North Korea Scheme: Phoenix Woman Arrested in IDs Theft, Wire Fraud Scandal

WASHINGTON – A federal indictment unsealed today charges a Phoenix woman with participating in a scheme to defraud U.S. companies by posing as American citizens and stealing their identities, which ultimately benefited North Korea.

The indictment, unsealed in the District of Columbia, charges 44-year-old Kimberly Chapman with conspiracy to commit wire fraud, wire fraud, and money laundering. Chapman allegedly used stolen or borrowed U.S. persons’ identities to pose as domestic workers and infiltrate domestic companies’ networks, raising revenue for North Korea.

As alleged in the court documents, Chapman and her co-conspirators dispatched thousands of skilled IT workers around the world, using proxy computers located in the United States and witting and unwitting U.S. persons and entities to defraud over 300 U.S. companies using U.S. payment platforms and online job site accounts.

Chapman’s arrest was the result of a joint investigation led by the FBI Phoenix and New York Field Offices and IRS Criminal Investigations (IRS-CI), and coordinated with five other FBI field offices and four other U.S. Attorney’s Offices, producing arrests in the United States and Poland, the execution of five premises search warrants, and the seizure of illicitly obtained wages and a website domains.

“The charges in this case should be a wake-up call for American companies and government agencies that employ remote IT workers,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “These crimes are alleged to have benefitted the North Korean government. The Criminal Division remains firm in its commitment to prosecute complex criminal schemes like this one.”

U.S. Attorney Matthew M. Graves for the District of Columbia added, “Today’s announcement of charges and law enforcement action show our broad approach to attacking funding sources for North Korea across the United States. We will continue to vigorously pursue cases against individuals, in the United States and abroad, that use U.S. financial systems to raise revenue for North Korea.”

According to the indictment, Chapman and her co-conspirators used the stolen identities to gain access to U.S. companies’ networks and raise revenue for North Korea. The indictment alleges that Chapman and her co-conspirators committed fraud and stole the identities of American citizens to enable individuals based overseas to pose as domestic, remote IT workers.

The case is the largest ever charged by the Justice Department involving this type of IT workers’ scheme, and it highlights the sophisticated and stealthy nature of North Korea’s attempts to evade sanctions and raise revenue. The FBI has long stated that cybersecurity is national security, and this case is living proof of that.