Two individuals are charged in a superseding indictment, unsealed today in the Southern District of New York, with conspiring to violate U.S. 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.
According to court documents, Alejandro Cao De Benos, 47, a citizen of Spain, and Christopher Emms, 30, a citizen of the United Kingdom, partnered to jointly plan and organize the Pyongyang Blockchain and Cryptocurrency Conference (the DPRK Cryptocurrency Conference) for the benefit of the DPRK. Both Cao De Benos and Emms remain at large. Griffith pleaded guilty to conspiring to assist North Korea in evading sanctions in violation of the International Emergency Economic Powers Act (IEEPA), and was sentenced on April 12 to 63 months in prison and a $100,000 fine by U.S. District Judge P. Kevin Castel.
“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,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “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.”
“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,” said U.S. Attorney Damian Williams for the Southern District of New York. “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.”
“Those contemplating evading U.S. sanctions against a foreign government should know the FBI and its partners will aggressively investigate these cases,” said Acting Assistant Director Bradley S. Benavides of the FBI’s Counterintelligence Division. “The FBI appreciates the partnership of the U.S. Department of Commerce and the Singapore Police Force, whose work helped secure this indictment.”
Pursuant to the IEEPA and Executive Order 13466, U.S. persons are prohibited from exporting any goods, services or technology to the DPRK without a license from the Department of the Treasury’s Office of Foreign Assets Control (OFAC) and it is illegal to conspire with U.S. persons to do the same.
As alleged in the superseding indictment, 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 DPRK Cryptocurrency Conference for the benefit of the DPRK. Cao De Benos and Emms recruited Griffith, an American cryptocurrency expert, to provide services 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 U.S. citizens to enter the country” for the DPRK Cryptocurrency Conference.
According to court documents, 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, and Emms’ and Griffith’s presentations were 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.
As alleged, Cao De Benos and Emms took steps 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 and Emms are charged with one count of conspiring to violate and evade U.S. sanctions, in violation of IEEPA, which carries a maximum statutory penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The FBI is investigating the case, with valuable assistance provided by the National Security Division’s Counterintelligence and Export Control Section, the Justice Department’s Office of International Affairs, the Department of Commerce’s Office of Export Enforcement, and the Singapore Police Force.
Assistant U.S. Attorneys Kimberly J. Ravener and Kyle A. Wirshba for the Southern District of New York and Trial Attorney Matthew J. McKenzie of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.
An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.