The North Korean leader Kim Jong-il has found a novel way of raising badly needed cash, according to the South Korean authorities: unleashing young hackers on South Korea’s immensely popular online gaming sites to find ways to rack up points convertible to cash.
Despite its decrepit economy, North Korea is believed to train an army of computer programmers and hackers. The police in Seoul said Thursday that four South Koreans and a Korean-Chinese had been arrested on charges of drawing on that army to organize a hacking squad of 30 young video gaming experts.

Working from Northern China, the police said, the squad created software that breached the servers for such popular South Korean online gaming sites as “Lineage” and “Dungeon and Fighter.” The breach allowed round-the-clock play by “factories” of dozens of unmanned computers.

Their accumulated gaming points were exchanged for cash at Web sites where human players are focused on acquiring enhancements for their online personas, or avatars. The gaming software was also sold, the police said; such factories, while illegal, are common in South Korea and China.

In a little less than two years, the police said, the organizers made $6 million. They gave 55 percent of it to the hackers, who forwarded some of it to agents in Pyongyang, the capital of North Korea. “They regularly contacted North Korean agents for close consultations,” Chung Kil-hwan, a senior officer at the police agency’s International Crime Investigation Unit, said during a news briefing.

Mr. Chung said the hackers, all graduates of North Korea’s elite science universities, were dispatched from two places: the state-run Korea Computer Center in Pyongyang and the Korea Neungnado General Trading Company. The company, he said, reports to a shadowy Communist Party agency called Office 39, which gathers foreign hard currency for Mr. Kim through drug trafficking, counterfeiting, arms sales and other illicit activities.

South Korean and American officials say they believe the slush fund is worth billions, and that Mr. Kim uses it to help finance his nuclear weapons programs and to smuggle Rolex watches and other luxury goods, which he doles out to buy the allegiance of the party and the military elite. Meanwhile, the bulk of his people suffer privation and myriad hardships.

A series of United Nations sanctions imposed after North Korea’s nuclear and ballistic missile tests in recent years aim to squeeze the cash flow by curtailing trade with the North Korean companies suspected of illicit activities. They also ban exports of luxury goods to North Korea.

The North Korean computer experts were each required to send at least $500 a month back to the Pyongyang government, the police said. It remained unclear how much of the rest of their profits they pocketed for themselves, given different layers of party and military officials involved in a typical illicit operation.

What appeared clear from the case, the police said, was that North Korean agencies, increasingly hamstrung by international sanctions, were exploring any new means to raise cash for Mr. Kim and prove their loyalty. The two Koreas, which have remained technically at war for almost 60 years, operate in an environment of mutual suspicion. The tensions extend to the virtual world: Seoul accused North Korea of spreading malicious software that paralyzed the Web sites of South Korean government agencies and financial institutions in July 2009 and again in March. In May, the South blamed North Korea for an attack that brought down a South Korean bank’s network.

North Korea denied responsibility and accused Seoul of inventing a conspiracy. Source:
http://www.nytimes.com/2011/08/05/world/asia/05korea.html?_r=1

Posted: Aug 08, 2011 5:55 pm