Arizona Woman Faces Nine-Year Sentence For $17.1 Million North Korean IT Scheme

An Arizona woman, Christina Chapman, is set to face sentencing next week for her involvement in a scheme that facilitated North Korean IT workers in obtaining remote jobs at American companies. The scheme, which involved 309 companies, generated $17.1 million in compensation that was sent to North Korea. Chapman pleaded guilty to conspiracy charges in February, and prosecutors have recommended a nine-year prison sentence for her role in the scheme.

Chapman's case is significant as it marks one of the largest worker fraud schemes ever charged by the Department of Justice. The scheme involved North Korean IT workers using fake, stolen, or borrowed identities to secure jobs at U.S. companies. These workers, based in North Korea or other locations such as China, Russia, or the UAE, used AI to manage multiple personas and obtain legitimate jobs. The U.S. has maintained sanctions on North Korea since 2016, banning the regime from the U.S. financial system and curtailing all business between U.S. people and companies with North Korea.

According to court documents, Chapman aided the IT workers for three years, helping them verify stolen identities, install software, and log in remotely. She kept the laptops organized and safe at her home to make it appear as though the North Korean workers were located in the U.S. Authorities found an elaborate staging area with 90 laptops in her home, each labeled with notes identifying the associated company and the corresponding stolen identity. Chapman also shipped packages and hardware to various locations, including China, Pakistan, the UAE, and Nigeria, and helped the workers cash their checks by depositing the money in her bank account before transferring it to them.

Prosecutors have emphasized the need for a significant sentence to deter future facilitators and send a message to Pyongyang. They noted that even though Chapman claimed to be unaware of the involvement of a sanctioned nation, the victim impact is significant. Some 68 U.S. citizens had their identities stolen, and 309 U.S. businesses plus two multinationals were defrauded. The impact on businesses has been huge, with companies having to conduct internal and costly security reviews and some having their data stolen.

Chapman's sentencing will take place on July 24 in Arizona. The federal push for a significant sentence is not just about individual punishment but also a strategic move to set a precedent. This prosecution aims to draw a line, deterring future U.S. facilitators and sending a message to Pyongyang about the gravity of aiding a sanctioned regime.