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EU, UK Citizens charged with facilitating North Korean sanctions evasion

Department of Justice

U.S. Attorney’s Office

Southern District of New York


FOR IMMEDIATE RELEASE

Monday, April 25, 2022

U.S. Attorney Announces Charges Against Two European Citizens For Conspiring With A U.S. Citizen To Assist North Korea In Evading U.S. Sanctions

Alejandro Cao de Benos and Christopher Emms Allegedly Conspired with American Virgil Griffith to Provide Cryptocurrency and Blockchain Services to North Korea

Damian Williams, the United States Attorney for the Southern District of New York, Matthew G. Olsen, the Assistant Attorney General for National Security, and Michael J. Driscoll, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of a Superseding Indictment charging ALEJANDRO CAO DE BENOS, a citizen of Spain, and CHRISTOPHER EMMS, a citizen of the United Kingdom, with conspiring to violate United States sanctions on the Democratic People’s Republic of Korea (“DPRK” or “North Korea”) by working with U.S. citizen Virgil Griffith to illegally provide cryptocurrency and blockchain technology services to the DPRK. Both CAO DE BENOS and EMMS remain at large. Griffith previously pled guilty to conspiring to assist North Korea in evading sanctions in violation of the International Emergency Economic Powers Act (“IEEPA”), and was sentenced to 63 months in prison and a $100,000 fine by U.S. District Judge P. Kevin Castel.

U.S. Attorney Damian Williams said:  “As alleged, Alejandro Cao de Benos and Christopher Emms conspired with Virgil Griffith, a cryptocurrency expert convicted of conspiring to violate economic sanctions imposed on North Korea, to teach and advise members of the North Korean government on cutting-edge cryptocurrency and blockchain technology, all for the purpose of evading U.S. sanctions meant to stop North Korea’s hostile nuclear ambitions. In his own sales pitch, Emms allegedly advised North Korean officials that cryptocurrency technology made it ‘possible to transfer money across any country in the world regardless of what sanctions or any penalties that are put on any country.’ The sanctions imposed against North Korea are critical in protecting the security interests of Americans, and we continue to aggressively enforce them with our law enforcement partners both here and abroad.”

Assistant Attorney General Matthew G. Olsen said:  “The United States will not allow the North Korean regime to use cryptocurrency to evade global sanctions designed to thwart its goals of nuclear proliferation and regional destabilization. This indictment, along with the successful prosecution of co-conspirator, Virgil Griffith, makes clear that the Department will hold anyone, wherever located, accountable for conspiring with North Korea to violate U.S. sanctions.”

FBI Assistant Director-in-Charge Michael J. Driscoll said:  “The two subjects charged here today, as alleged, conspired to provide financial services to the DPRK in direct violation of sanctions against North Korea imposed by the United States government.  Our government puts sanctions in place to protect our national interests, and today’s action demonstrates our commitment to enforcing them both domestically and globally.”

According to the allegations contained in the Superseding Indictment unsealed today in Manhattan federal court,[1] as well as other documents in the public record and statements made in public court proceedings in connection with the Griffith prosecution:

Pursuant to the IEEPA and Executive Order 13466, United States persons are prohibited from exporting any goods, services, or technology to the DPRK without a license from the Department of the Treasury, Office of Foreign Assets Control (“OFAC”) and it is illegal to conspire with U.S. persons to do the same.

Beginning in or about early 2018, CAO DE BENOS, the founder of the “Korean Friendship Association,” a pro-DPRK affinity organization, and EMMS, a cryptocurrency businessman, partnered to jointly plan and organize the “Pyongyang Blockchain and Cryptocurrency Conference” (the “DPRK Cryptocurrency Conference”) for the benefit of the DPRK. CAO DE BENOS and EMMS recruited Griffith, an American cryptocurrency expert, to provide services to the DPRK at the DPRK Cryptocurrency Conference and arranged Griffith’s travel to the DPRK in April 2019 for this purpose, in contravention of U.S. sanctions. CAO DE BENOS coordinated approval from the DPRK government for Griffith’s participation in the Conference. EMMS confirmed for Griffith that “the dprk will not stamp your passport,” which could risk revealing Griffith’s travel to U.S. authorities, and that EMMS had “obtained a rare full permission” from the DPRK “for US citizens to enter the country” for the DPRK Cryptocurrency Conference.[2]

At the DPRK Cryptocurrency Conference, EMMS and Griffith provided instruction on how the DPRK could use blockchain and cryptocurrency technology to launder money and evade sanctions. EMMS and Griffith’s presentations at the DPRK Cryptocurrency Conference had been approved by DPRK officials and tailored to the DPRK audience. For example, EMMS opened the DPRK Cryptocurrency Conference by stating that it was a “great honor” to be “leading this delegation” to “explain to you a lot about Blockchain . . . and how you can use this technology here in the DPRK.” EMMS introduced Griffith as an “early scientist” behind blockchain technology, which, according to EMMS, made it “possible to transfer money across any country in the world regardless of what sanctions or any penalties that are put on any country.”

EMMS and Griffith answered specific questions about blockchain and cryptocurrency technologies for the DPRK audience, including individuals whom they understood worked for the North Korean government, proposed plans to create specialized “smart contracts” to serve the DPRK’s unique interests, and mapped out cryptocurrency transactions designed to evade and avoid U.S. sanctions, including by diagramming such transactions on a whiteboard for the North Korean audience. In one question-and-answer session, EMMS described how North Koreans could use over-the-counter cryptocurrency providers in transactions to evade and avoid U.S. sanctions.

After the DPRK Cryptocurrency Conference, CAO DE BENOS and EMMS continued to conspire with Griffith to provide additional cryptocurrency and blockchain technology services to the DPRK, including by seeking to develop potential cryptocurrency infrastructure and equipment inside North Korea, attempting to broker introductions for DPRK Cryptocurrency Conference attendees, through Griffith, to other cryptocurrency service providers, and recruiting others through Griffith’s contacts, including Americans, to provide expert services relating to cryptocurrency to the DPRK. As part of these efforts, CAO DE BENOS, EMMS, and Griffith planned to hold a second cryptocurrency conference in the DPRK in 2020.

CAO DE BENOS and EMMS took steps in an effort to conceal their activity, and Griffith’s role in 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 conference planned for 2020. At no time did CAO DE BENOS, EMMS, or Griffith obtain permission from OFAC to provide goods, services, or technology to the DPRK.

*                      *                     *

CAO DE BENOS, 47, of Spain, and EMMS, 30, of the United Kingdom, are charged with one count of conspiring to violate and evade U.S. sanctions, in violation of IEEPA, which carries a maximum sentence of 20 years in prison.

The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.

Mr. Williams praised the outstanding investigative work of the FBI and its New York Field Office, Counterintelligence Division, and thanked the Department of Justice’s National Security Division, Counterintelligence and Export Control Section, the Department of Justice’s Office of International Affairs, U.S. Department of Commerce’s Office of Export Enforcement, and the Singapore Police Force for their assistance.

The case is being handled by the Office’s National Security and International Narcotics Unit. Assistant U.S. Attorneys Kimberly J. Ravener and Kyle A. Wirshba are in charge of the case, with assistance from Trial Attorney Matthew J. McKenzie of the Counterintelligence and Export Control Section.

The charges in the Superseding Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.


[1] As the introductory phrase signifies, the Superseding Indictment, and the description of the Superseding Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.

[2] The communications described and quoted herein are set forth in substance and in part.

Links:

DOJ Press Releases – SDNY, Office of Public Affairs

Indictment

Categories: Department of Justice (DOJ) Updates Indictments and Arrests North Korea (DPRK) Sanctions Sanctions Evasion

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