How a ghost banker managed to keep North Korea's dirty money flowing. The FBI put a $7 million reward on his head
US authorities are offering a $7 million reward for information leading to the capture of Sim Hyon Sop, a North Korean banker who US officials say plays a key role in financing Kim Jong Un's regime, writes The Wall Street Journal.
Kim Jong-un has a banker wanted by the FBI/PHOTO:AFP
A few years ago, a cryptocurrency developer in California hired a freelance programmer remotely for a technical project. The payment, worth $216,000, was made in cryptocurrency and was supposed to go to a coder in Singapore. In reality, the money ended up in a digital wallet controlled by Sim Hyon Sop, according to blockchain analytics firm TRM Labs.
US prosecutors allege that Sim is involved in money laundering and evading international sanctions on behalf of Pyongyang. In several indictments, authorities say the funds he managed were used to purchase communications equipment, a helicopter and raw materials for the manufacture of counterfeit cigarettes for the North Korean state.
The Federal Bureau of Investigation (FBI) has included Sim's name on its list of most wanted financial suspects, recently increasing the reward for his capture.
A global network despite sanctions
US officials say Sim is currently living in China, where he could not be reached. He is believed to be one of dozens of North Korean bankers operating outside the country to keep the regime's financial flow running despite international sanctions aimed at completely isolating North Korea.
According to the Financial Action Task Force (FATF), Pyongyang's connection to the global financial system has not diminished, but has become more sophisticated. Every year, thousands of undercover North Korean IT workers and hackers generate hundreds of millions of dollars through cyber theft and illegal activities, US authorities say.
But this money must be laundered and spent without leaving any traces that lead back to North Korea. This is where people like Sim come in, who, according to investigators, had access to emails and detailed records of his transactions.
Money that went through American banks
US authorities claim that a significant portion of the funds managed by Sim transited the US financial system. In one case, several US banks allegedly unknowingly processed more than 300 transactions totaling about $74 million for entities linked to Pyongyang.
The financial institutions mentioned declined to comment.
Prosecutors say such funds are used to finance weapons programs, including weapons of mass destruction.
Who is Sim Hyon Sop
Few public details are known about Sim. According to the US Department of Justice, he is 42 years old and studied at an elite university in Pyongyang, where he allegedly studied foreign languages.
A former North Korean diplomat who defected to South Korea says Sim was sent abroad to represent a branch of North Korea's Foreign Trade Bank, an institution under international sanctions.
In 2016, Sim settled in the United Arab Emirates, where he allegedly coordinated financial activities for North Korean IT workers and hacker networks. Emirati authorities say they have canceled his visa under UN sanctions, but his departure has been delayed by pandemic restrictions.
Cryptocurrencies, shell companies and counterfeit cigarettes
Investigators describe a complex mechanism: illegal proceeds are transferred in the form of cryptocurrencies, fragmented through several digital wallets and later converted into cash through intermediaries in various countries. The funds then end up in the accounts of shell companies, from where they can be used for sensitive purchases.
Among them is the financing of the production of counterfeit cigarettes, an important source of income for Pyongyang. Prosecutors allege Sim coordinated the purchase of tobacco through front companies in China and the Middle East, with payments processed through Western banks.
Connections beyond North Korea
According to recent analysis, digital wallets controlled by Sim allegedly transferred funds to entities associated with Iran's Revolutionary Guards, raising questions about possible financial or commercial exchanges between sanctioned states.
Although the United States has issued several indictments against him, the lack of an extradition treaty with China makes catching Sim extremely difficult. Cryptocurrency researchers say its activity continues.
The FBI hopes that increasing the reward to $7 million will eventually lead to the location and arrest of one of the North Korean regime's most important financial intermediaries.
