A Singaporean national was recently charged in New York with crimes related to his alleged leadership role in a scheme to use an oil tanker to violate US and UN sanctions imposed against North Korea for facilitation of proliferation of weapons of mass destruction, the US Department of Justice (DOJ) said in a statement.
The oil tanker Courageous was seized in March 2020 by Cambodian authorities and held pursuant to the court approval of a US seizure warrant dated April 23.
According to court documents, Kwek Kee Seng, 61, of Singapore, and his co-conspirators engaged in an extensive scheme to evade US and UN sanctions by using vessels under their control to covertly transport fuel to North Korea. One of those vessels was Courageous — formerly known as Sea Prima — which was purchased by Mr Seng through front companies to further the scheme to evade sanctions and launder money.
Pursuant to the International Emergency Economic Powers Act (IEEPA) and the North Korea Sanctions and Policy Enhancement Act of 2016 (NKSPEA), the Democratic People’s Republic of Korea (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 US persons or using the US financial system. The UN 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, Courageous illicitly stopped transmitting location information, during which time satellite imagery shows that the tanker engaged in a ship-to-ship transfer of more than US$1.5 million worth of oil to the North Korean ship Saebyol, which had been designated by OFAC and traveled to the North Korean port of Nampo.
Mr 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 Courageous’ dealings with North Korea, and (3) falsely identifying Courageous as another ship in order to evade detection, the DOJ statement added.
In furtherance of the scheme, Mr Seng and his co-conspirators arranged for a variety of payments, denominated in US dollars, that were processed through US-based correspondent accounts to purchase oil — including more than US$1.5 million to purchase the oil that was transferred to Saebyol, over US$500,000 to buy Courageous, and thousands more dollars to procure necessary services for Courageous and another vessel, including registration fees, ship materials and salary payments for crewmembers.
The DOJ said that Mr 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 Saebyol.
Mr 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 US Sentencing Guidelines and other statutory factors.
The DOJ said Mr Seng remains at large and the US looks forward to working with foreign partners to bring him to justice.
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