Damian Williams, the USA Lawyer for the Southern District of New York, Matthew G. Olsen, the Assistant Lawyer Normal for Nationwide Safety, and Michael J. Driscoll, the Assistant Director-in-Cost of the New York Area Workplace of the Federal Bureau of Investigation (“FBI”), introduced immediately the unsealing of a Superseding Indictment charging ALEJANDRO CAO DE BENOS, a citizen of Spain, and CHRISTOPHER EMMS, a citizen of the UK, with conspiring to violate United States sanctions on the Democratic Folks’s Republic of Korea (“DPRK” or “North Korea”) by working with U.S. citizen Virgil Griffith to illegally present cryptocurrency and blockchain know-how companies to the DPRK. Each CAO DE BENOS and EMMS stay at massive. Griffith beforehand pled responsible to conspiring to help North Korea in evading sanctions in violation of the Worldwide Emergency Financial Powers Act (“IEEPA”), and was sentenced to 63 months in jail and a $100,000 fantastic by U.S. District Decide P. Kevin Castel.
U.S. Lawyer Damian Williams mentioned: “As alleged, Alejandro Cao de Benos and Christopher Emms conspired with Virgil Griffith, a cryptocurrency skilled convicted of conspiring to violate financial sanctions imposed on North Korea, to show and advise members of the North Korean authorities on cutting-edge cryptocurrency and blockchain know-how, all for the aim of evading U.S. sanctions meant to cease North Korea’s hostile nuclear ambitions. In his personal gross sales pitch, Emms allegedly suggested North Korean officers that cryptocurrency know-how made it ‘potential to switch cash throughout any nation on the planet no matter what sanctions or any penalties which are placed on any nation.’ The sanctions imposed in opposition to North Korea are crucial in defending the safety pursuits of Individuals, and we proceed to aggressively implement them with our regulation enforcement companions each right here and overseas.”
Assistant Lawyer Normal Matthew G. Olsen mentioned: “America won’t enable the North Korean regime to make use of cryptocurrency to evade world sanctions designed to thwart its targets of nuclear proliferation and regional destabilization. This indictment, together with the profitable prosecution of co-conspirator, Virgil Griffith, makes clear that the Division will maintain anybody, wherever positioned, accountable for conspiring with North Korea to violate U.S. sanctions.”
FBI Assistant Director-in-Cost Michael J. Driscoll mentioned: “The 2 topics charged right here immediately, as alleged, conspired to supply monetary companies to the DPRK in direct violation of sanctions in opposition to North Korea imposed by the USA authorities. Our authorities places sanctions in place to guard our nationwide pursuits, and immediately’s motion demonstrates our dedication to implementing them each domestically and globally.”
Based on the allegations contained within the Superseding Indictment unsealed immediately in Manhattan federal courtroom,[1] in addition to different paperwork within the public file and statements made in public courtroom proceedings in reference to the Griffith prosecution:
Pursuant to the IEEPA and Government Order 13466, United States individuals are prohibited from exporting any items, companies, or know-how to the DPRK with no license from the Division of the Treasury, Workplace of International Belongings Management (“OFAC”) and it’s unlawful to conspire with U.S. individuals to do the identical.
Starting in or about early 2018, CAO DE BENOS, the founding father of the “Korean Friendship Affiliation,” a pro-DPRK affinity group, and EMMS, a cryptocurrency businessman, partnered to collectively plan and set up the “Pyongyang Blockchain and Cryptocurrency Convention” (the “DPRK Cryptocurrency Convention”) for the advantage of the DPRK. CAO DE BENOS and EMMS recruited Griffith, an American cryptocurrency skilled, to supply companies to the DPRK on the DPRK Cryptocurrency Convention and organized Griffith’s journey to the DPRK in April 2019 for this goal, in contravention of U.S. sanctions. CAO DE BENOS coordinated approval from the DPRK authorities for Griffith’s participation within the Convention. EMMS confirmed for Griffith that “the dprk won’t stamp your passport,” which might danger revealing Griffith’s journey to U.S. authorities, and that EMMS had “obtained a uncommon full permission” from the DPRK “for US residents to enter the nation” for the DPRK Cryptocurrency Convention.[2]
On the DPRK Cryptocurrency Convention, EMMS and Griffith offered instruction on how the DPRK might use blockchain and cryptocurrency know-how to launder cash and evade sanctions. EMMS and Griffith’s displays on the DPRK Cryptocurrency Convention had been authorized by DPRK officers and tailor-made to the DPRK viewers. For instance, EMMS opened the DPRK Cryptocurrency Convention by stating that it was a “nice honor” to be “main this delegation” to “clarify to you a large number about Blockchain . . . and the way you need to use this know-how right here within the DPRK.” EMMS launched Griffith as an “early scientist” behind blockchain know-how, which, in accordance with EMMS, made it “potential to switch cash throughout any nation on the planet no matter what sanctions or any penalties which are placed on any nation.”
EMMS and Griffith answered particular questions on blockchain and cryptocurrency applied sciences for the DPRK viewers, together with people whom they understood labored for the North Korean authorities, proposed plans to create specialised “sensible contracts” to serve the DPRK’s distinctive pursuits, and mapped out cryptocurrency transactions designed to evade and keep away from U.S. sanctions, together with by diagramming such transactions on a whiteboard for the North Korean viewers. In a single question-and-answer session, EMMS described how North Koreans might use over-the-counter cryptocurrency suppliers in transactions to evade and keep away from U.S. sanctions.
After the DPRK Cryptocurrency Convention, CAO DE BENOS and EMMS continued to conspire with Griffith to supply extra cryptocurrency and blockchain know-how companies to the DPRK, together with by looking for to develop potential cryptocurrency infrastructure and gear inside North Korea, making an attempt to dealer introductions for DPRK Cryptocurrency Convention attendees, via Griffith, to different cryptocurrency service suppliers, and recruiting others via Griffith’s contacts, together with Individuals, to supply skilled companies referring to cryptocurrency to the DPRK. As a part of these efforts, CAO DE BENOS, EMMS, and Griffith deliberate to carry a second cryptocurrency convention within the DPRK in 2020.
CAO DE BENOS and EMMS took steps in an effort to hide their exercise, and Griffith’s function within the conspiracy, from U.S. authorities. Griffith was arrested by U.S. authorities in November 2019, disrupting CAO DE BENOS, EMMS, and Griffith’s scheme and the second convention deliberate for 2020. At no time did CAO DE BENOS, EMMS, or Griffith acquire permission from OFAC to supply items, companies, or know-how to the DPRK.
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CAO DE BENOS, 47, of Spain, and EMMS, 30, of the UK, are charged with one rely of conspiring to violate and evade U.S. sanctions, in violation of IEEPA, which carries a most sentence of 20 years in jail.
The utmost potential sentence is prescribed by Congress and is offered right here for informational functions solely, as any sentencing of the defendants will probably be decided by a choose.
Mr. Williams praised the excellent investigative work of the FBI and its New York Area Workplace, Counterintelligence Division, and thanked the Division of Justice’s Nationwide Safety Division, Counterintelligence and Export Management Part, the Division of Justice’s Workplace of Worldwide Affairs, U.S. Division of Commerce’s Workplace of Export Enforcement, and the Singapore Police Drive for his or her help.
The case is being dealt with by the Workplace’s Nationwide Safety and Worldwide Narcotics Unit. Assistant U.S. Attorneys Kimberly J. Ravener and Kyle A. Wirshba are answerable for the case, with help from Trial Lawyer Matthew J. McKenzie of the Counterintelligence and Export Management Part.
The fees within the Superseding Indictment are merely accusations, and the defendants are presumed harmless except and till confirmed responsible.
[1] Because the introductory phrase signifies, the Superseding Indictment, and the outline of the Superseding Indictment set forth herein, represent solely allegations, and each truth described needs to be handled as an allegation.
[2] The communications described and quoted herein are set forth in substance and partially.
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