Global Insurance Fraud Floods N. Korea with Cash
North Korean leader profits personally from fires, disasters
By Jason Farago,  Newser Staff
Posted Jun 18, 2009 6:54 AM CDT
North Korean military participants gather at a rally at the Kim Il Sung Square in Pyongyang, North Korea.   (AP Photo/Korean Central News Agency via Korea News Service)
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(Newser) – North Korea has collected hundreds of millions of dollars from global insurance giants on often suspicious claims of fires, floods, and other disasters, according to a Washington Post investigation. While insurers have kept mum about their losses, US officials and Korean defectors describe a sophisticated fraud that has provided Kim Jong-il with cash, often for his personal use. "This is the gift that keeps on giving," said one State Department official.

Some details came to light when Allianz and other insurers sued over a 2005 helicopter crash. They claimed the crash was staged and that the North Korean court that upheld the claim was corrupt—but just as it reached trial the case was settled, in a near-complete victory for Pyongyang. One North Korean defector who worked in insurance gave a grim summary of the fraud: "Whenever there is a disaster, it becomes a source of hard currency."