Texas Border Business
Note: A full copy of the complaint can be viewed here.
WASHINGTON – A Singaporean national was charged today in New York with crimes related to his alleged leadership role in a scheme to use an oil tanker to violate U.S. and U.N. sanctions imposed against North Korea for facilitation of proliferation of weapons of mass destruction.
The oil tanker, the M/T Courageous was seized last month by Cambodian authorities and held pursuant to the court approval of today’s U.S. seizure warrant.
According to court documents, Kwek Kee Seng, 61, of Singapore, and his co-conspirators engaged in an extensive scheme to evade U.S. and U.N. sanctions by using vessels under their control to covertly transport fuel to North Korea, providing a critical resource for the North Korean government and for DPRK-based companies. One of those vessels was M/T Courageous — formerly known as the Sea Prima — which was purchased by Seng through front companies to further the scheme to evade sanctions and launder money.
“The seizure of the Courageous is another step in sinking North Korea’s efforts to circumvent sanctions on the high seas,” said Assistant Attorney General John C. Demers for the Justice Department’s National Security Division. “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.”
“The FBI investigates violations of U.S. law wherever they may occur, even in the middle of an ocean,” said Assistant Direct Alan E. Kohler Jr. of the FBI’s Counterintelligence Division. “Those individuals who decide to violate sanctions imposed on North Korea should expect to encounter the full force of U.S. law enforcement.”
“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,” said U.S. Attorney Audrey Strauss for the Southern District of New York. “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.”
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’s 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.
Seng is charged with conspiring to violate the IEEPA and to commit money laundering. If convicted, each count carries a maximum term of imprisonment of 20 years. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Seng remains at large and the United States looks forward to working with our foreign partners to bring him to justice.
Acting U.S. Attorney Strauss praised the outstanding investigative work of the FBI and its New York Field Office, Counterintelligence Division. Strauss also thanked the FBI Legal Attaché Office in Phnom Penh, Cambodia; the Justice Department’s National Security Division, Counterintelligence and Export Control Section, Money Laundering and Asset Recovery Section’s Program Operations Unit, Office of International Affairs; the U.S. Coast Guard; the Cambodian Ministry of Justice; and the Cambodian National Police, for their assistance.
Trial Attorney Matthew McKenzie of the National Security Division’s Counterintelligence and Export Control Section and Assistant U.S. Attorneys David W. Denton Jr. and Kimberly J. Ravener are prosecuting the case.
A criminal complaint is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
