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Arizona woman in North Korean IT workers scheme sentenced to 8.5 years for helping to trick Fortune 500 companies out of millions

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Christina Chapman, 50, an Arizona woman who pleaded guilty to charges connected to the global North Korean IT workers scheme, has been sentenced to 8.5 years in federal prison. U.S. District Court Judge Randolph D. Moss also ordered Chapman to forfeit proceeds of $284,000 that was to be paid to the North Koreans. She was also ordered to pay a judgement of $176,850—the same amount she charged North Koreans for her help in the scheme that authorities said was one of the largest IT worker conspiracies charged by the Department of Justice. 

According to court documents, Chapman helped North Korean workers fraudulently obtain remote-work jobs at U.S. companies. Authorities said she helped to conceal their identities by accepting and safeguarding their laptops, installing remote-access software, and filling out identity forms to make it seem like they were in the U.S. when they were actually overseas. Prosecutors said Chapman turned her home into a “laptop farm,” with labels on each device identifying the associated company and stolen identity, photos from a 2023 raid of Chapman’s house show. All told, the scheme Chapman involved herself in claimed about $17.1 million in salaries from 309 U.S. businesses, paid to North Koreans posing as American IT workers. Nearly 70 Americans had their identities stolen, authorities said.  

“North Korea is not just a threat to the homeland from afar. It is an enemy within. It is perpetrating fraud on American citizens, American companies, and American banks. It is a threat to Main Street in every sense of the word,” said U.S. Attorney Jeanine Pirro in a statement. “The call is coming from inside the house. If this happened to these big banks, to these Fortune 500, brand name, quintessential American companies, it can or is happening at your company. Corporations failing to verify virtual employees pose a security risk for all. You are the first line of defense against the North Korean threat.”

Pirro, in a press conference, said Nike was one of the victims and wrote a letter identifying themselves as one of the companies that unwittingly hired a North Korean IT worker and paid the employee $70,000.

Acting Assistant Attorney General Matthew Galeotti said in a statement: “The defendant’s role as a U.S.-based facilitator was critical to North Korea’s complex scheme to defraud American companies and steal the identities of American citizens. This multi-year plot highlights the unique threat that North Korea poses to U.S. companies who hire remote workers. The Criminal Division remains steadfast in its commitment to identify and prosecute individuals who facilitate these criminal schemes against U.S. companies.”

Before Thursday’s hearing, prosecutors said a sentence that was too lenient would convey the wrong message to North Koreans perpetuating the scheme and any potential U.S. facilitators. Cybersecurity experts said the sentence will set a strategic precedent about punishment for Americans who get involved in the way adversaries use AI to deceive the U.S. 

Andrew Borene, executive director at Flashpoint threat intelligence, told Fortune: “This prosecution aims to draw a line, deterring future U.S. facilitators and sending a message to Pyongyang.”

Chapman’s role running a laptop farm in the scheme peels back the curtain on a coordinated campaign by the Democratic People’s Republic of Korea (DPRK) to infiltrate American, and increasingly, European businesses

Following crushing financial sanctions in 2016 that cut off North Korea from the U.S. financial system and banned North Korean workers from getting jobs at U.S. businesses, DPRK leaders created a scheme to weaponize remote work, court documents show. Workers, trained in tech and AI from an early age, are deployed to China, Russia, Nigeria, or the United Arab Emirates to manage dozens of fake or stolen identities, apply for remote IT jobs, and then send their salaries back to North Korea. UN documents show DPRK authoritarian ruler Kim Jong Un allegedly uses the illicit funds to finance the country’s nuclear-weapons program. 

For corporate America, the North Korean IT worker scheme has been a wake-up call that has been ringing off the hook for the past two years. Hundreds of Fortune 500 companies have been found to have hired thousands of North Korean IT workers—and the workers have continued to get jobs. UN estimates show the scheme generates between $250 million to $600 million annually for the regime. 

Prosecutors said human cost is unmistakable and the Americans who had their identities stolen in the scheme have faced severe consequences. Fake tax liabilities were created in their names, and they’ve faced ongoing monitoring from the IRS and Social Security Administration. One victim was denied unemployment because an IT worker was using their Social Security number, according to Chapman’s sentencing memo. 

While Chapman’s role in the scheme involved direct contact with laptops—including shipping devices to China, Pakistan, the UAE, and Nigeria—other Americans who have become embroiled in the scheme have done so unwittingly. A North Korean defector who uses the alias “Kim Ji-min” previously told Fortune, via an interpreter, that Americans involved had “no idea” they were working with North Koreans. Kim said he received and carried out development orders from American companies and concealed his identity completely. 

 “The North Korean regime has generated millions of dollars for its nuclear weapons program by victimizing American citizens, businesses, and financial institutions,” said FBI Assistant Director Roman Rozhavsky of the FBI’s Counterintelligence Division in a statement. “However, even an adversary as sophisticated as the North Korean government can’t succeed without the assistance of willing U.S. citizens like Christina Chapman, who was sentenced today for her role in an elaborate scheme to defraud more than 300 American companies by helping North Korean IT workers gain virtual employment and launder the money they earned. Today’s sentencing demonstrates that the FBI will work tirelessly with our partners to defend the homeland and hold those accountable who aid our adversaries.”



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Epstein grand jury documents from Florida can be released by DOJ, judge rules

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A federal judge on Friday gave the Justice Department permission to release transcripts of a grand jury investigation into Jeffrey Epstein’s abuse of underage girls in Florida — a case that ultimately ended without any federal charges being filed against the millionaire sex offender.

U.S. District Judge Rodney Smith said a recently passed federal law ordering the release of records related to Epstein overrode the usual rules about grand jury secrecy.

The law signed in November by President Donald Trump compels the Justice Department, FBI and federal prosecutors to release later this month the vast troves of material they have amassed during investigations into Epstein that date back at least two decades.

Friday’s court ruling dealt with the earliest known federal inquiry.

In 2005, police in Palm Beach, Florida, where Epstein had a mansion, began interviewing teenage girls who told of being hired to give the financier sexualized massages. The FBI later joined the investigation.

Federal prosecutors in Florida prepared an indictment in 2007, but Epstein’s lawyers attacked the credibility of his accusers publicly while secretly negotiating a plea bargain that would let him avoid serious jail time.

In 2008, Epstein pleaded guilty to relatively minor state charges of soliciting prostitution from someone under age 18. He served most of his 18-month sentence in a work release program that let him spend his days in his office.

The U.S. attorney in Miami at the time, Alex Acosta, agreed not to prosecute Epstein on federal charges — a decision that outraged Epstein’s accusers. After the Miami Herald reexamined the unusual plea bargain in a series of stories in 2018, public outrage over Epstein’s light sentence led to Acosta’s resignation as Trump’s labor secretary.

A Justice Department report in 2020 found that Acosta exercised “poor judgment” in handling the investigation, but it also said he did not engage in professional misconduct.

A different federal prosecutor, in New York, brought a sex trafficking indictment against Epstein in 2019, mirroring some of the same allegations involving underage girls that had been the subject of the aborted investigation. Epstein killed himself while awaiting trial. His longtime confidant and ex-girlfriend, Ghislaine Maxwell, was then tried on similar charges, convicted and sentenced in 2022 to 20 years in prison.

Transcripts of the grand jury proceedings from the aborted federal case in Florida could shed more light on federal prosecutors’ decision not to go forward with it. Records related to state grand jury proceedings have already been made public.

When the documents will be released is unknown. The Justice Department asked the court to unseal them so they could be released with other records required to be disclosed under the Epstein Files Transparency Act. The Justice Department hasn’t set a timetable for when it plans to start releasing information, but the law set a deadline of Dec. 19.

The law also allows the Justice Department to withhold files that it says could jeopardize an active federal investigation. Files can also be withheld if they’re found to be classified or if they pertain to national defense or foreign policy.

One of the federal prosecutors on the Florida case did not answer a phone call Friday and the other declined to answer questions.

A judge had previously declined to release the grand jury records, citing the usual rules about grand jury secrecy, but Smith said the new federal law allowed public disclosure.

The Justice Department has separate requests pending for the release of grand jury records related to the sex trafficking cases against Epstein and Maxwell in New York. The judges in those matters have said they plan to rule expeditiously.

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Sisak reported from New York.



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Miss Universe co-owner gets bank accounts frozen as part of probe into drugs, fuel and arms trafficking

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Mexico’s anti-money laundering office has frozen the bank accounts of the Mexican co-owner of Miss Universe as part of an investigation into drugs, fuel and arms trafficking, an official said Friday.

The country’s Financial Intelligence Unit, which oversees the fight against money laundering, froze Mexican businessman Raúl Rocha Cantú’s bank accounts in Mexico, a federal official told The Associated Press on condition of anonymity because he was not authorized to comment on the investigation.

The action against Rocha Cantú adds to mounting controversies for the Miss Universe organization. Last week, a court in Thailand issued an arrest warrant for the Thai co-owner of the Miss Universe Organization in connection with a fraud case and this year’s competition — won by Miss Mexico Fatima Bosch — faced allegations of rigging.

The Miss Universe organization did not immediately respond to an email from The Associated Press seeking comment about the allegations against Rocha Cantú.

Mexico’s federal prosecutors said last week that Rocha Cantú has been under investigation since November 2024 for alleged organized crime activity, including drug and arms trafficking, as well as fuel theft. Last month, a federal judge issued 13 arrest warrants for some of those involved in the case, including the Mexican businessman, whose company Legacy Holding Group USA owns 50% of the Miss Universe shares.

The organization’s other 50% belongs to JKN Global Group Public Co. Ltd., a company owned by Jakkaphong “Anne” Jakrajutatip.

A Thai court last week issued an arrest warrant for Jakrajutatip who was released on bail in 2023 on the fraud case. She failed to appear as required in a Bangkok court on Nov. 25. Since she did not notify the court about her absence, she was deemed to be a flight risk, according to a statement from the Bangkok South District Court.

The court rescheduled her hearing for Dec. 26.

Rocha Cantú was also a part owner of the Casino Royale in the northern Mexican city of Monterrey, when it was attacked in 2011 by a group of gunmen who entered it, doused gasoline and set it on fire, killing 52 people.

Baltazar Saucedo Estrada, who was charged with planning the attack, was sentenced in July to 135 years in prison.



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Elon Musk’s X fined $140 million by EU for breaching digital regulations

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European Union regulators on Friday fined X, Elon Musk’s social media platform, 120 million euros ($140 million) for breaches of the bloc’s digital regulations, in a move that risks rekindling tensions with Washington over free speech.

The European Commission issued its decision following an investigation it opened two years ago into X under the 27-nation bloc’s Digital Services Act, also known as the DSA.

It’s the first time that the EU has issued a so-called non-compliance decision since rolling out the DSA. The sweeping rulebook requires platforms to take more responsibility for protecting European users and cleaning up harmful or illegal content and products on their sites, under threat of hefty fines.

The Commission, the bloc’s executive arm, said it was punishing X because of three different breaches of the DSA’s transparency requirements. The decision could rile President Donald Trump, whose administration has lashed out at digital regulations, complained that Brussels was targeting U.S. tech companies and vowed to retaliate.

U.S. Secretary of State Marco Rubio posted on his X account that the Commission’s fine was akin to an attack on the American people. Musk later agreed with Rubio’s sentiment.

“The European Commission’s $140 million fine isn’t just an attack on @X, it’s an attack on all American tech platforms and the American people by foreign governments,” Rubio wrote. “The days of censoring Americans online are over.”

Vice President JD Vance, posting on X ahead of the decision, accused the Commission of seeking to fine X “for not engaging in censorship.”

“The EU should be supporting free speech not attacking American companies over garbage,” he wrote.

Officials denied the rules were intended to muzzle Big Tech companies. The Commission is “not targeting anyone, not targeting any company, not targeting any jurisdictions based on their color or their country of origin,” spokesman Thomas Regnier told a regular briefing in Brussels. “Absolutely not. This is based on a process, democratic process.”

X did not respond immediately to an email request for comment.

EU regulators had already outlined their accusations in mid-2024 when they released preliminary findings of their investigation into X.

Regulators said X’s blue checkmarks broke the rules because on “deceptive design practices” and could expose users to scams and manipulation.

Before Musk acquired X, when it was previously known as Twitter, the checkmarks mirrored verification badges common on social media and were largely reserved for celebrities, politicians and other influential accounts, such as Beyonce, Pope Francis, writer Neil Gaiman and rapper Lil Nas X.

After he bought it in 2022, the site started issuing the badges to anyone who wanted to pay $8 per month.

That means X does not meaningfully verify who’s behind the account, “making it difficult for users to judge the authenticity of accounts and content they engage with,” the Commission said in its announcement.

X also fell short of the transparency requirements for its ad database, regulators said.

Platforms in the EU are required to provide a database of all the digital advertisements they have carried, with details such as who paid for them and the intended audience, to help researches detect scams, fake ads and coordinated influence campaigns. But X’s database, the Commission said, is undermined by design features and access barriers such as “excessive delays in processing.”

Regulators also said X also puts up “unnecessary barriers” for researchers trying to access public data, which stymies research into systemic risks that European users face.

“Deceiving users with blue checkmarks, obscuring information on ads and shutting out researchers have no place online in the EU. The DSA protects users,” Henna Virkkunen, the EU’s executive vice-president for tech sovereignty, security and democracy, said in a prepared statement.

The Commission also wrapped up a separate DSA case Friday involving TikTok’s ad database after the video-sharing platform promised to make changes to ensure full transparency.

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AP Writer Lorne Cook in Brussels contributed to this report.



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