel foreign companies to do their due diligence when it comes to conducting business transactions and/or making third party payments using U.S. dollars,” FBI Special Agent in Charge Michael DeLeonin said a statement. “Companies engaging in deceptive banking practices may face criminal or civil action, and could be forced to forfeit funds.”
Contact information was not immediately available online for Yuanye Wood or Apex Choice.
U.S. Attorney Jessie Liu said in a press release that the companies U.S. sanctions, and that the DOJ “will seek significant remedies to address companies that violate U.S. national security, regardless of where they are doing business.”