U.S. targets attempts to evade North Korea sanctions

WASHINGTON — U.S. officials took action Monday against a Chinese company and four of its employees accused of helping to facilitate North Korea's nuclear program.

In a coordinated move, the Justice Department charged employees of the Dandong Hongxiang Industrial Development Co. Ltd., or DHID, with using dozens of fake businesses and bank accounts to evade U.S. sanctions on North Korean nuclear and weapons program.

At the same time, the Treasury Department froze the assets of the company and its employees, including 25 bank accounts and 21 alleged front companies.

U.S. officials say the company was led by Chinese national Ma Xiaohong, 44, whose companies did business with the North Korea-based Korea Kwangson Banking Corporation.. The Treasury Department designated the North Korean firm as a sanctioned company involved in supplying North Korea's nuclear program and its conventional weapons programs in 2009.

The sanctions were imposed under a 2005 executive order signed by President George W. Bush that targets "weapons of mass destruction proliferators and their supporters," and it comes as Congress and President Obama consider additional steps to isolate the North Korean regime following a round of nuclear and missile tests by the North Korean regime.

Of particular concern is China's continuing patronage of North Korea, which receives most of its oil and food from China. It's at least the third time the Treasury Department has sanctioned Chinese individuals and entities related to North Korea's nuclear program.

In this case, North Korea used shell companies with ghost offices that allowed it to move dollars through the international banking system. “The defendants in China established and used shell companies around the world, surreptitiously moved money through the United States and violated the sanctions imposed on North Korea in response to, among other things, its nuclear weapons program,” according to the indictment.

In one transaction described in the complaint, a North Korean diplomat posted in Nakhodka, Russia, wired $3 million in Chinese currency to Ma’s personal bank account so her company could facilitate a U.S. dollar payment on his behalf.

Also indicted and placed on the sanctions list were three Chinese nationals Chinese nationals employed by Ma's company: Zhou Jianshu, Hong Jinhua, and Luo Chuanxu.

North Korea’s Internet only has 28 websites

“Today’s action exposes a key illicit network supporting North Korea’s weapons proliferation,” said Adam J. Szubin, the Treasury Department's chief sanctions official, in a statement. "DHID and its employees sought to evade U.S. and UN sanctions, facilitating access to the U.S. financial system by a designated entity. Treasury will take forceful action to pressure North Korea’s proliferation network and to protect the U.S. financial system from abuse.”