A shocking high-level cyber scam has come to public attention after an Arizona woman was arrested for fraud and violation of US sanctions last week.
Arizona Woman Arrested
Last week an Arizona woman, named Christina Chapman, was charged with stealing identities in order to help secure jobs for remote foreign workers, specifically North Korean residents.
Nine Counts of Conspiracy to Defraud
Chapman, along with four other people, three of whom are confirmed to be North Korean nationals, is being charged with nine counts of conspiracy to defraud US companies.
Violating US Sanctions
The US Attorney’s Office for the District of Columbia announced that Chapman had been arrested on Thursday, under suspicion of committing fraud and directly violating US sanctions against North Korea.
Working for the DPRK
The US Justice Department asserts that the five people were part of a broad effort, on behalf of the Democratic People’s Republic of Korea (North Korea’s official name), to recruit overseas workers to remote positions in major US companies.
Thousands of Workers Dispatched
“As alleged in the court documents, DPRK has dispatched thousands of skilled IT workers around the world,” the attorney’s office asserted in a press release.
Stolen US Identities
According to the office, these applicants “used stolen or borrowed US persons’ identities to pose as domestic workers, infiltrate domestic companies’ networks, and raise revenue for North Korea.”
A “Staggering” Case
Federal investigators, who described the scheme as “staggering,” claim that Chapman and others began using stolen US identities to apply to remote positions as early as 2023.
Infiltrating Fortune 500
Using more than 60 stolen US IDs, the group managed to infiltrate over 300 US firms, some of which included Fortune 500 companies.
Big Players Affected
The exact companies affected by the scheme were not named, but court documents did confirm that they also included a major TV network, a prominent Silicon Valley tech company, and an “iconic” auto manufacturer, amongst others.
$6.8 Million in Revenue
What’s more, the efforts on behalf of Chapman and her accomplices were broadly successful up until her arrest. For the last 3 to 4 years the group was able to generate $6.8 million in remote employment, all of which was funneled to the North Korean government.
Misreported Funds
All of this revenue was misreported to the IRS and Social Security Administration, as all generated income was reported under stolen names and social security numbers.
IP Technology
Prosecutors believe the scheme was successful because workers used technology to mimic US IP addresses, and all checks were sent to Chapman who then diverted the funds to North Korean accounts.
Monthly Payments for Chapman
Chapman was allegedly contacted by an agency that asked her to be the “US face” of their company. She benefitted from the fraudulent activity by charging monthly administrative fees to all workers under her “payroll.”
A “Wake-Up Call” for the US
Federal officials have described the case as a “wake-up call” for both the government and US companies, showing how cybersecurity threats and efforts to contravene international sanctions were becoming more powerful and insidious.
Companies and Government Take Notice
“The charges in this case should be a wakeup call for American companies and government agencies that employ remote IT workers,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri.
“A New High-Tec Campaign”
FBI representatives also gave statements on the case. “What these allegations truly represent is a new high-tech campaign to evade U.S. sanctions, victimize U.S. businesses, and steal U.S. identities,” said Kevin Vorndran, Assistant Director of the agency’s Counterintelligence Division.
Everyday Americans
Akil Davis, Special Agent in Charge of the Phoenix Field Office, urged everyday Americans to also be aware of the cybersecurity threat that counterintelligence agents could have on their own lives and identities.
“More Sophisticated and Stealthier”
“That a woman living her quiet life in the outskirts of Phoenix can allegedly get so entangled in something like this clearly indicates our adversaries are getting more sophisticated and stealthier,” Davis said. “So it’s critical that businesses and citizens be hyper-vigilant with their cyber activities.”
No Attorney for Chapman
So far no attorney has been announced for Chapman, and her three North Korean counterparts remain at large.
A Second Suspect Arrested in Poland
The fifth suspect, a Ukrainian citizen named Oleksandr Didenko, was arrested on May 7 in Poland. US authorities are currently seeking his extradition.
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