DOJ Indicts 14 in North Korean IT Worker Scheme and Raids More Than 40 Texas 'Laptop Farms' as FBI Warns Contractors

The Justice Department announced on 13 October a new crackdown on North Korean IT workers who get remote jobs at US companies under false identities and send their pay to Pyongyang’s weapons programmes.

A federal grand jury in the Northern District of Ohio indicted 14 people. Two US-based facilitators were arrested, named by the department as Bostelle and Pena Carrillo. According to the indictment, the scheme placed workers at more than 70 US companies and earned about $3 million.

Operation Lonestar Roundup

In Texas, the FBI searched more than 40 homes in what it called Operation Lonestar Roundup and seized 187 devices. The homes are alleged “laptop farms,” where US residents host company-issued laptops so that North Korean workers abroad can log in remotely and appear to be working from inside the US. The FBI issued a public service announcement, PSA261013, with warning signs for employers, including refusal to appear on camera, mismatched identity documents and requests to ship equipment to a different address.

Federal contractors

The department said some of the workers were placed at companies that hold federal contracts, though it didn’t name agencies or say whether any worker accessed government systems. Earlier cases have found North Korean workers at defence contractors and firms with access to export-controlled technology. Contractors are responsible for vetting their own staff, and the government has no single check for remote workers at contractors.

Why it matters

The United Nations and US officials estimate North Korea’s IT worker programme earns hundreds of millions of dollars a year, money that funds missiles and nuclear weapons. Each US case so far has involved US residents running the laptops. The federal contractor angle raises a procurement question for the Pentagon and GSA: whether to require identity checks on remote staff at contractors, as some agencies have begun to do for their own hires. The FBI’s tools against hacking groups, including recent seizures from Chinese state hackers covered in our earlier post, are being turned more often on the hiring pipeline.