Friday, January 26, 2018

U.S. Files Amended Complaint to Forfeit $500,000 in EB-5 Funds From Sanctioned Chinese Coal Company Accused of Laundering Money for North Korea

Department of Justice
U.S. Attorney’s Office
District of Columbia

WASHINGTON - The United States has filed an amended complaint to forfeit an additional $500,000, for an aggregate amount of $4,583,935, from Dandong Chengtai Trading Co. Ltd. also known as Dandong Zhicheng Metallic Material Co., Ltd, and its owner Chi Yupeng, announced U.S. Attorney Jessie K. Liu and Jeffrey S. Sallet, Special Agent in Charge of the FBI’s Chicago Field Office.

            The original complaint, which sought to forfeit $4,083,935, was filed on Aug. 22, 2017 in the U.S. District Court for the District of Columbia. According to the complaint, Dandong Chengtai is owned by a Chinese national, Chi Yupeng, and is based in Dandong, China. The investigation revealed that North Korea exports coal for the benefit of the North Korean government, and in particular, its military.  Coal generates over $1 billion in revenue per year for North Korea. 
            Also on Aug. 22, 2017, the Treasury Department designated Dandong Zhicheng for having sold coal from North Korea.  The designation noted that Dandong Zhicheng allegedly used the foreign exchange received from the end users of North Korean coal to purchase other items for North Korea, including nuclear and missile components.  Chi Yupeng was also designated, for having used a network of companies to engage in bulk purchases, wire transfers, and other transactions on behalf of North Korean interests.
            Today’s amended complaints adds $500,000 seized from an EB-5 visa investment account.  The EB-5 visa program provides a method for eligible immigrant investors to become lawful permanent residents (i.e., “green card holders”) by investing at least $500,000 to finance a business in a targeted employment area in the United States that will employ at least 10 American workers. 
            From on or about Nov. 5, 2015, through Nov. 13, 2015, according to the amended complaint, Chi Yupeng and his wife directed 12 wire transfers by 12 different individuals for a combined total of approximately $568,405 into a bank account in the United States controlled by a family member.  These wires ranged in values between approximately $31,335 and $50,000, which the government alleges was part of a scheme to circumvent Chinese capital outflow rules.  On Nov. 13, 2015, the same day as the final transfer into the U.S. bank account, Chi Yupeng and his wife caused a wire for $550,100 to be sent to an EB-5 investment program account.
            The amended complaint states that those funds are subject to forfeiture as Chi Yupeng and Dandong Chengtai generated millions of dollars of revenue from the illegal sale of North Korean coal that benefitted sanctioned entities in North Korea.  The subsequent laundering of the proceeds of these transactions, including by attempting to invest in the EB-5 program is in violation of U.S. law.
            The claims made in the complaint are only allegations and do not constitute a determination of liability.
            The FBI’s Chicago Field Office, with support from the FBI Counterproliferation Center, is investigating the case. Assistant U.S Attorneys Arvind K. Lal, Zia M. Faruqui, Christopher B. Brown, Deborah Curtis, Ari Redbord, and Brian P. Hudak are prosecuting the case, with assistance from Paralegal Specialist Toni Anne Donato and Legal Assistant Jessica McCormick.

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