Korea, Democratic People’s Republic of: Justice Department Announces Multiple Arrests in Stolen Identity Theft Scheme Benefiting North Korean Government
Major Crackdown on Fraud Exposes Complex Stolen Identity Theft Scheme
The United States Justice Department has announced multiple arrests in a series of complex stolen identity theft cases that officials say are part of a wide-ranging scheme generating enormous proceeds for the North Korean government. The conspiracy involves thousands of North Korean information technology (IT) workers dispatched by the government to live abroad and rely on stolen American identities to obtain remote employment at U.S.-based Fortune 500 companies.
How the Scheme Worked
According to officials, these workers were able to access sensitive corporate data and lucrative paychecks while living overseas, unbeknownst to their U.S. employers. The fraud scheme is seen as a way for heavily sanctioned North Korea to take advantage of the convergence of factors such as a high-tech labor shortage in the U.S. and the proliferation of remote telework.
The Justice Department’s Strategy
The Justice Department says the cases are part of a broader strategy to not only prosecute individuals who enable the fraud but also build partnerships with other countries and warn private-sector companies about the need to be vigilant and not duped by the actual identities of those they’re hiring.
Initiative Launched in March
FBI and Justice Department officials launched an initiative in March centered on the fraud scheme, which led to the seizure of over a dozen website domains used by North Korean IT workers. “More and more often, compliance programs at American companies and organizations are on the front lines of protecting our national security,” said Marshall Miller, principal associate deputy attorney general.
Key Findings
- Over 300 companies have been affected
- Over $6.8 million in revenue generated for the workers, who are based outside of the U.S., including China and Russia
- Those arrested include:
- Christina Marie Chapman, an Arizona woman who allegedly facilitated the scheme by helping workers obtain and validate stolen identities
- Oleksandr Didenko, a Ukrainian man who created fake accounts at job search platforms that he then sold to overseas workers
- Minh Phuong Vong, a Vietnamese national who was arrested in Maryland on charges of fraudulently obtaining a job at a U.S. company
FBI Public Service Announcement
The FBI has issued a public service announcement warning companies about the scheme and encouraging them to implement identity verification standards through the hiring process.
State Department Reward Offered
The State Department is also offering a reward for information about certain North Korean IT workers who officials say were assisted by Chapman.
Case Highlights Complex Nature of Fraud Detection
The case highlights the increasingly complex nature of fraud detection, with corporate compliance and national security now intertwined like never before.