Japan execs arrested for outsourcing to North Koreans
TOKYO, JAPAN — Two executives in Japan have been arrested under suspicion of outsourcing development work to North Korean IT engineers, a move that may have inadvertently funneled money into North Korea’s controversial foreign currency acquisition activities.
The arrests have sparked concerns over the violation of international sanctions and the potential financing of North Korea’s nuclear and missile programs.
Pak Hyon-il, a 53-year-old South Korean national, and Toshiron Minomo, a 42-year-old Japanese citizen, were issued arrest warrants last March 27. Pak was the president of the Fuchu-based IT firm ITZ, and Minomo led the Fukuyama-based company Robast.
Reports suggest that Robast secured application development contracts from Japanese clients through a business brokering website and then subcontracted the work to North Korean engineers, possibly under the belief that they were based in China.
The Kanagawa and Hiroshima Prefectural Police accused the pair of falsifying electronic notarized records to inflate Robast’s registered capital to 3 million yen ($19,800). The actual capital amount remains unclear. Additionally, the executives face charges of unemployment benefit fraud.
Investigations into a smartphone app development case led to the discovery of suspicious transactions with North Korean IT workers, which may have violated Japan’s banking act.
Authorities are now reportedly probing Pak’s potential connections to North Korean foreign currency acquisition operations.
The Japanese government also issued a stern warning about the risks of hiring North Korean IT contractors posing as Japanese nationals. The guidance highlights the possibility of these workers contributing to North Korea’s nuclear and missile development and participating in cyber activities detrimental to other nations.
Warning signs to look out for include unnatural use of the Japanese language, questionable IP address origins, and discrepancies between the names used for work and payment.
Authorities from the United States and South Korea previously released guidance to help avoid inadvertently hiring North Korean agents, which includes being vigilant about threats to release proprietary source code and inconsistencies in company details.
