At the Beijing talks in February this year, the Bush administration reversed its North Korea policy, opting for a comprehensive deal — denuclearization and normalization, over confrontation and regime change. However, implementation of the new policy has proved difficult. The Administration remains divided. While the State Department pursues its normalization agenda, Treasury (and the Vice-President) cling to the former policy and appeal to the national security provisions of the Patriot Act. The campaign launched late in 2005 to insist that North Korea is unworthy and unreliable, in effect no more than a criminal gang, is not easily set aside.
Because North Korea has no friends and no advocates, least of all in the United States, the case against it as a “soprano” or criminal regime has rarely been scrutinized. (For a brief outline, see Gavan McCormack, “Criminal States: Soprano vs. Baritone — North Korea and the United States.”)
In the following multi-part series, Tokyo-based analyst John McGlynn scrutinizes the case so far as can be known from publicly available materials. In part one, below, he addresses the allegation of North Korean cooperation with Irish terrorism in the global distribution of US “Supernotes.” In subsequent parts, to follow, he deals with the US Treasury’s campaign to strangle North Korea financially based on allegations of counterfeiting and money-laundering against a small Macao Bank, Banco Delta Asia. (Japan Focus)
North Korean Supernotes, the US, and the Irish Connection — All Blarney?
On October 7, 2005 Sean Garland, 71 years old, was arrested in Northern Ireland under a warrant requested by the United States Attorney for the District of Columbia. Garland and six other conspirators were charged with “a years-long scheme to obtain, transport, sell, and pass as genuine, highly deceptive” counterfeit $100 Supernotes, according to a press release issued by the US Attorney’s office.
Garland’s arrest was based on an indictment  returned by a federal grand jury on May 19, 2005.
“Quantities of the supernote were manufactured in, and under auspices of the government of, the Democratic People’s Republic of Korea (North Korea),” the indictment reads. “Individuals, including North Korean nationals acting as ostensible government officials, engaged in the worldwide transportation, delivery, and sale of quantities of supernotes.”
David Asher, the former Coordinator for the North Korea Working Group in the U.S. State Department (now with the Heritage Foundation), describes the Sean Garland counterfeiting indictment as evidence of a hostile act by North Korea against the United States. “Under International Law,” says Asher, “counterfeiting another nation’s currency is an act of casus belli, an act of economic war. No other government has engaged in this act against another government since the Nazis under Hitler. Korea has been counterfeiting the dollar and other currencies of importance the entire time it has been on the international engagement bandwagon. What does this say about the regime’s intentions?” Irrespective of the casus belli claim, international law is clear that evidence of such accusations would have to be presented before the United Nations before any retaliatory action — especially military — could be justified.
It is of course possible that North Korea might have used Garland as a vehicle for the distribution of counterfeit US notes, but the point is that, based on the public documentation (namely, the indictment), the accusation is unproven.
Who is Sean Garland? According to the December 13, 2005 Los Angeles Times, Garland was
“chief of staff of the Official Irish Republican Army, or Old IRA, after it split with other IRA factions in 1969 and became the most left-leaning. He also heads its political wing, the Irish Workers’ Party, in Northern Ireland. In that capacity, Garland traveled extensively to see Socialist and Communist party leaders in the Soviet bloc and, authorities contend, North Korea.”
The US Attorney’s indictment accuses Garland of using “his official capacities with the WP [Irish Worker’s Party] and GKG Comms [GKG Communications International, Ltd. located in Dublin, Ireland and identified elsewhere in the indictment as an “international business consulting company”] — and particularly those entities’ international associations and activities — as vehicles for traveling abroad (that is, outside of Ireland) and for communicating and meeting with persons abroad — including North Korean nationals engaged in the transportation and sale of Supernotes — and for arranging for the purchase, transportation, and resale of Supernotes” in quantities up to $1 million during the 1990s.
The indictment states that from 1997 to 2000 the “Sean Garland Supernote organization” bought, sold and circulated the counterfeit notes in Russia, Belarus, Poland, Denmark, the Czech Republic and Germany. North Korea is identified as the source of the Supernotes but the indictment alleges that, as a security measure, Garland tricked the other conspirators into believing that the source was Russia. The indictment also goes into some detail about travel by the conspirators between England and Ireland to transport the fake notes and real money payments.
Three years before the US indictment of Garland made news, extensive detective work by British authorities had already led to the arrests of three individuals — David Levin, Mark Adderley and Terence Silcock — who were named in the indictment as Garland’s co-conspirators. In July 2002 The Guardian reported that the three were jailed for a total of 19 years.
The three were described as belonging to a counterfeit ring British authorities believed was “the largest of its kind in their country’s history.” “But,” the Times notes with interest, “Garland wasn’t arrested or charged until British authorities, acting on a U.S. warrant, took the 71-year-old into custody Oct. 7  in a hotel in Belfast, Northern Ireland.”
Garland was at the time participating openly in political activities in British-controlled Northern Ireland as a prominent leader of the Irish Workers’ Party, so that, if he was a suspect in a major international criminal operation, the UK authorities could easily have taken him into custody. Yet he remained untouched by British law for more than three years after the jailing of several of his alleged co-conspirators.
After receiving bail, Garland decided to reject participation in legal proceedings concerning the US warrant, instead traveling across the border to the Republic of Ireland, where he apparently lives today. But US authorities apparently have not given up their pursuit. The March 27, 2006 Financial Times reports a US State Department official as saying “that Washington planned to formally ask Ireland to extradite Mr. Garland, although the official declined to comment on the timing.” This report added, however, that it was unable to get a statement from the US attorney for Washington DC and the US Justice Department. Late April 2007 emails sent by this author in an attempt to obtain information about the status of extradition proceedings went unanswered by the US Attorney for DC and Ireland’s National Police Service (the Garda).
Garland himself has criticized the legal circumstances of the arrest warrant issued under the indictment. A website campaigning to prevent Garland’s extradition to the United States has posted a November 2005 letter Garland is supposed to have written to the Irish Times in which he states: “I am quite prepared to face any allegations in an open and fair court. Under the UK-US Extradition Treaty Act of 2003 there is no possibility of this.”
Apparently Garland was not alone in finding reason to worry about the legal circumstances surrounding his arrest. The BBC reports that on July 12, 2006 MPs in Britain’s House of Commons voted 246 to four “to adjourn the Commons early in symbolic protest at the government’s extradition arrangements” for three British bankers wanted by the United States for fraud in connection with the Enron bankruptcy and to demonstrate their anger at Prime Minister Tony Blair. “Liberal Democrat Nick Clegg told MPs Mr. Blair had ‘short-changed’ the UK by signing a ‘lopsided’ extradition agreement,” said the BBC. Garland was no banker, but he is entitled to the same legal protection.
The reason for the MPs’ dislike of the extradition treaty was captured in this editorial in the British daily The Independent: “Under the present state of affairs the US does not have to provide prima facie evidence when requesting the extradition of people from the UK. But the UK does have to show ‘probable cause’ when seeking the extradition of American citizens. To make matters worse, the new law was introduced here, under the Royal Prerogative, by a statutory instrument signed by the then Home Secretary, David Blunkett, without any parliamentary vote or even debate.” Though Garland appears to be a citizen of the Republic of Ireland, his arrest took place in British-controlled Northern Ireland and the US warrant for his arrest was processed under UK law.
More to the point of the counterfeiting-related charges, however, the website campaigning against Garland’s extradition also posted an earlier letter by Garland to the Irish Times, which in part reads: “No evidence is offered of any crime or wrongdoing and it is very much designed to create a climate which will, to say the least, blacken my name in the public mind. The media are playing a part in this process and the use of North Korean poster on your Agenda page is designed to bolster up the image of North Korea and Sean Garland as put forward by the United States.”
Until Sean Garland someday stands trial in a U.S. courtroom there will be no opportunity for the public to examine the evidence for the existence of a North Korean Supernote counterfeiting operation and its links to a criminal gang directed by him. When asked by email how the US Attorney for DC knows that North Korea passed Supernotes to Sean Garland or his operatives, a spokesperson replied: “The indictment speaks for itself and as with all cases pending before the court, we are precluded from commenting any further at this time.”
For now the only publicly available evidence appears to be the incriminating assertions contained in the indictment. However, even on the most generous reading of the indictment, the evidence is circumstantial, as the following analysis makes clear:
(1) No North Korean individual, business or government organization is charged or even identified in the indictment. Nothing can be concluded from the statements about meetings or discussions with unidentified North Koreans, such as: “On or about June 25, 1999, defendant Sean Garland met in Moscow, Russia, with North Korean nationals.”
(2) Neither Garland nor any of the other conspirators are ever described as having actually received Supernotes from any North Korean representative. The strongest statements in the indictment linking North Korea and Garland to counterfeiting activities are “In or about October 1997, defendant Sean Garland and ‘J.M.’ traveled to Warsaw, Poland, where defendant Sean Garland met with North Korean nationals to arrange for the purchase of a quantity of Supernotes” and “Defendant Sean Garland met with North Korean nationals to arrange for Supernote transactions, including transactions involving the new ‘big head’ Supernotes.” (Footnote 17 explains “big head” and “small head” supernotes.) In either case it appears that there was no actual transaction between Garland and any North Korean.
(3) The indictment alleges that, as a security measure, only Garland and his closest associates knew North Korea was the “true source” of the Supernotes. But none of the close Garland associates who had that knowledge are named. Unless Garland is arrested again and questioned in court it is unclear who else can confirm North Korea as the source of fake notes.
(4) With one possible exception, Garland is never described as actually having handled Supernotes. In fact, the indictment states that he used his “close associates, including Christopher John Corcoran, to make and maintain contact” with low-level conspirators and fake note buyers. The exception is: “When the ‘big head’ Supernotes became available, conspirators who held ‘small head’ Supernotes, including defendant Sean Garland, sought to dispose of their remaining ‘small head’ Supernotes before selling ‘big head’ Supernotes.” It is unclear whether “sought to dispose” means Garland directly did dispose of unwanted older version Supernotes.
(5) The following passage is the indictment’s clearest description of the running of counterfeiting operations, but there is no mention of Garland:
“The conspirators would and did use the following manner and means, among others, to accomplish the objects of the conspiracy:
([Subparagraph] g) Defendants Christopher John Corcoran, Terence Silcock and Mark Adderley identified and solicited defendant David Levin as a person who would buy and arrange for transport of quantities of Supernotes, and maintained contact with him and his associates for the purpose of arranging Supernote transactions. In order to buy and transport Supernotes, defendant David Levin obtained funds and couriers from and through an associate in Latvia, ‘H.J.’”
(6) Sean Garland’s criminal actions, as described in the May 2005 indictment, end in July 2000. Thus the US Attorney had nearly five years to confirm a connection between Garland and North Korea. But it identifies no North Korean person or entity. Moreover, in December 2005 the Los Angeles Times reported: “Channing Phillips, a spokesman for the U.S. attorney’s office in Washington, would not comment on why authorities waited until this year to obtain a grand jury indictment, which alleges criminal acts only through mid-2000. He also would not say whether other suspects from North Korea or elsewhere had been identified or charged under seal.”
Christopher John Corcoran is described in the indictment as a longtime associate of Garland and an intermediary between Garland and the other conspirators. He is said to have “identified and solicited two potential buyers of quantities of Supernotes, and maintained contact with them for the purpose of arranging Supernote transactions,” and to have conveyed real money payments for Supernotes to Garland. He would seem to have been in a position to know more than anyone else about Garland’s alleged connections to counterfeiting.
As The Guardian reported five years ago, Terence Silcock, David Levin and Mark Adderley, all of whom are also mentioned in the indictment and are still wanted by the US Attorney for DC, were sent to jail in the UK in July 2002. What, however, has become of Corcoran is unclear. In May 2005 a British High Court denied a Corcoran application to have counterfeiting-related legal proceedings against him terminated. That application made no mention of Sean Garland or North Korea. A late April email sent to the UK’s Crown Prosecution Service inquiring into Corcoran’s current legal status met with a suggestion to contact the British Home Secretary.
For the record, in one of his reported letters to the Irish Times Garland wrote: “I have no associate named Corcoran nor have I any associates in jail in Britain.”
The BBC Documentary “The Superdollar Plot”
In October 1998, a British petty criminal walked into a Bureau de Change in Stafford, England to change some US $100 bills. “His transaction,” explains the BBC, “resulted in a huge undercover police operation, as a team of detectives crossed the globe on the trail of a shadowy and sophisticated counterfeiting cartel.” The $100 bills were later discovered to be “superdollars,” “[b]elieved to be printed on an industrial scale in the isolated state of North Korea” and “the currency of choice for the criminal elite who are granted access to them.”
On June 20, 2004 British TV broadcast a documentary about this case produced by the BBC current affairs program Panorama and titled “The Superdollar Plot.” The information in the documentary mainly came from Russian, British and US authorities. Two anonymous North Korean defectors were also interviewed. Dramatic recreations were used to describe particular events.
“Superdollar Plot” describes the operations of the “Birmingham gang”, a counterfeiting ring working mainly out of Birmingham, supposedly led by Sean Garland and supplied with fake notes produced by North Korea. The documentary refers to “statements obtained by the BBC [that] confirm that the conspiracy involved the North Korean Embassy in Moscow and ex-KGB agents in Russia.” These statements “say that the operation was run by Sean Garland” but that, for reasons unexplained, “[n]one of this evidence discovered by Panorama was available to the courts” in Britain. In the trial of several members of the Birmingham gang, courts relied only on evidence gathered by British police.
According to the documentary, Sean Garland was “never arrested or even questioned in relation to the investigation.” No explanation is offered for the apparent lack of interest on the part of British police. On the other hand, the Panorama team states that it “learnt that for several years authorities in Washington have believed Sean Garland to be a major player in the superdollar network.” It learned of Washington’s interest from Bill Gertz, the “national security” correspondent for the Washington Times, a rightwing American newspaper controlled by the Rev. Sun Myung Moon’s Unification Church. Somehow Gertz is said to have come into possession of a “classified intelligence report” that mentions Garland.
“Superdollar Plot” is sometimes cited as convincing evidence of the North Korean regime’s involvement in counterfeiting and its willingness to associate with those in the criminal underworld. The documentary presents a variety of incriminating allegations, some of which were reviewed by British courts as part of the evidence leading to the conviction and jailing of several members of the Birmingham gang. But the documentary fails to prove two of its central allegations: first, that Sean Garland was directly involved in currency counterfeiting operations; and second, that North Korea supplied him, or the Birmingham Gang he supposedly led, with fake currency (in particular, $100 bills).
1. Sean Garland and counterfeiting
According to both the documentary and the U.S. Attorney’s indictment, Moscow was the main source of supply of fake notes. Panorama claims to have obtained copies of Moscow hotel receipts listing records of phone calls that show that on several occasions Garland and Birmingham gang member Terence Silcock (along with associates) were in Moscow together staying at separate hotels and communicating by phone. However, Panorama interviewed Vladimir Uskov, head of an “elite team of Russian police” which had run surveillance on Garland and Terence Silcock. When asked, “Was there any link between Sean Garland and Terence Silcock in Moscow?” he answered, “No.”
If any police agency knew what Garland was up to in Moscow it would presumably be this Russian unit. But while Uskov was able to tell Panorama about tips and suspicious phone calls (though not, apparently, the content of those calls), he apparently had nothing to say on the subject of any actual evidence linking Garland to handling or making arrangements for others to handle phony money.
The “Superdollar Plot” reconstructs one surreptitious Moscow-based exchange of fake money in which events quickly turn to farce. The only people involved in the exchange are an undercover British police detective and a “beautiful Russian lady carrying a package” who receives a last-minute phone call to abort her drop-off. Later, the undercover police detective gets a message to pick up a package from a left luggage office in a Moscow train station and the recovered package contains $70,000. Tested, the money, we are told, turned out to be “another consignment of North Korean superdollars.” Neither Sean Garland, nor members of the Birmingham gang, nor any North Koreans, nor any “beautiful Russian lady” seem to have been at the scene of this crime.
Panorama also reports:
“We discovered that Sean Garland has a longstanding relationship with the North Korean Embassy in Moscow. Panorama has obtained these faxes written by him to officials at the Embassy. The faxes discuss an apparently legitimate trade relationship between Sean Garland and officials there that has existed for several years.”
Despite the hint of something sinister, an existing “longstanding relationship” is not particularly surprising since Garland was a “revolutionary socialist” who “spent the 1980s forging links with Communist regimes around the world and was, as of the documentary’s June 2004 broadcast, President of the Workers’ Party in Ireland, the political wing of the official IRA. However abhorrent Garland’s political beliefs or his involvement in Irish terrorist plots, networking with communists and socialists around the world and “apparently legitimate trade relationship[s]” were scarcely criminal in themselves.
Panorama reveals that it obtained signed statements from former official IRA members which detail how millions of superdollars have passed unnoticed into circulation throughout the UK and Ireland, showing how “what began as a revolutionary conspiracy against capitalism has now turned into a licence to print money for a criminal elite.” The operation was, according to these statements, “run by Sean Garland.” Curiously, however, “[n]one of this evidence discovered by Panorama was available to the courts.” Yet the very first words of Panorama’s June 2004 documentary are: “For over a decade police forces across the world have been hunting a criminal cartel with a licence to print money.” The question the documentary does not ask is why the British police were apparently unable to match Panorama’s success in extracting information from former IRA members that might have been useful to a prosecution.
Despite the signed statements, it is not immediately clear how “millions of superdollars” could have entered into circulation in the UK and Ireland. If Panorama’s recreated drop of $70,000 in “superdollars” represents something of an average value for a single drop, that means as little as $2 million in fraudulent $100 notes would have required about 28 drops. If “millions” means $20 million, the number of drops comes to 280. For a counterfeiting ring known to consist of three or four principal members plus some “associates” (for perhaps a total of 10 criminals), a total fake-note value of $20 million in circulation based on drops that may have been spread over 3-4 years or longer would have required some well coordinated legwork and an ability to regularly outfox customs officials in Britain, Ireland and possibly elsewhere. If only a total value of $2 million over 3-4 years, one has to wonder where the profit is in this for a fairly sophisticated 10-person criminal gang.
If “millions of superdollars” refers to fake money that was still in circulation in Ireland and the UK as of Panorama’s June 2004 broadcast, that amount seems overly high for two reasons. First, it is not clear why this money was able to stay in circulation when cash transactions in Ireland or Britain would have been based on native currencies. Second, at some point US paper currency circulating overseas is scooped up and passed through a U.S. bank, which provides opportunities to identify counterfeits using sophisticated detection technology. But according to the September 2006 The Use and Counterfeiting of United States Currency Abroad report jointly prepared by three US government agencies (Treasury, Secret Service and the Federal Reserve), fake note ($100 and other denominations) seizures in England (no data for Ireland exists) only amounted to $141,000 in FY 2000 and $3.5mn in FY 2002 (zero in FY 2001, 2004, and 2005). That same report states that counterfeits found (not seized) in England and turned over to Secret Service in any of these years ranged from zero to a few hundred thousand dollars.
2. North Korea and Sean Garland
Panorama reports that it spoke with an anonymous senior North Korean defector who confirmed that the North Korean embassy in Moscow “was a centre for the distribution of superdollars.” A second anonymous North Korea defector, a former diplomat, who was also interviewed said: “Ordinary North Korean people can’t go abroad. The only people who can deal in [superdollars] are diplomatic or business travellers. That’s how the counterfeit is exchanged abroad.” The diplomat also said that North Korean officials are often not told whether the foreign money they are receiving from their government is counterfeit or not.
The truth of this is impossible to assess but the “Superdollar Plot” relies on charges others have made of the North Korean regime’s criminality, weak circumstantial evidence, unproven allegations, and interviews with two anonymous North Korean defectors.
Second, even if the North Koreans were engaged in a Moscow-based counterfeiting conspiracy, evidence of a Garland connection is mysteriously missing. The documentary provides no specific information about him, or for that matter, about any of his alleged co-conspirators ever having received fake notes from any North Korean. Garland did make visits to North Korea’s Moscow embassy, but Vladimir Uskov, the Russian police unit chief who probably knew the most about any possible illicit links between Garland and the North Koreans in Moscow, could only tell Panorama that his information showed that people working at the North Korean embassy “may have been involved in the transportation of counterfeit dollars.”
1. Press Release, “Leader of Irish Workers’ Party and Official Irish Republican Army Arrested in United Kingdom on U.S. Indictment Charging Trafficking in Counterfeit United States Currency”, Kenneth L. Wainstein, United States Attorney for the District of Columbia, October 8, 2005.
2. IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA, Grand Jury sworn in on September 30, 2004. UNITED STATES OF AMERICA v. SEAN GARLAND, also known as “the Man with the Hat”, CHRISTOPHER JOHN CORCORAN, also known as “Christie”, DAVID LEVIN, also known as David Batikovich Batikian, also known as Gedimin Gotautas, also known as “Russian Dave”, also known as “Doctor”, TERENCE SILCOCK, also known as “Terry”, HUGH TODD, also known as F. B. Rawing, also known as Peter Keith Clark, ALAN JONES, and MARK ADDERLEY, Defendants. (Capitalization is in original document.)
3. The date the indictment was returned is stated in the October 8, 2005 press release issued by the US Attorney for the District of Colombia.
4. David L. Asher, “The North Korean Criminal State, its Ties to Organized Crime, and the Possibility of WMD Proliferation,” Policy Forum Online 05-92A: November 15th, 2005.
5. Josh Meyer and Barbara Demick, “Counterfeiting Cases Point to North Korea, Pyongyang is accused of being behind a growing effort to print and move rafts of U.S. $100 bills”, Los Angeles Times, December 13, 2005.
6. Attorney of the United States in and for the District of Columbia, UNITED STATES OF AMERICA v. SEAN GARLAND, Conspiracy to Commit Counterfeit Acts Outside the United States, in violation of Title 18, United States Code, Sections 371, 470 and 473).
7. Rebecca Allison, “Three jailed for $27m counterfeit dollars scam,” The Guardian, July 27, 2002.
8. Los Angeles Times, December 13, 2005.
9. Demetri Sevastopuloin, “US pursues former IRA chief over forged dollars”, Financial Times, March 27, 2006.
11. Jon Silverman (legal affairs analyst), “Extradition ‘imbalance’ faces Lords’ test,” February, 22 2005, BBC News.
12. The extradition treaty (the “Treaty”) between the United States and the United Kingdom was signed on March 31, 2003 by then UK Home Secretary David Blunkett and US Attorney General John Ashcroft. Certain provisions in the Treaty took effect in the UK by the entry into force of the Extradition Act 2003 on January 1, 2004. The 2003 Treaty was formally approved by the US Senate on September 29, 2006 and the US Treaty Approval Document was signed by President Bush on December 6, 2006.
13. Editorial, “An unequal relationship,” The Independent, 11 July 2006.
14. An entry for Sean Garland at the open encyclopedia Wikipedia website states that he was born in Dublin.
15. Website of the Campaign to Stop the Extradition of Sean Garland to the United State, Sean Garland responds to “Agenda” article in Irish Times on Monday 17th October 2005
16. Some allowance also has to be made for the fact that the US Attorney has no doubt reserved his strongest evidence for a possible future trial.
17. As the indictment explains: “In 1996, the United States began to issue a redesigned $100 bill; a distinctive feature of the change was that the portrait of Benjamin Franklin appearing in the center of the bill was significantly enlarged. Thereafter, the older bills were commonly referred to as ‘small heads’ and the new bills were commonly referred to as ‘big heads’. Four security features of the ‘big heads’ were the use of a particular optically variable ink (“OVI”), the use of an enhanced embedded security thread, a security watermark, and changed microprinting.”
18. Los Angeles Times, December 13, 2005.
19. That these three are still officially wanted was confirmed in an email received from a spokesperson working in the office of the US Attorney for DC.
20. That these three are still officially wanted was confirmed in an email received from a spokesperson working in the office of the US Attorney for DC.
21. The High Court, Between: Christopher Corcoran Plaintiff And Deputy Commissioner T.P. Fitzgerald Defendant, Record Number: 2002 No. 301 SP, Judgment of Mr Justice Michael Peart delivered on the 12th day of May 2005.
22. This author has yet to write the Home Secretary.
23. Website of the Campaign to Stop the Extradition of Sean Garland to the United States, Letter to The Irish Times, November 17, 2005.
26. The Use and Counterfeiting of United States Currency Abroad, a September 2006 report jointly prepared by the U.S. Treasury, the Federal Reserve, and the U.S. Secret Service. Available through the US Treasury Department’s website: (scroll to the bottom of Treasury’s press release to find the link to the 2006 report).
John McGlynn is an independent Tokyo-based analyst. Email: [email protected]. He wrote this article for Japan Focus.
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