Company Pleads Guilty to Money Laundering Violation as Part of Scheme to Circumvent North Korean Sanctions and Deceive Banks, Agrees to Pay Forfeiture and Fine
Yang Ban Corporation, a company established in the British Virgin Islands in 2014 that operated in South East Asia pleaded guilty today to conspiring to launder monetary instruments in connection with evading sanctions on North Korea and deceiving correspondent banks into processing U.S. dollar transactions. The company will pay a financial penalty totaling $673,714.04.
In pleading guilty, Yang Ban admitted and accepted responsibility for its criminal conduct. Yang Ban also agreed to implement rigorous internal controls and to cooperate fully with the Justice Department, including by reporting any criminal conduct by an employee.
“Evasion of U.S. sanctions laws allows North Korea to continue its dangerous and persistent proliferation activities and to develop weapons of mass destruction,” said John C. Demers, Assistant Attorney General for National Security. “This defendant utilized dual invoicing practices and provided false statements to conceal the ultimate destination of commodities it purchased for North Korea, duping U.S. correspondent banks into processing U.S. dollar transactions that they would not otherwise have authorized. The disruption of this activity demonstrates that the Justice Department will leverage its significant investigative assets to uncover and punish North Korean efforts to engage in fraud, money laundering, and sanctions violations all to bolster its oppressive regime.”
“Yang Ban undermined the integrity of our financial system and harmed our national security by circumventing banks’ sanction and anti-money laundering filters as part of a scheme to launder funds for North Korean customers,” said Acting U.S. Attorney Sherwin for the District of Columbia. “Today’s action demonstrates this office’s commitment to find and punish companies, no matter where they are located, whose actions illegally facilitate North Korean sanctions evasion.”
“Once again, the Department of Justice has disrupted an effort by North Korea to covertly access the U.S. financial system in violation of U.S. sanctions,” said Alan E. Kohler Jr, Assistant Director of the FBI's Counterintelligence Division. “The FBI will aggressively investigate companies established for the sole purpose of evading U.S. sanctions on North Korea. The sanctity of the U.S. financial system will not be compromised.”
“Companies making deliberate efforts to launder money through the United States will be shut down,” said Michael F. Paul, Acting Special Agent in Charge of the FBI’s Minneapolis Division. “I commend the hard work of the agents and analysts who investigated this case.”
“Homeland Security Investigations (HSI) is committed to working with our law enforcement partners to protect the integrity of the U.S. financial system, leveraging investigative assets in our combined efforts to expose the North Korean regime’s attempt to evade U.S. sanctions,” said Raymond Villanueva, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) HSI Washington, D.C.
U.S. sanctions and banking regulations prevented correspondent banks in the United States from processing wire transfers on behalf of customers located in North Korea. According to admissions and court documents, beginning in at least February 2017 and continuing until at least May 2018, Yang Ban deceived banks in the U.S. into processing transactions for North Korean customers of Yang Ban. Yang Ban and its co-conspirators utilized financial cutouts and front companies to conceal the North Korean nexus. Yang Ban specifically admitted to conspiring with other, including SINSMS, a subsequently designated company, to falsify shipping records. For example, in May 2017, a North Korean co-conspirator notified Yang Ban and its co-conspirators of a company which would ship to Nampo, North Korea, but would require two separate sets of shipping documents. One set of documents would be free of any indication that the shipment was going to North Korea, and a second set of documents would contain the North Korea details for internal record keeping.
Yang Ban admitted that it was aware that it needed to distance itself from North Korean front companies in order to protect it from additional scrutiny from banks that process U.S. dollar transactions. For example, in September 2016, Yang Ban caused an employee to inform a North Korean customer that Yang Ban was unable to use a related company for further business with North Korea due to bank restrictions on such transactions
The investigation was conducted by the FBI’s Minneapolis Field Office with support from HSI’s Washington D.C. Office. Assistant U.S. Attorney Zia M. Faruqui and Trial Attorney David Recker of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case with assistance from Paralegal Specialist Brian Rickers, Legal Assistant Jessica McCormick, and Records Examiner Angela De Falco.