U.S. Arrests Two in Alleged $3 Million North Korean IT Fraud Scheme

Two Americans face charges after allegedly helping North Korean IT workers secure positions at over 70 U.S. companies in a scheme prosecutors say generated about $3 million.

Michael James Bostelle of Pennsylvania and Juan Cecilio Pena Carrillo of Texas were arrested after an Ohio federal indictment was unsealed Tuesday. Both face conspiracy charges involving wire fraud, money laundering and identity theft. Pena also faces aggravated identity theft charges.

Prosecutors allege the workers used stolen or fabricated identities, virtual private networks and U.S.-based “laptop farms” to appear to be American employees. Employer-issued computers were hosted at U.S. residences while overseas workers remotely accessed company systems.

The indictment also alleges that cryptocurrency was part of the payment network. A participant allegedly discussed using spreadsheets to track transfers between bank accounts and virtual currencies before sending funds to Sun Sheng Ming, a China-based defendant.

The FBI searched more than 40 Texas residences between Sept. 21 and Sept. 25, seizing approximately 187 laptops and keyboard-video-mouse devices. The indictment alleges the employment revenue was sent to entities controlled by North Korea and subject to sanctions. The charges are allegations, and the defendants are presumed innocent unless proven guilty in court.