U.S. Accuses Chinese Company of Money Laundering for North Korea

TOKYO — United States prosecutors accused a Chinese company on Thursday of laundering money for North Korea and said they would seek $1.9 million in civil penalties, as American efforts to put pressure on the isolated country continue to affect Pyongyang’s neighbor and biggest benefactor.

Prosecutors said the company, Mingzheng International Trading Limited, operated as a front company for North Korea’s state-run Foreign Trade Bank, which since 2013 has been the target of American sanctions intended to choke off funds connected to the country’s nuclear weapons program. The penalty, if approved by the United States District Court for the District of Columbia, would be “one of the largest seizures of North Korean funds by the department,” according to a statement from prosecutors.

In their statement, prosecutors said Mingzheng was created to “surreptitiously move North Korean money through the United States.” In a filing with the court, prosecutors said the funds were being held in a bank account in the United States.

Calls to a Mingzheng phone number in Hong Kong, a semiautonomous Chinese city where the company is registered, were not answered.

The United States has increasingly targeted North Korea’s money sources with the outside world to help tame its ambitions to develop nuclear weapons. That effort has led American officials to focus on companies in China, which acts as North Korea’s protector and is its most important trading partner.

Last year, the United States Treasury said it would cut off from the American financial system any bank or company conducting banking transactions with North Korea. Experts said the move could hit smaller regional banks in China, especially those along its border with North Korea.

China has opposed the effort, saying the United States is imposing its own domestic laws on other countries.

Citing confidential informants, prosecutors said Mingzheng was operated by a Chinese citizen with ties to the Foreign Trade Bank. It did not name the citizen.

Mingzheng’s corporate filings in Hong Kong listed its sole shareholder as Sun Wei, a resident of Benxi, an area near the Chinese city of Shenyang in Liaoning Province. Mr. Sun could not be reached for comment.

Prosecutors told the court that Mingzheng’s financial transactions were closely linked to another Chinese company called Dandong Hongxiang. Last year, the Justice Department filed criminal charges against its top executive and several of her colleagues, accusing them of violating American sanctions through a similar, covert money-transfer scheme.

Citing a confidential informant, prosecutors also said Mingzheng played a role in payments between a North Korean telecommunications company and ZTE, a Chinese maker of telecommunications equipment. In March, ZTE agreed to plead guilty and pay $1.19 billion in fines as part of a settlement for breaking United States sanctions and selling electronics to North Korea and Iran.

The United States Justice Department said the $1.9 million was the amount that Mingzheng transferred on North Korea’s behalf in October and November 2015.

Those payments, made in dollars, were cleared through the United States, the prosecutors said, who are seeking permission from the court to seize the funds.

https://www.nytimes.com/2017/06/16/business/north-korea-money-laundering-mingzheng.html

Photo: Associated Press