“North Korea is not just a threat to the homeland from afar. It is an enemy within. It is perpetrating fraud on American citizens, American companies, and American banks. It is a threat to Main Street in every sense of the word,” said U.S. Attorney Jeanine Pirro in a statement. “The call is coming from inside the house. If this happened to these big banks, to these Fortune 500, brand name, quintessential American companies, it can or is happening at your company. Corporations failing to verify virtual employees pose a security risk for all. You are the first line of defense against the North Korean threat.”
Acting Assistant Attorney General Matthew Galeotti said in a statement: “The defendant’s role as a U.S.-based facilitator was critical to North Korea’s complex scheme to defraud American companies and steal the identities of American citizens. This multi-year plot highlights the unique threat that North Korea poses to U.S. companies who hire remote workers. The Criminal Division remains steadfast in its commitment to identify and prosecute individuals who facilitate these criminal schemes against U.S. companies.”
Before Thursday’s hearing, prosecutors said a sentence that was too lenient would convey the wrong message to North Koreans perpetuating the scheme and any potential U.S. facilitators. Cybersecurity experts said the sentence will set a strategic precedent about punishment for Americans who get involved in the way adversaries use AI to deceive the U.S.
Prosecutors said human cost is unmistakable and the Americans who had their identities stolen in the scheme have faced severe consequences. Fake tax liabilities were created in their names, and they’ve faced ongoing monitoring from the IRS and Social Security Administration. One victim was denied unemployment because an IT worker was using their Social Security number, according to Chapman’s sentencing memo.
“The North Korean regime has generated millions of dollars for its nuclear weapons program by victimizing American citizens, businesses, and financial institutions,” said FBI Assistant Director Roman Rozhavsky of the FBI’s Counterintelligence Division in a statement. “However, even an adversary as sophisticated as the North Korean government can’t succeed without the assistance of willing U.S. citizens like Christina Chapman, who was sentenced today for her role in an elaborate scheme to defraud more than 300 American companies by helping North Korean IT workers gain virtual employment and launder the money they earned. Today’s sentencing demonstrates that the FBI will work tirelessly with our partners to defend the homeland and hold those accountable who aid our adversaries.”
