Matthew Cox | Inside True Crime Podcast
North Korea’s Billion Dollar Scam on the U.S. Exposed
Wed, 21 May 2025
An inside look into cyber scams and the lazarus groupKarim's Links https://www.linkedin.com/in/karimhijazihttps://www.youtube.com/@TheIntrovertedIconoclast Follow me on all socials!Instagram: https://www.instagram.com/insidetruecrime/TikTok: https://www.tiktok.com/@mattcoxinsidetruecrimeDo you want to be a guest? Fill out the form https://forms.gle/5H7FnhvMHKtUnq7k7Send me an email here: [email protected] you want a custom "con man" painting to shown up at your doorstep every month? Subscribe to my Patreon: https: //www.patreon.com/insidetruecrimeDo you want a custom painting done by me? Check out my Etsy Store: https://www.etsy.com/shop/coxpopartListen to my True Crime Podcasts anywhere: https://anchor.fm/mattcox Check out my true crime books! Shark in the Housing Pool: https://www.amazon.com/dp/B0851KBYCFBent: https://www.amazon.com/dp/B0BV4GC7TMIt's Insanity: https://www.amazon.com/dp/B08KFYXKK8Devil Exposed: https://www.amazon.com/dp/B08TH1WT5GDevil Exposed (The Abridgment): https://www.amazon.com/dp/1070682438The Program: https://www.amazon.com/dp/B0858W4G3KBailout: https://www.barnesandnoble.com/w/bailout-matthew-cox/1142275402Dude, Where's My Hand-Grenade?: https://www.amazon.com/dp/B0BXNFHBDF/ref=tmm_pap_swatch_0?_encoding=UTF8&qid=1678623676&sr=1-1Checkout my disturbingly twisted satiric novel!Stranger Danger: https://www.amazon.com/dp/B0BSWQP3WXIf you would like to support me directly, I accept donations here:Paypal: https://www.paypal.me/MattCox69Cashapp: $coxcon69
Chapter 1: What are the major players looking for in cyber scams?
The major players are looking at your house through Google Maps. They're looking at what neighborhood you're in. They see what route you take to your job based on your cell phone connectivity to towers because they can profile you for knowing exactly how much money you're worth probably paying based on whatever scam might be. I have a pretty unorthodox path. Started many years ago, mid-90s.
I was actually doing what is, I guess, a watered-down version of what I was doing. It's called competitive intelligence, otherwise known as corporate spy work or corporate espionage work, but I was doing it overseas. And I was doing it well before there were any real laws wrapped around that kind of thing.
So my job really was if a large entity, whether it was a company or government, needed information about a competitive environment, I would be the guy they would call with my team to go get that. So I lived a very similar life in a lot of ways to people that you probably interviewed quite a bit, but I did it as a very high-end consultative practice for those companies.
Chapter 2: How did Karim transition from competitive intelligence to cybersecurity?
And I got I was very successful at it, decided to branch out and build a U.S. operation for it in the early 2000s. And funny story is I brought my consultancy to the U.S. I got my stationery created. I got my business cards done. I got the website going and I was ready to go. And then 9-11 happened. And I was like, damn it. This is how everyone did. It was like, wow, that's a shock.
This is going to be bad. And the economy took a hit. And basically, companies kind of clammed up on buying what they would consider more luxury-like capabilities and services, which I never considered a luxury. But unfortunately, they were too busy trying to do their day-to-day business rather than hire a spook like me to go figure out what was going on with their competitors. And so...
And over a sushi lunch one day, a friend of mine who was in the end of cybersecurity industry said, look, he goes, dude, who better in the world to call and ask how a guy like you would hack into them than you? So why don't you just offer counterintel capabilities? Right. I was like, that's actually not a bad idea.
So almost over the next two and a half, three weeks, I sort of pivoted my whole firm from being a competitive intelligence company to being a counterintelligence company. And so this is the early 2000s. Cyber or what was called InfoSec was just kind of burgeoning. It was still an early nascent thing.
If you ask someone about information security or whatever, people will probably talk about antiviruses at best, McAfee or Norton or whatever. Antec, I think, would probably be it. Firewalls, maybe that would be a word that people would know. But that was about it.
And so little by little, I gained a pretty interesting customer base of organizations and mainly organizations at the time that wanted to make sure their systems were up to snuff and able to be secured against threat actors. And that carried on for about 15 years.
In that set of years, I built companies that actually built security and intelligence-based products and sold those companies off, which made me even more money because you're selling a whole organization that has intellectual property. And I still do that today. So I still build companies that build security or cybersecurity like products or intelligence based products.
But I've gone back to my roots now and I actually do provide counterintelligence consulting, but more to family offices and ultra high net worth individuals, groups that have a lot to lose and that don't really understand what. vectors of attack they may be subject to or what kind of individuals or groups they might be interesting, find them interesting to attack.
So I have a really interesting job where I have to think like the bad guys and advise my client and customers on what they're likely in for. So it's kind of a dream job. Yeah.
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Chapter 3: What tactics do cybercriminals use to exploit companies?
I tend to have a great spidey sense. I'm super big on intuition. I mean, I'm a big believer in intuition. So-
You're right on. And well, this is what's interesting. Those threat actors and the sophisticated ones, everything from the nation state groups, like before we got on the call, we talked about Lazarus from North Korea. They thrive on duping people that are less discerning than you into doing things.
And they're looking to harvest everything from financial means, getting people to pay up in crypto and all kinds of stuff and everything else. But I'd be curious about something. Did you get taught that or did you naturally feel like you need to be more discerning and skeptical of what you're getting? Was that just in you naturally to do that?
I mean, obviously from just growing up, I think I've always been someone who's kind of thought, how does that work? How would... If I didn't want to do it that way, how could I do it this? Like I've always been very, you know, I was a bit in very, I want to say smart. I always think of it as just being clever. You know, I've always been super clever. And yeah, I'm very, I have a degree.
My degree is in fine arts, you know, so like I don't have a normal degree and it always, and I remember my teachers were always explaining that, look, you know, if an artist designed this, then an artist can figure out how to replicate it. Or how to improve on or how to do something along those lines.
But I definitely think going to prison and meeting all of the various different types of criminals and hearing all the different types of scams. And that definitely spiked my intuition at the very least because you very quickly – Question everything when someone approaches you. And I'm always very polite.
I was raised by a strict Catholic woman who was – my mom was very – no matter what, you be polite. It doesn't matter. You tell someone no, no matter how you do it, you do it politely. And so I've always been very polite. But I can be very, very polite to you while internally thinking –
something's not right that doesn't sound right you would never know i'm questioning you but yeah i'm not i don't jump into anything right away and and and my dad had there was just tons of things that he would mention to me just you know he worked for state farm uh insurance for gosh for like 50 years he grabbed i mean he he worked till he was 70 something was it 50 or 40 probably 40 years
40, 45 years. But he was very big on questioning people, asking questions about things, making phone calls. He was like, nobody's ever going to not hire you because you called back two days later. And they said, oh, okay, we'll let you know. We'll give you a call within the week and calling back two days later.
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Chapter 4: How does the Lazarus Group operate in cyber scams?
So a lot of nation state skilled actors, like out of Russia or whatever, or China or South North Korea, excuse me, they're working their night. They're moonlighting as cyber criminals doing this kind of stuff because they have the skills.
Right.
Well, I mean, I can see that in China.
I definitely see it in Russia. But I mean, in North Korea, I mean, those it, you know, you're not accessing the it must be very difficult to access the Internet if that's possible at all. So, I mean, these are guys that are that, you know, it's it's been proven that they're working for the North Koreans just to generate money for the regime. Right. So.
Which to me, you know, I, well, you know, it's funny too, because unfortunately the whole time I'm watching the program on, on the Lazarus group. And so for like, well, can you basically give like a minute or two explanation of what happened, uh, with that?
Well, so there's just one thing I want you to. Just to be clear, the specific incident you're talking about is one of many. So this group's still active. So there's no shutting down of them, so to speak. Oh, yeah, it's billions.
We're talking about billions.
Huge, huge. And what's interesting is that, and just for context, and I don't know how you want to kind of drive toward getting into this conversation. We're kind of in it already, which is interesting. The size of these... these polls, as you put it, or licks as a good word for it are massive.
I mean, they absolutely dwarf anything else that's kind of physically done where you're going into one location. It's just unbelievable. What's really interesting and where I'm hoping we'll land in the conversations around the ransomware operators that dwarf the Lazarus stuff too. But by the way, just Lazarus for context for your viewership that, you know, this is a North Korean company.
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Chapter 5: What methods do hackers use to launder stolen cryptocurrency?
Well, they did switch portions of it. They could only switch so much. And they knew they were being tracked. The problem is they had to go through an exchange. In order to launder it, they had to go through an exchange, which this is what killed me is that
It's like, okay, you have to go through an exchange to convert this to actual cash and get it into... And they're trying to make it, obviously, completely anonymous, but it's being tracked thus far. It was being tracked. And eventually, they ended up moving 80% of it to an exchange that was extremely credible.
When I watched this, they were like, we have no idea why they thought that this exchange would do this for them. Does that make sense? Like they were like, typically they'll go to a questionable exchange that doesn't ask a lot of questions. And they were like, so we are fear, but you can only move so much through that.
And they said, for some reason they moved it here and we just contacted them and they froze the amount, the money. And they were like, so they got lucky and they, they did it getting 40 million. What, what I didn't understand was, you know, it was all, I don't know. It's North Korea. I, I, I kept thinking like, why wouldn't you have already gone somewhere in Europe?
And you could steal identities, get passports, go to Europe, establish accounts that would allow you to move that money very quickly. And it would have become anonymous. You can wire it into whatever, 40 or 50 or 100 different banks and then wire it again. And you only need a fake identity to do that or steal someone's real identity.
10 people's real identities, multiple corporations, multiple bank accounts, Now, it may take some time, but at least the people that were tracking the Bitcoin would have been lost at that point. At that point, they would have been like, okay, this was just converted to cash and placed in several Romanian banks. And now it's been... And people are cashing it out.
People are moving it to different corporate accounts. People are moving it throughout Europe. Now we've got a problem. But for some reason, we just...
Well, it's interesting, Matthew. So two things. One, in my entire career, the way we've generally caught people, especially from a cyber perspective, is some failure... along the way where they've forgotten to cover something up, or they've misstepped in an area where they thought they were being a little overzealous.
Like if I were to speculate, and this is purely speculation about why they maybe went to a very legitimate exchange, was to hide in plain sight, right? To have something there, because it's well known that these less savory exchanges maybe couldn't handle the volume, perhaps, and are... imminently under the watch of the Interpol or FBI or others, right?
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Chapter 6: How do nation-state hackers overlap with cybercriminals?
You set up the corporations. You opened the bank accounts. You had people in between you and them. Nobody knew your location. You had all these drop phones. You had all of this. You did this. All of these things. And then you went to a... You went and rented a room using a stolen credit card.
You have half a million dollars in the bank account, a couple hundred thousand in cash, and you're in the middle of running a multimillion-dollar scam, and you used a stolen credit card for a $1,000 hotel room bill. Why? Yeah, 100%.
It's the old... Al Capone's tax records story, the famous one. It's the taillight out on the car in the getaway that gets it pulled over.
I use that all the time. I always say, listen, I'm not one of these guys that's going to be driving around with a stolen car and a broken taillight and a body in the trunk. That's not me. I'm crossing all my T's, dotting all my I's. But I'm pretty patient.
That's a key thing, right? The genius is the obsessive compulsiveness that separates the men from the boys in that space, even in cyber. And I think it would probably be very similar in your world, which is that the ones that are meticulous... usually win because they're, they're really, really obsessive about perfection.
And they're, they're really big on making sure that the, the op is clean from the start. And there's this, there's this, it's an art form again, back to that, that concept. I'm not trying to praise it per se.
I mean, you know, but you have to appreciate the sophistication of some of these groups that are perfect with their zero residual presence of things or how they're able to completely eradicate anything. It's pretty amazing. Well, I mean, and it takes a lot of effort.
know i think everything is kind of like that though look at like steve jobs is like you know this amazing visionary horrible interpersonal relationships. You know what I'm saying? Exactly. It's like same thing. You know, you look at someone like, you know, CEOs or presidents, you know, just complete narcissists that make their way all the way up the chain.
But the fact is that, well, if he wasn't a narcissist, if he wasn't a narcissist, he would have never made it up the chain. And what makes some CEOs amazing CEOs or entrepreneurs are the same things that make them detrimental to be around. Very much so. It's the same thing with committing any type of crime. Or in the criminal world, these guys, you're taking all these painstaking risks.
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Chapter 7: What are the challenges of prosecuting cybercriminals?
um precautions and then you make one little slip up because you think i've i've done such an amazing job here that nobody's going to catch that yeah and matthew you're right i mean look victim of your own success is real in this space especially with the volumes of money we're talking about you know it's not just one bank heist it's effectively thousands of bank heists all at once right and here's an interesting thing i mean you start looking at some of the um
really really sophisticated you know caucus region or or balkan maybe you know russian-esque groups and you saw the pictures of them sitting in saint-tropez on these massive yachts with like a freaking ocelot right it's like you're gonna get caught doing that i mean you know you there's no discretion after a while there there's an over there's a there's a there's a megalomaniac
quality that kicks in with the ones that are a little less than, than disciplined and have the means to kind of win on a perpetual, but it's kind of like I was on a friend the other day about watching world, uh, world tour poker or world championship poker games. And it's always the same people that seem to end up at the last rounds of these things. And there's a reason for that.
It's because they're very disciplined. They're playing. Yeah. I do it. No, it's not luck at all.
Um, it's not luck. Yeah, I was just, when you were mentioning, like, I know I saw this one about this Russian hacking group that had stolen, I forget how much cryptocurrency they'd stolen. I mean, it was outrageous. And they're, you know, because they're in Russia, They're on social media. They're driving these Audi – I forget what the Audi A – is it? R8. R8 sports car doing donuts.
They're driving Ferraris. They're just – they're talking. They're holding up stacks of money. They're, yeah, look at us. Look at us. And it's just like – wow, you better never leave Russia. They end up going somewhere where they think, eh, we're going to pop into this country right here. Nobody's paying attention. No. Countries are patient.
They throw an indictment and a red notice out there and just wait.
Yeah, well, this is the thing that's funny is that, you know, you talk about, you know, among the criminal underground from a cyber perspective, they look at the law enforcement groups as slow and plotting and not that sharp. And they're not going to hire the best talent ever because it's government. It's the same story, right?
I think it holds true across all forms of whether it's kinetic or cyber or whatever. The problem is you nailed it. You said exactly what I say all the time is that they have all the time and the money in the world. There's no rush.
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Chapter 8: How can organizations balance security and usability?
They didn't deploy their own malware as like a separate kind of thing. They actually baked in the compromise into an update that went out legitimately by the company. Is that what you're talking about? Solar winds? Yeah. Yeah.
I think I was thinking about two different things. I know that in China, I know there was also an American company that was doing, uh, the windmills, you know, the, or the, um, yeah. And, and they actually, and this was an intellectual property theft from China where they had stolen a bunch of the, um, the software. But anyway, you were saying for, uh, the,
Yeah, that one is just kind of the poster child for supply chain hacking, the best way to put it.
Wasn't that a Russian company?
Well, SolarWinds is an American company, but it was believed to be a Russian actor behind the hack, right? So in one go, the way they were able to sort of scoop up a ton, they got into about 30,000 different organizations all in one go. So and they had access to these.
Yeah. And so what are they taking from those organizations? Yeah. Is this just.
Well, it depends, because I think this is where this this is the weird, murky area between where geopolitical motivations that drive these more sophisticated government run groups exist. bleeds into the cyber criminals that are all financially motivated.
And sometimes those governmental groups that have political motivations to destabilize or create influence campaigns, we're getting into something much deeper and not quite per se true crime for your show. But I think it is a...
massive massive operation that uses things like criminal activity to their advantage it's almost like proxy militia right you know think of it that way when you have a hacker that's out there wreaking havoc by stealing millions of dollars in crypto or shorting stock i mean what an incredible misdirection utility for a nation-state actor to leverage i mean look there's been no shortage in history back to you know our history lesson for the third one of this of this particular episode but
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