UPDATE 1 (2015-5-29): Office 39 has been connected to the Japanese investigation. According to the Daily NK:
An investigation launched by Japanese police has revealed that Office 39, a special department charged with raising funds for Kim Jong Un’s use, is involved in illegal operation exporting pine mushrooms to Japan, Yomiuri Shimbun, a Japanese daily, reported on May 27th.
During a police raid on the home Huh Jong Do, the son of the head of the pro-North General Association of Korean Residents in Japan [Chongryon], the authorities uncovered documents revealing correspondence between the group and Office 39, revealing that North Korea has been exporting pine mushrooms to Japan in conjunction with Chosun Specialty Sales, an affiliate of Chongryon.
An official with the investigation said it was the first time documents explicitly stating “Office 39” have come to light, leading police to push ahead with the investigation and assert the shadowy agency’s direct involvement in the illicit operation.
Both Huh and Kim Yong Jak, head of Chosun Specialty Sales, were arrested on May 12th for violating laws administration of foreign currency. Police investigations revealed that these two men had imported approximately 1,800 kg of pine mushrooms from North Korea in September of 2010–a clear violation of Japan’s ban on trading with North Korea, implemented after North Korea’s second nuclear test in 2009.
Meanwhile, Washington D.C.-based Voice of America, quoting Japanese daily Sankei Shimbun, that Office 39, Huh, and Chosun Specialty Sales were all involved in the pine mushroom smuggling ring, dividing the profits among the involved parties.
ORIGINAL POST (2015-3-26): According to the Japan Times:
The head of the pro-Pyongyang General Association of Korean Residents in Japan, or Chongryon, had his home searched by police on Thursday, and two South Korean men were arrested on suspicion of illegally importing matsutake mushrooms from North Korea.
Raids took place at six locations, including the Tokyo home of Ho Jong Man, chairman of Chongryon, a body which has functioned as a de facto North Korean embassy for many decades in the absence of diplomatic ties between Tokyo and Pyongyang.
Observers said the raid on the chairman’s home could affect stalled bilateral talks on Pyongyang’s abductions of Japanese nationals in the 1970s and 1980s.
Police arrested Lee Tong-chol, 61, president of a Tokyo-based trading house, and Yoshihiko Kin, 42, an employee of the company. They are suspected of illegally importing about 1,200 kg of matsutake mushrooms worth around ¥3 million via China in September 2010.
The mushrooms are believed to have been sold in Japan, mislabeled as Chinese-grown produce.
Japan has banned imports from North Korea since October 2006 as part of economic sanctions imposed in response to Pyongyang’s missile and nuclear programs.
Both suspects are residents of Japan, and both denied the allegation. Investigators quoted Lee as saying he does not understand why he should be arrested, while Kin denied all knowledge of the matter.
Police are investigating the relationship between the suspects and Ho, who is a member of North Korea’s top legislature.
After the early morning raid on his home in Tokyo’s Suginami Ward, Ho told reporters angrily he does not even know the name of the trading company.
“The investigation is done unlawfully and this would lead to serious problems in the relationship” between North Korea and Japan, he said.
“This is political suppression against the General Association of Korean Residents in Japan,” he said.
Touching on the ongoing investigation into the fate of Japanese citizens abducted by North Korea, Ho said the Japanese authority is making things worse, interfering with the investigation by deliberately worsening relations with North Korea.
Meanwhile, a senior police investigator said authorities suspect a link between the illegal trade and Chongryon, and that they will do everything they can to investigate.
To that end, police have so far searched more than 10 locations, including the trading house and the homes of Lee and of Ho’s son last May.
The locations searched Thursday include the Tokyo home of the pro-Pyongyang group’s vice chairman.
Read the full story here:
Police search home of Chongryon leader over suspected North Korea mushroom shipment