Two Americans sentenced to prison for North Korean tech worker scheme

By Sean Lyngaas, CNN

(CNN) — Two Americans have been sentenced to years in prison for their roles in a covert scheme that defrauded major US companies while generating $5 million for the North Korean regime, the Justice Department said Wednesday.

Zhenxing “Danny” Wang, 39, and Kejia “Tony” Wang, 42, both of New Jersey, were alleged middlemen in an elaborate conspiracy that involved tricking Fortune 500 companies to hire overseas tech workers who stole the identities of various Americans. A federal court in Boston sentenced Zhenxing Wang to over seven years in prison and Kejia Wang to nine years in prison.

At the heart of the scheme were “laptop farms” — or clusters of US company-issued computers — that Wang and Wang allegedly managed from their homes in the US. Those laptops gave the overseas tech workers a foothold into major American companies to draw salaries and in one case steal export-controlled data from a California-based defense contractor.

Other companies who unwittingly paid the overseas tech workers include a semiconductor distributor in Massachusetts and a software development firm in California, according to prosecutors.

North Korea is increasingly turning to such schemes to circumvent sanctions and generate revenue for its nuclear weapons program, according to US officials. In 2024, prosecutors charged an Arizona woman in a similar scheme that compromised the identities of 60 Americans and affected 300 US companies, including a “premier” Silicon Valley tech firm.

The North Korean government has stolen billions of dollars in recent years by hacking cryptocurrency exchanges and using IT workers to infiltrate US tech firms, according to US officials and private experts.

The US government has tried to crack down on the schemes while publicly and privately warning companies across the country of the evolving threat from North Korean IT workers.

There’s still plenty of work to do: The State Department on Wednesday offered up to $5 million for information on several other people allegedly involved in generating revenue for the North Korean regime.

CNN has requested comment from attorneys who represented Wang and Wang. The pair previously pleaded guilty to charges related to the scheme.

The two men allegedly set up front companies in New Jersey to falsely claim that the tech workers were authorized to work in the US. Other members of the conspiracy allegedly used background-check firms to identify US persons whose identities they wanted to steal. At least 80 US persons had their identity stolen, according to prosecutors.

Networks of North Korean tech workers “increasingly rely on U.S.-based LLCs to create the appearance of legitimate employment,” said Michael Barnhart, a researcher at insider threat firm DTEX Systems.

“Pairing a US person, a US address, and a front company … the facilitators created the illusion of a legitimate domestic ‘effort’ allowing the IT workers to present themselves as U.S.-based without triggering suspicion during onboarding or daily workflows,” Barnhart told CNN, referring to the scheme connected to Wang and Wang.

“A growing number of staffing and recruiting agencies are unknowingly enabling this activity by vouching for these workers, claiming to have completed background checks and due diligence,” Barnhart said. He also warned that North Korean IT workers have embedded themselves at subcontractors “to reach larger targets” that contract with governments around the world.

The-CNN-Wire
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