By Jay Solomon and Chun Han Wong 

The U.S. Department of Justice has indicted a prominent Chinese businesswoman and Communist Party member on charges that she and her trading company helped blacklisted North Korean companies to evade U.S. sanctions and procure raw materials, potentially for use in Pyongyang's nuclear-weapons program.

The indictment, unsealed on Monday, alleges that Ma Xiaohong and her company, Dandong Hongxiang Industrial Development Co., served as financial fronts for North Korean companies sanctioned by the U.S. for their alleged role in developing Pyongyang's nuclear and ballistic-missile capabilities.

The Justice Department said Ms. Ma and her company and associates masked hundreds of millions of dollars of transactions on behalf of North Korean firms, which used the U.S. banking system.

The indictment specifically alleges that Ms. Ma and Hongxiang Industrial conducted U.S. dollar transactions on behalf of North Korea's Korea Kwangson Banking Corp., which the U.S. sanctioned in 2009 for its alleged role in financing Pyongyang's weapons programs.

The U.S. Treasury Department also announced sanctions against Ms. Ma, her trading company and two of her business associates at Hongxiang Industrial.

"The charges and forfeiture action announced today allege the defendants in China established and used shell companies around the world, surreptitiously moved money through the United States and violated the sanctions imposed on North Korea in response to, among other things, its nuclear-weapons program," Assistant Attorney General Leslie Caldwell said in a statement.

Efforts to reach Ms. Ma over the past week have been unsuccessful. Yao Jizhou, a Hongxiang Industrial official and assistant to Ms. Ma, has repeatedly declined to comment on the allegations against the businesswoman and her company.

The Wall Street Journal reported earlier this month that Ms. Ma and Hongxiang Industrial were under scrutiny by U.S. and Chinese officials for its activities in North Korea.

The Justice Department also is seeking, through a separate civil complaint, to freeze funds tied to Ms. Ma and to Hongxiang Industrial held in 25 Chinese bank accounts. U.S. officials said these funds were illegally transited through the U.S. financial system on behalf of Korea Kwangson Banking Corp.

The indictment said the North Korean bank was a primary financier of two sanctioned firms the U.S. has long believed are central players in North Korea's nuclear and missile programs. These are Tanchon Commercial Bank and Korea Hyoskin Trading Corp.

The Justice Department charged in the civil complaint that Ms. Ma and Hongxiang Industrial masked four banking transactions on behalf of Korean Kwangson Banking Corp. from 2009 through 2013. This included a sugar commodity transaction and three contracts involving the purchase of urea fertilizer.

"It appears that the majority of [Hongxiang Industrial's] businesses and assets are derived from evading sanctions and the overall money laundering scheme," the Justice Department said.

According to a Chinese government-run corporate registry, Hongxiang Industrial and Kwangson had collaborated on a joint-venture focused on warehousing services from 2010 to 2015.

Hongxiang Industrial owned 51% of the joint venture, which was set up in the Chinese border city of Dandong with initial registered capital of 20 million yuan ($3 million). Kwangson held the remaining 49% of the warehousing firm. It wasn't clear why the joint-venture was terminated.

The Obama administration has vowed to significantly increase financial pressure on North Korea and its young leader, Kim Jong Un, following its fifth nuclear weapons test on Sept. 9.

The U.S. Congress passed legislation this year requiring the White House to sanction Chinese firms conducting trade with North Korea's regime. Roughly 90% of Pyongyang's international trade goes through China.

The Justice Department has been closely monitoring the activities of Ms. Ma and her company for much of this year, according to U.S. officials, due to the belief they were helping North Korea evade sanctions. The department sent U.S. prosecutors to China twice last month to detail the evidence the Obama administration had amassed against the businesswoman and her company, according to these officials.

Police in China's Liaoning province, which borders North Korea, announced earlier this month that they recently started investigating Hongxiang Industrial for "serious economic crimes" conducted during its trading activities. Ms. Ma was later named a suspect in that police probe in a corporate disclosure from a separate company in which she is a major shareholder.

U.S. officials have stressed in recent days that while they shared information with Chinese authorities, they didn't consider the actions against Ms. Ma to be coordinated. They said Washington was still seeking documents from China detailing exactly what charges have been made against Ms. Ma and her company in that country.

Write to Jay Solomon at jay.solomon@wsj.com and Chun Han Wong at chunhan.wong@wsj.com

(END) Dow Jones Newswires

September 26, 2016 14:38 ET (18:38 GMT)