Forced Labor and Close Surveillance: The Daily Reality for IT Workers

Thousands of IT workers subjected to forced labor and close surveillance by government security agents

In a shocking revelation, thousands of IT workers from the Democratic People’s Republic of Korea (DPRK) are being subjected to forced labor and close surveillance by government security agents. These workers were lured into working in remote locations with promises of better pay and living conditions, but once they arrived at their destinations, they found themselves trapped in a cycle of exploitation.

The Reality of Forced Labor

• Forced to work long hours, often exceeding 12-16 hours a day
• Little rest or respite for IT workers
• Close surveillance by government agents, restricting freedom of movement
• Primarily employed in the development of mobile and web-based applications, software development, decentralized applications, smart contracts, and digital tokens

The Risk to Financial Institutions

Financial institutions (FIs), including banks, cryptocurrency exchanges, and payment processors, are at risk of being used to facilitate illegal activities by these IT workers. Workers may use their platforms to transfer proceeds ultimately destined for the DPRK’s WMD or Ballistic Missile programs.

Government Advisories

The US Department of Justice, State Department, and FBI have issued advisories warning financial institutions and freelance and staffing agencies about the risks associated with hiring remote IT workers from the DPRK. The advisories recommend that organizations:

• Develop relationships with government agencies early on to report any suspicious activity
• Inform legal teams or in-house counsel about the risks associated with hiring remote IT workers from the DPRK

Guidehouse Expertise

Guidehouse experts are at the forefront of this particular fraud trend, providing detailed training tailored to an organization’s unique risk exposure. This training helps identify, attribute, and mitigate potential IT worker fraud activity.

Red Flags to Watch Out For

• Freelance and staffing agencies hiring fraudulent remote IT workers
• Financial institutions used to facilitate illegal activities by these IT workers
• Close surveillance and restricted freedom of movement for IT workers
• Long working hours, often exceeding 12-16 hours a day
• Lack of rest or respite for IT workers
• Unusual payment methods or transactions

What Can Your Organization Do to Protect Yourself?

• Develop relationships with government agencies early on to report any suspicious activity
• Inform legal teams or in-house counsel about the risks associated with hiring remote IT workers from the DPRK
• Provide detailed training to employees on identifying and mitigating potential IT worker fraud activity
• Stay informed about the latest developments and advisories related to this issue

By taking these steps, organizations can reduce their exposure to fraudulent activities and ensure that they are not inadvertently supporting illegal activities.