Audrey Strauss, the United States Attorney for the Southern District of New York, John C. Demers, the Assistant Attorney General for National Security, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the filing of a criminal complaint charging KWEK KEE SENG with conspiring to evade economic sanctions on the Democratic People’s Republic of Korea (“DPRK” or “North Korea”) and money laundering conspiracy. In addition to these criminal charges, a civil forfeiture complaint was filed against M/T Courageous, an oil products tanker purchased and operated by KWEK to make illicit deliveries of petroleum products through ship-to-ship transfers with North Korean vessels and direct shipments to the North Korean port of Nampo.
The M/T Courageous
Manhattan U.S. Attorney Audrey Strauss said: “As alleged, Kwek Kee Seng conspired to violate international sanctions by arranging illicit deliveries of petroleum products to North Korea, and used front companies and false documentation to send money through the U.S. financial system in furtherance of his support for that pariah state. As a result of his illegal activities, not only does Kwek face criminal charges, but his sanctions-evading ship, the Courageous, has been seized and will no longer enable North Korea’s pattern of evading the global community’s prohibitions on support for that regime. Thanks to the extraordinary cooperation between U.S. and Cambodian law enforcement authorities, the Courageous is out of service. This Office has pioneered the deployment of the full array of criminal and civil enforcement tools to curb North Korea’s deceptive and illicit activities, and today’s actions send a message that anyone who supports the DPRK’s sanctions-busting efforts stands to lose both their liberty and their property.”
Assistant Attorney General John C. Demers said: “The seizure of the Courageous is another step in sinking North Korea’s efforts to circumvent sanctions on the high seas. The United States will continue to enforce sanctions on North Korea through civil forfeiture actions and criminal prosecutions to ensure that the North Korean government – and the private entities that enable this regime by prioritizing personal profit over global security – are held accountable.”
FBI Assistant Director William F. Sweeney Jr. said: “In case our message wasn't clear when we seized M/V Wise Honest in May 2019, our seizure of M/T Courageous should serve as another signal of our intentions: the FBI will not allow adversaries to evade sanctions designed to protect our nation. Kwek is now a fugitive on our radar, and his ship is now ours. We are grateful to our international partners who have worked with us to ensure the safety of the citizens we serve."
According to the criminal and civil documents filed today in Manhattan federal court:[1]
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 are prohibited from engaging in transactions with U.S. persons or using the U.S. financial system. The United Nations Security Council has similarly imposed economic sanctions on North Korea, prohibiting among other things the conduct of ship-to-ship transfers with DPRK-flagged vessels and the provision of petroleum products to the DPRK.
For a four-month period between August and December 2019, M/T Courageous illicitly stopped transmitting location information, during which time satellite imagery shows that M/T Courageous engaged in a ship-to-ship transfer of more than $1.5 million worth of oil to a North Korean ship, the Saebyol, which had been designated by OFAC, and traveled to the North Korean port of Nampo. Seng and his co-conspirators took additional steps to hide the scheme by (1) operating a series of shell companies, (2) lying to international shipping authorities about M/T Courageous’ dealings with North Korea, and (3) falsely identifying M/T Courageous as another ship in order to evade detection.
In furtherance of the scheme, Seng and his co-conspirators arranged for a variety of payments, denominated in U.S. dollars, that were processed through U.S.-based correspondent accounts to purchase oil – including more than $1.5 million to purchase the oil that was transferred to the Saebyol, over $500,000 to buy M/T Courageous, and thousands more dollars to procure necessary services for M/T Courageous and another vessel, including registration fees, ship materials and salary payments for crewmembers. Seng and his co-conspirators overseas sought to conceal these sanctions-evading transactions by, among other things, using front companies to disguise the nature of the transactions; disguising location information for vessels carrying illicit shipments; and conducting ship-to-ship fuel transfers on the open sea in an attempt to hide their counterparties, such as the Saebyol.
Cambodian authorities seized M/T Courageous in March of 2020, and have been holding the vessel pursuant to a U.S. seizure warrant, which was issued under seal on April 2, 2020.
* * *
KWEK, 61, of Singapore, is charged with conspiring to violate the IEEPA and to commit money laundering. Each count carries a maximum term of 20 years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
KWEK KEE SENG remains at large. The United States looks forward to working with our foreign partners to bring KWEK to justice.
Ms. Strauss praised the outstanding investigative work of the FBI and its New York Field Office, Counterintelligence Division. Ms. Strauss also thanked the FBI Legal Attaché Office in Phnom Penh, Cambodia; the Department of Justice’s National Security Division, Counterintelligence and Export Control Section, Money Laundering and Asset Recovery Section’s Program Operations Unit, and Office of International Affairs; the United States Coast Guard; the Cambodian Ministry of Justice; and the Cambodian National Police, for their assistance.
The cases are being handled by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorneys David W. Denton Jr. and Kimberly J. Ravener are in charge of the cases, with assistance from Trial Attorney Matthew McKenzie of the Counterintelligence and Export Control Section.
The charges in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation against Kwek.
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