Podcast Summary: The Rest Is Classified – Episode 10: North Korea’s CIA: The Billion Dollar Heist (Ep 2)

Introduction and Recap

In the second episode of "North Korea’s CIA: The Billion Dollar Heist," hosts David McCloskey and Gordon Corera delve deeper into one of the most audacious cyber heists orchestrated by North Korean intelligence services, known as the Reconnaissance General Bureau (RGB). Building on last week’s discussion, they continue to unravel the complex operation aimed at siphoning nearly a billion dollars from the Central Bank of Bangladesh.

The Attempted Heist by NORCs

Katty introduces the episode by highlighting the scale of the attempted heist:

“$1 billion billion dollars. What did they do in Austin Powers films?” [00:35]

The NORCs (North Korean Operational Cyber units) meticulously planned this operation to fund the North Korean state, including its lavish lifestyle under Kim Jong Un and its weapons programs.

Key Events and Timeline

Gordon sets the stage by outlining the initial discovery of the heist:

“On Friday 5th February 2016, when a duty manager, a guy by the name of Zubair Ben Huda, notices... a printer glitch...” [04:24]

This seemingly innocuous printer malfunction was the first sign of the cyber intrusion. The malfunction occurred in a highly secure room responsible for printing hard copies of significant multimillion-dollar transfers. David underscores the severity:

“$1 billion, Dr. Evil style sounds like a lot. And it is North Korea...” [07:26]

Cybercrime and Reconnaissance

The hosts discuss the RGB's extensive reconnaissance efforts:

“They have been in the system for some time, carrying out reconnaissance so they've learned the systems and they've timed their heist...” [08:14]

This reconnaissance ensured that the operation was executed with precision, minimizing the chances of detection.

The Role of Pyongyang and RGB

Gordon explains the strategic planning from Pyongyang:

“There is an operational chief in Pyongyang who is looking at this thing holistically...” [10:07]

This chief orchestrated the entire operation, ensuring that all components, from cyber infiltration to money laundering, were seamlessly integrated.

The Bank in Bangladesh

The breakdown of the event at the Central Bank of Bangladesh is meticulously detailed:

• Initial Glitch and Investigation:

  “Ben Huda had done, of course, what any sensible person would do when confronted with a printer glitch... prompt his departure...” [05:22]

• Unfolding of the Heist:

  “The printer had been compromised by North Korean malware, making it impossible to fix...” [05:24]

As technicians attempted to restart the malfunctioning printer, urgent messages from the Federal Reserve Bank in New York began printing:

“Messages are extremely urgent. They're from the Federal Reserve bank in New York... instructions to drain the entire account.” [06:07]

Money Laundering in the Philippines

After the initial transfer, the focus shifts to how the stolen funds were laundered:

“They tried to wire this money to a bank in Manila in the Philippines... exploiting holidays and time differences...” [09:08]

The Casino Angle

The most intriguing aspect is the use of casinos for money laundering:

“Casinos offer you a very interesting advantage here because you have to take this money and you effectively have to launder it...” [25:02]

Gordon elaborates on the strategic use of Macau’s casinos, which are less regulated compared to Las Vegas, facilitating the conversion of illicit funds into legitimate currency.

Operational Challenges and Outcomes

Despite meticulous planning, the operation faced setbacks:

“An alert got tripped at the Fed in New York because there was an unrelated business called Jupiter Seaways Shipping in Athens...” [10:43]

This led to most transactions being flagged, with only five out of the initial $1 billion successfully transferred, amounting to approximately $81 million. Katty raises a critical point about the physical cash conversion:

“How do you physically get hold of cash? Because that's the bit that seems to me to be almost the hardest bit...” [12:04]

Human Element and Ethical Considerations

The discussion shifts to the operatives involved, particularly Park Jin Hyuk, a cyber operative whose role is central to the heist. The hosts ponder the ethical dimensions:

“Are they criminals or are they victims?... he's in a system where he doesn't have a lot of agency.” [39:43]

David reflects on the human cost, highlighting the complex motivations and pressures faced by individuals within the North Korean intelligence apparatus.

Comparative Analysis with Other Intelligence Services

Katty asks a pivotal question about North Korea's uniqueness:

“How unique is that? ... is North Korea really unique in just how far it pushes that, where the kind of criminal and the intelligence side are so tightly fused?” [40:08]

Gordon responds by acknowledging similarities with other states like Russia but emphasizes North Korea's distinct integration of cybercriminal activities into its intelligence operations.

Conclusion and Future Implications

The episode concludes with reflections on the heist's partial success and its implications for future operations:

“This is better than nothing... but someone inside the RGB has to account...” [35:16]

Katty notes that North Korea continues to evolve its cyber operations, shifting focus to cryptocurrency exchanges to evade detection. The hosts underscore the ongoing threat posed by state-sponsored cybercriminal activities and the necessity for robust cybersecurity measures globally.

Notable Quotes

• “$1 billion billion dollars. What did they do in Austin Powers films?” – Katty [00:35]

• “This is a very, very carefully thought through operation. This isn't a smash and grab bank job, it's a smart intelligence operation.” – Katty [09:46]

• “Do we know what happens to our hacker?... We don't know whether he's in the shark tank or living it up with the pet dogs and the meth.” – Katty [39:06]

• “They have built the same kind of network as organized crime syndicates to be able to move money.” – Katty [14:00]

Final Thoughts

Episode 10 of "The Rest Is Classified" offers a gripping exploration of North Korea's sophisticated cyber heist against the Central Bank of Bangladesh. Through meticulous research and engaging discussion, David McCloskey and Gordon Corera shed light on the shadowy intersection of espionage and cybercrime, revealing the lengths to which state actors will go to secure illicit funds. This episode serves as a stark reminder of the pervasive influence of cyber operations in modern geopolitics and the ongoing challenges in combating such threats.