Geoffrey S. Berman, the United States Attorney for the
Southern District of New York, and John C. Demers, Assistant Attorney General
for National Security, announced today the entry of a judgment of forfeiture
regarding the M/V Wise Honest (the “Wise Honest”), a 17,061-ton, single-hull
bulk carrier ship flagged in the Democratic People’s Republic of Korea (“DPRK”
or “North Korea”). The Wise Honest, one
of the largest North Korean-flagged vessels, was used to conduct large illicit
shipments of coal from North Korea and to import heavy machinery back to the
DPRK. Payments for maintenance,
equipment, and improvements of the Wise Honest were made in U.S. dollars
through unwitting U.S. banks, in violation of U.S. law and United Nations
Security Council resolutions.
U.S. Attorney Geoffrey S. Berman said: “Today’s judgment of forfeiture finalizes the
U.S. government’s seizure of the Wise Honest and officially takes this North
Korean vessel out of commission. It will
no longer be used to further a criminal scheme.
Using the full set of tools at our disposal, we will continue to
investigate and prosecute attempts to evade U.S. sanctions, including by the
North Korean regime.”
Assistant Attorney General for National Security John C.
Demers said: “This order of forfeiture
sinks the Wise Honest’s career as one of North Korea’s largest
sanctions-busting vessels. The
Department of Justice will continue to pursue other property used to violate
U.S. and international sanctions, around the globe, with the cooperation of our
international partners.”
According to documents filed in Manhattan federal court:
Pursuant to the International Emergency Economic Powers Act
(“IEEPA”) and the North Korea Sanctions and Policy Enhancement Act of 2016
(“NKSPEA”), the DPRK and individuals or entities that the Department of the
Treasury, Office of Foreign Assets Control (“OFAC”) has determined are involved
in the facilitation of proliferation of weapons of mass destruction (“WMDs”)
are prohibited from engaging in transactions with U.S. persons, involving
U.S.-origin goods, or using the U.S. financial system. The United Nations Security Council has
similarly prohibited the provision of goods, technology, and services to North
Korea, including the sale, supply, or transfer of coal.
From November 2016 through April 2018, the Wise Honest was
used by Korea Songi Shipping Company, an affiliate of Korea Songi General
Trading Corporation – which, in 2017, OFAC determined was “subordinate to the
[Korean People’s Army] and involved in exporting North Korean coal” – and one
of Korea Songi Shipping Company’s representatives, Kwon Chol Nam, to export
coal from North Korea to foreign purchasers and import machinery to North Korea
(the “Korea Songi Scheme”).
On March 14, 2018, the Wise Honest was loaded with coal in
Nampo, North Korea. On April 2, 2018,
Indonesian maritime authorities intercepted and detained the Wise Honest. Although maritime regulations require vessels
like the Wise Honest engaged in international voyages to operate an automatic
identification system (“AIS”) capable of providing information about the vessel
to other ships and to coastal authorities, and despite its March 2018 voyage
from North Korea, the Wise Honest had not broadcast an AIS signal since August
4, 2017.
Participants in the Korea Songi Scheme additionally
attempted to conceal the Wise Honest’s DPRK affiliation by falsely listing the
Wise Honest’s nationality or the origin of the illicit coal on board the vessel
in shipping documentation, for example, as from Tanzania or Russia.
In connection with Korea Songi Scheme, Kwon paid for
numerous improvements, equipment purchases, and service expenditures for the
Wise Honest in U.S. dollars through U.S. financial institutions. Such transfers constitute a provision of
services by U.S. banks to both the sender and recipient of the funds, and U.S.
law prohibits banks from providing such services to North Korean parties. In connection with the March 2018 shipment of
coal on board the Wise Honest alone, payments totaling more than $750,000 were
transmitted through accounts at a U.S. financial institution.
On May 9, 2019, the U.S. Attorney’s Office filed a civil
forfeiture complaint against the Wise Honest, which had previously been seized
pursuant to a warrant issued in the Southern District of New York. Today’s judgment of forfeiture was ordered by
U.S. District Judge P. Kevin Castel.
*
* *
Mr. Berman praised the outstanding investigative work of the
Federal Bureau of Investigation and its New York Field Office,
Counterintelligence Division, and thanked the Department of Justice’s Money
Laundering and Asset Recovery Section’s Program Operations Unit and Office of
International Affairs, the U.S. Coast Guard, and the Department of State for
their assistance.
Mr. Berman also thanked Fred and Cindy Warmbier, the parents
of the late Otto Warmbier, for their willingness to voluntarily withdraw their
claim in the action in order to facilitate the forfeiture of the Wise Honest.
The case is being handled by the Office’s Terrorism and
International Narcotics Unit and Money Laundering and Transnational Criminal
Enterprises Unit. Assistant U.S.
Attorneys David W. Denton Jr. and Benet J. Kearney are in charge of the case,
with assistance from Trial Attorney Christian Ford of the Counterintelligence
and Export Control Section.
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