2 arrested in scheme placing North Korean IT workers in U.S. firms
ARIZONA, UNITED STATES — Federal authorities arrested two individuals in connection with a sophisticated scheme that enabled North Korean IT workers to secure remote positions at over 300 U.S. companies using stolen identities.
Elaborate scheme to infiltrate companies
According to the U.S. Department of Justice, Christina Marie Chapman, 49, of Litchfield Park, Arizona, and Oleksandr Didenko, 27, of Kyiv, Ukraine, are accused of orchestrating the fraudulent operation.
Chapman allegedly ran a “laptop farm” from her home, where she hosted computers that North Korean IT workers used to appear as though they were working from the United States.
This allowed the workers to secure employment at major U.S. firms, including Fortune 500 companies.
Impact and charges
The scheme compromised the identities of more than 60 U.S. citizens and affected over 300 companies.
It generated at least $6.8 million in revenue for the North Korean government, which was funneled back to support its weapons programs. The Justice Department has seized funds related to the scheme from Chapman.
Chapman faces multiple charges, including conspiracy to defraud the United States, wire fraud, bank fraud, aggravated identity theft, and money laundering. If convicted, she could face up to 97.5 years in prison.
Didenko is accused of creating and selling accounts on freelance IT job search platforms using false identities. He managed as many as 871 proxy identities and operated at least three U.S.-based laptop farms. Didenko was arrested in Poland and faces up to 67.5 years in prison if convicted.
“Using the stolen identities of U.S. citizens is a crime by itself, but when you use those identities to procure employment for foreign nationals with ties to North Korea at hundreds of U.S. companies, you have compromised the national security of an entire nation,” said Chief Guy Ficco of IRS-Criminal Investigation.
“On the surface, today’s allegations of wire fraud, identity theft, and money laundering may read like a typical white-collar or economic crime scheme,” said Assistant Director Kevin Vorndran of the FBI’s Counterintelligence Division.
“But what these allegations truly represent is a new high-tech campaign to evade [U.S.] sanctions, victimize [U.S.] businesses, and steal [U.S.] identities.”
Ongoing investigation
The Justice Department has also offered a $5 million reward for information leading to the arrest of three North Korean nationals involved in the scheme, known by the aliases Jiho Han, Chunji Jin, and Haoran Xu. Their manager, Zhonghua, is also being sought.
The investigation continues as authorities work to dismantle the network and prevent further infiltration of U.S. companies by North Korean operatives.
Just last month, major U.S. animation studios were found to have inadvertently outsourced work to North Korean illustrators and graphic designers.
Two Japanese executives were also arrested last March under suspicion of outsourcing development work to North Korean IT engineers.
The Federal Bureau of Investigation (FBI) has already 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.
