- The Washington Times - Monday, May 24, 2010

A group of offspring of senior North Korean communist and military leaders, including Kim Jong-il’s sons, have been linked by Western intelligence authorities to Pyongyang’s illicit activities around the world, including distribution of counterfeit $100 bills and drug trafficking.

The unofficial group, known as “Ponghwajo” (“Torch Group”), is led by Oh Se-wan, the son of a senior leader in North Korea’s National Defense Commission. That senior leader, Gen. Oh Kuk-ryol, is also a key player in the succession of North Korean leader Kim Jong-il to his son Kim Jong-un.

The group, which operated internationally and inside North Korea until at least 2005, was disclosed as the United States, South Korea and other nations are set to step up pressure on the North after an international investigation made public on Friday revealed that a North Korean torpedo fired from a submarine sank the South Korean warship Cheonan, killing 46 sailors.

A Treasury Department official involved in monitoring and countering North Korean illicit activities for the past five years said, “We have had concerns about the North Korean involvement in a wide range of illicit activities, including counterfeiting and drug trafficking.”

“We continue to have concerns about North Korean counterfeiting, both manufacturing and distributing counterfeit $100 notes,” the official said, noting that North Koreans are continuing to use international financial institutions as part of the criminal activities.

Asked whether additional financial restraints could be imposed on North Korea in the aftermath of the international findings of the probe into the Cheonan sinking, the official said additional measures continue to be reviewed.

The North Korean Torch Group was described by officials as similar to China’s “princelings,” the sons and daughters of Chinese Communist Party and military leaders who have amassed fortunes through businesses and their family connections within the ruling Communist Party system.

Kim Kwang-jin, a former North Korean official who was involved in Pyongyang’s state-run insurance fraud to earn hard currency, said he was not familiar with the Torch Group. However, he said its existence “is very likely since there were several cases similar, including some officials who were running their small groups with different code names like the Mokran group.” The groups would seek to emulate Kim Jong-il’s lifestyle, which included parties and sex orgies.

Oh Se-won, 39, was first identified several years ago by U.S. intelligence after investigators linked him to counterfeit bills found in Las Vegas in 2004 and to the drug-trafficking case of the North Korean ship Pung Su, which was seized by Australian authorities in April 2003 and found with 330 pounds of heroin on board.

The Washington Times first reported in June 2009 that Gen. Oh Kuk-ryol, Oh Se-wan’s father, was in charge of producing supernotes.

A spokesman for the North Korean mission to the United Nations could not be reached for comment. However, Sin Son Ho, an official at the North Korean mission, has said his government has rejected all charges of counterfeiting.

In addition to Oh Se-won, officials identified other Torch Group members as:

• Kim Chol-un, son of Kim Chung-il, who is a close aide to Kim Jong-il within the secretarial office. His current title is chief of the office of secretaries, and he is deputy director of Kim Jong-ils personal secretariat and a member of the Korean Workers’ Party central committee.

• Kang Tae-seung, son of Kang Sok-ju, a first vice foreign minister and key figure in North Korean diplomacy who recently traveled to China with Kim Jong-il.

• Kim Chang-hyok, son of Kim Chang-sop, deputy director of the State Security Department.

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