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August 12, 2009 2:53 PM   Subscribe

North Korea’s Dollar Store - Office 39, North Korea’s billion-dollar crime syndicate, pays for Kim Jong Il’s missiles and cognac. Why did the Bush White House choose not to shut it down? [via]

Global Insurance Fraud By North Korea Outlined - WaPo
Time piece on Bureau 39

This is my first 100th post so please be gentle with me.
posted by Burhanistan (27 comments total) 11 users marked this as a favorite

 
The Americans need not fear the Chinese... This is what must be feared.
posted by Drasher at 3:06 PM on August 12, 2009


NPR had an interview with the author of The Art of Making Money which touched on this briefly.
posted by benzenedream at 3:19 PM on August 12, 2009


This is what must be feared.

Have you seen pictures of North Korea at night? There's nothing there. It might as well be a hole in the ocean.

Amateurs, the saying goes, study tactics. Professionals study logistics. North Korea doesn't have the resources to mount a credible threat against anybody they can't reach on foot.
posted by mhoye at 3:22 PM on August 12, 2009 [4 favorites]


What the hell? Companies are selling reinsurance to a North Korean state run enterprise?

First, what sort of idiot would engage in such a deal in the first place, especially if one of the terms is "being bound by North Korean law", when everyone knows that boils down to "whatever the Exalted Leader says it is"? Except that the money is going to NK, I'd say the insurance companies pretty much deserve to be taken to the cleaners for that right there.

But second, how is this not covered under existing UN sanctions and enforced boycotts of North Korea? I had thought pretty much all financial dealings with the North had been verboten since 2006, and at least in the US long before that. Were insurance deals for some reason exempt?

It doesn't seem like a very clever scheme, so I'm at a loss as to why so many people seem to have been taken by surprise. The insurance companies pretty much opened their wallets to the regime, and now they are surprised when they got filched.
posted by Kadin2048 at 3:25 PM on August 12, 2009


The Americans need not fear the Chinese... This is what must be feared.

Man up, buckaroo. Only thing to fear is fear itself, etc.
posted by mr_roboto at 3:32 PM on August 12, 2009 [1 favorite]


The quality of these “supernote” forgeries is so high that he’d managed to pass enormous quantities through the electronic detection devices with which every Vegas slot machine is supposed to be equipped.

That's a pretty attention-grabbing sentence. I mean, fooling governments is one thing, but if you can fool Vegas, you're really ahead of the pack.
posted by MoreForMad at 3:35 PM on August 12, 2009 [1 favorite]


Indeed, their quality is so superb that Bender suggests they aren’t made by North Korea at all, but somewhere in America by the C.I.A.—a claim for which there is no evidence.
Absence of evidence is not evidence of absence.
posted by mullingitover at 3:43 PM on August 12, 2009


“We see the shows, like Celine Dion: oh, her songs touch my heart."

This poor man is obviously insane. What have they done to him for it to have come to this?
posted by chillmost at 3:59 PM on August 12, 2009 [2 favorites]


I want to see that bureaucratic map of North Korea's government to see just how fucked up it is.
posted by kldickson at 4:01 PM on August 12, 2009


Supernotes are interesting! They are so perfect, there are rumors that the CIA is the only organization outside of the US Mint that could possibly print these notes. PN-14342 is the internal Secret Service number for these supernotes, and they are very, very good. I don't believe the CIA line, but the fact that the rumor exists at all should give credence to the fact that the people making these notes knew what they were doing.

I'm very curious as how the Secret Service, installing more sophisticated detection devices in slot machines, were able to catch these bills. Perhaps someone can comment on this, but my best guess is not that they could detect the bills were fake based on watermarks and other identifying characteristics, but most likely a flaw in the forging process itself that leads to a repeatable defect not show in the real currencies -- or more interesting, the real currencies contained a defect or quirk not shown in the fakes. In any case I really doubt a machine could detect this. I'm guessing at most the machine identified the serial number or line of bills being used by supernote counterfeiters and they profiled those using the bills.

It is funny that the VF article didn't mention this, but casinos, and LV in particular, has to be a great place to launder money. I'm sure the casino industry is very quick to work with law enforcement, but the amount of cash on any given casino floor is overwhelming. If you're not already being watched, there's no effective way for casinos to tell you apart from a midwestern dentist who likes to live it up once a year.
posted by geoff. at 4:29 PM on August 12, 2009


geoff.: It is funny that the VF article didn't mention this, but casinos, and LV in particular, has to be a great place to launder money.

It seems like you'd do much better away from LV, since the casinos there are probably some of the most professional in the world. I'd imagine the best would probably be a reservation casino out in the middle of nowhere with a middling amount of traffic - big enough that you could blow a bunch of money there without it being noticable, small enough to not have the best equipment or training, and disconnected enough from the casino industry that the best technology and expertise is unlikely to have filtered through.
posted by Mitrovarr at 4:47 PM on August 12, 2009 [1 favorite]


I remember reading a really compelling account of counterfeiting operations in North Korea a few years ago. Ah, Stephen Mihn in The New York Times, July 2006.
The counterfeiting of American currency by North Korea might seem, to some, to be a minor provocation by that country’s standards. North Korea, after all, has exported missile technology in blatant disregard of international norms; engaged in a decades-long campaign of kidnapping citizens of other countries; abandoned pledges not to pursue nuclear weapons; and most recently, on July 4, launched ballistic missiles in defiance of warnings from several countries, including the United States.

But several current and former Bush administration officials whom I spoke with several months ago maintain that the counterfeiting is in important ways a comparable outrage. Michael Green, a former point man for Asia on the National Security Council, told me that in the past, counterfeiting has been seen as an “act of war.” A current senior administration official, who was granted anonymity because of the sensitivity of relations between the United States and North Korea, agreed that the counterfeiting could be construed by some as a hostile act against another nation under international law and added that the counterfeits, by creating mistrust in the American currency, posed a “threat to the American people.”
posted by cgc373 at 4:50 PM on August 12, 2009


When I read the headline I thought it would be a story of, like, North Korean Dollar Stores. Places where North Korean grandmothers bought cheap plastic crap and Mexican votive candles.

Never mind.
posted by festivemanb at 4:53 PM on August 12, 2009 [2 favorites]


It was the South Korean movie star Choe Eun Hee, kidnapped on the orders of Kim Jong Il in 1978 and forced to spend nine years making propaganda films, who first reported after her escape that Kim Jong Il is a cinéaste, with a fondness for James Bond movies. Should Kim decide to produce a homegrown spin-off, his screenwriters might well find suitable material in the quadrangular building in the leafy Central Committee precinct of downtown Pyongyang that houses Office 39.

As the author of a Salon.com piece on Choe Eun Hee and her husband, film director Shin Sang-Ok, let me just say that...yes, the screenplay I've written about it does spend a lot of time at Office 39.
posted by johngoren at 4:55 PM on August 12, 2009 [3 favorites]


What the hell? Companies are selling reinsurance to a North Korean state run enterprise?

If I've learned one thing over the past year, it's that insurance companies operate precisely where stupidity, insanity, and hubris meet a total lack of morals in the Venn Diagram of bad business practices.

If I learned tomorrow that AIG or UHC had some sort of program that only made money by selling mashed-up babies directly to Satan, I'm not sure I would even blink.
posted by Copronymus at 5:02 PM on August 12, 2009 [3 favorites]


North Korea doesn't have the resources to mount a credible threat against anybody they can't reach on foot.

If that were true, no leaders would embarrass themselves pussyfooting around NK to the extent that they do.
posted by Blazecock Pileon at 5:28 PM on August 12, 2009


If that were true, no leaders would embarrass themselves pussyfooting around NK to the extent that they do.

I think this pussyfooting is straight-up humanitarianism. Even if he's not a credible threat to South Korea the country, there's a lot of civilians in Seoul. Hell, there's a lot of civilians in _North Korea_. That's why countries agree to trade things like heating oil with them, in exchange for promises of nuclear disarmament. Negotiations with North Korea aren't military or political negotiations - they're de-facto hostage negotiations.
posted by mhoye at 5:45 PM on August 12, 2009 [1 favorite]


Negotiations with North Korea aren't military or political negotiations - they're de-facto hostage negotiations.

Most hostage negotiations involve getting hostages in return for favors. It doesn't seem like NK operates in good faith when it keeps ratcheting up tensions, after being granted concessions.

I'm curious about the CIA angle around Supernotes (and drug trafficking). Why keep the criminal indictments sealed? Why allow NK to keep doing business through front banks? There's so much investigative work already done — why not follow through on it?

It's like The Wire: follow the money and it will take you everywhere. Given the billions of counterfeit money, I'm wondering if there's a lot more corruption and dirty laundry being covered up on behalf of a lot of people, not necessarily all North Koreans.
posted by Blazecock Pileon at 5:54 PM on August 12, 2009


I read a New Yorker piece on supernotes a some months ago that noted that NK had purchased a fancy intaglio press from the same Swiss company that supplies the US Mint--ostensibly for printing NK notes. And that North Korea's official currency uses colors that are just a few shades off of US colors...
posted by meta_eli at 6:08 PM on August 12, 2009


When I read the headline I thought it would be a story of, like, North Korean Dollar Stores. Places where North Korean grandmothers bought cheap plastic crap and Mexican votive candles.

I had the exact same impression as well, but then I thought that a dollar store might be more like a regular department store there, when you consider the NK per capita income.

But then, while looking for numbers online, I happened to stumble upon this recent story that leads me to think that its not their currency being devalued that's at issue, but it's that these people just don't make enough money!
posted by shoebox at 6:09 PM on August 12, 2009


geoff: The Vanity Fair article mentions that there are flaws in the supernotes, but that they are likely intentional flaws, placed by the sellers to keep their customers from just turning them around and buying more supernotes using the supernotes they just bought.
posted by ErWenn at 6:21 PM on August 12, 2009 [1 favorite]


Why allow NK to keep doing business through front banks? There's so much investigative work already done — why not follow through on it?

That's one of the big things that bugs me about all this also. It really seems like, in addition to feathering their own nests, the dirty dealings of the NK elite are a vital part of the international underground ecosystem and people with their hands in the pot intersect with more legitimate government and transnational interests quite frequently. It's very frustrated to have such bald reminders of how truly warped things can be.
posted by Burhanistan at 7:39 PM on August 12, 2009


Supernotes are interesting! They are so perfect, there are rumors that the CIA is the only organization outside of the US Mint that could possibly print these notes.

I can't see any reason to not believe the CIA uses the US Mint. They need money for their arms and drugs deals. Might as well use Supernotes.
posted by five fresh fish at 7:49 PM on August 12, 2009


Blazecock Pileon: Most hostage negotiations involve getting hostages in return for favors. It doesn't seem like NK operates in good faith when it keeps ratcheting up tensions, after being granted concessions.
[...]
Given the billions of counterfeit money, I'm wondering if there's a lot more corruption and dirty laundry being covered up on behalf of a lot of people, not necessarily all North Koreans.
Burhanistan: dirty dealings of the NK elite are a vital part of the international underground ecosystem and people with their hands in the pot intersect with more legitimate government and transnational interests quite frequently
That was my exact thought in reading this article: that part of the reason this isn't stopped is because there are other people doing similar things or benefiting tremendously... and they aren't remotely North Korean. It seems like on the surface, this should be easy to stop, and that Illicit Activities operation was ready to do just that, on a serious scale. On the surface, these things seem patently simple: the Pacific Rim is imperiled by NK's existence as a despot-run hell hole, and millions of North and South Koreans struggle with its impact. It seems inhumane to not be doing our damndest to eliminate Kim Jong-Il, starting with all of his monetary ties to the outside world.

Indeed, the notion that the Bush administration actually had a reasonable enough excuse to back off the investigation for disarmament talks surprised me; I fully expected the kind of "the Bush administration backed off unexpectedly, though no reason was ever provided" story that implies Bush or Sr. or friends were actually involved with these criminals. Imaging my surprise when the article didn't say that.

Doesn't mean that's not the case either, though. It hardly beggars belief that a powerful American family could get deeply involved with some seriously fucked up criminals on the world stage.
posted by hincandenza at 8:33 PM on August 12, 2009


As an outsider, it has always seemed odd to me that the US continues to use such outdated methods to produce its currency. I mean seriously, all the notes are green, the same size, and printed on paper?

If the USA wanted to eliminate Supernotes, they could be doing a shed-load more than they are doing.

(Also: wasn't it just a few years back that the story was that Supernotes were produced in Syria? I gather Emmanuel Goldstein has the plates....)
posted by pompomtom at 9:01 PM on August 12, 2009 [1 favorite]


I'm very curious as how the Secret Service, installing more sophisticated detection devices in slot machines, were able to catch these bills.

There are literally dozens of features in US notes intended to make counterfeits detectable. Some were introduced intentionally, some were accidental, but preserved because they were detectable. For instance, the black ink used to print notes in the early 20th century happened to have a slight iron content which gave the notes a magnetic signature. That quality was written into the specification for the ink. The government has machines that scan piles of cash at high speed, passing them by an array of modular detectors, each detector designed to find one quality of genuine money. A bill that's missing one gets kicked out. Probably the modules were adapted to LV slots.
posted by Kirth Gerson at 4:14 AM on August 13, 2009


pompomtom: If the USA wanted to eliminate Supernotes, they could be doing a shed-load more than they are doing.
I think you're talking sense, but that perhaps you underestimate the rabid, petty, senseless conservatism of the American people.

Some years ago, when the (relatively) new 2004-series US$20 was new, I watched a man ahead of me on line at the bank scream at the bank teller when she tried to give him his withdrawal in then-new $20s. He would not accept the new notes as legal tender. She dug through her cash drawer and scrounged enough of the old bills to cover his transaction, and he left, still railing against the change, to no one in particular.

Some years later, the US$1 coin debuted. Somehow (I don't remember) I wound up with several tens of them, which I proceeded to spend like cash rather than collectibles. One cashier at a store openly yelled at me: "I hate these damn things!" I owed a co-worker $3 or so; I paid him with three coins, but he laughed and asked "What the heck am I supposed to do with those?" He joked about confounding his teenage children with them next time they asked him for money.

I think we Americans, on the whole, only enjoy trivial novelty. Novelty associated with matters of importance (money, health-care) or novelty that actually starts to change the world (text messages, the internet) is viewed with suspicion, on principle.
posted by Western Infidels at 2:47 PM on August 13, 2009


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