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US ISIS Supporter Caught Sending $150k In Laundered Crypto To Syria

Long Island, New York: a woman is facing up to 110 years in jail after trying to send $150,000 in Bitcoin and altcoins to ISIS.

The New York Post reported how Zoobia Shahnaz fooled banks into giving her loans and credit cards, which she then used to purchase cryptocurrencies. The loan Shahnaz secured amounted to $22,500, while several credit cards contributed to a further $62,000 in cryptocurrency sent abroad to support the terrorist organization.

Shahnaz, a US citizen, previously worked as a lab technician in a Manhattan hospital. Last year she traveled to Jordan to work with the Syrian American Medical Society as a volunteer medic in Syrian refugee camps where, according to court documents, ISIS had “significant influence.”

In July of this year, the ISIS supporter was stopped and questioned in JFK Airport, apparently on her way to Syria and prevented from boarding. She was then arrested this Wednesday and charged with bank fraud and multiple counts of money laundering, Acting​ ​US Attorney Bridget Rohde said in a statement from the Department of Justice (DOJ) on Thursday.

The DOJ outlined Shahnaz’s activities as follows:

“…The defendant defrauded numerous financial institutions and obtained over $85,000 in illicit proceeds, which she converted to Bitcoin and other cryptocurrencies. She then laundered and transferred the funds out of the country to support the Islamic State of Iraq and al-Sham [ISIS]”

The same statement claims that Shahnaz was prevented from accomplishing her goals in supporting ISIS, though to what extent remains unclear. In the statement, the FBI Assistant Director-in-Charge William F. Sweeney triumphantly stated:

“The FBI New York Joint Terrorism Task Force kept this woman from her dangerous and potentially deadly goal. We will do all we can to stop the next person hoping to do the same.” 

According to the statement, if convicted, Shahnaz faces a maximum of 30 years for the bank fraud charge and 20 years on each money laundering count.

Crypto’s PR woes

The events are a blow to Bitcoin proponents, who have been trying to defend the cryptocurrency’s reputation from its birth. Bitcoin skeptics regularly claim that the cryptocurrency enables illicit activities, including money laundering and support of terrorism.

In terms of terrorism, analysts have found that cryptocurrency does not play a major role in funding terrorist organizations. However, Shahnaz’s case, though isolated, certainly works against cryptocurrency’s reputation.

Following the attacks in Europe this Summer, the European Union is seeking to understand the extent to which crypto is implicated in financing terrorist groups, and potentially to decrease the anonymity of cryptocurrency transactions as much as possible.

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DOJ Alleges Bitcoin Involved in Attempted ISIS Funding

A New York woman has been indicted for attempting to provide financial support to the ISIS terrorist group, a scheme that prosecutors say involved the purchase of cryptocurrencies using fraudulently obtained credit cards.

Zoobia Shahnaz of Long Island, the U.S. Attorney’s Office for the Eastern District of New York said today, has been charged with bank fraud, conspiracy to commit money laundering and three counts of money laundering.

Though the indictment unsealed today makes no mention of the involvement of bitcoin directly, the office said in a press release that the funds she sent overseas – totaling more than $150,000 – were sourced in part from credit cards she fraudulently applied for. Those cards were then used to purchase bitcoin and other unnamed cryptocurrencies, which were subsequently laundered back into to the banks prior to being wired out.

Some of the funds were also generated through a fraudulently obtained loan, prosecutors said.

The office went on to explain:

“[Shahnaz]…fraudulently applied for over a dozen credit cards, which she used to purchase approximately $62,000 in Bitcoin and other cryptocurrencies online. She then engaged in a pattern of financial activity, culminating in several wire transactions, totaling over $150,000, to individuals and apparent shell entities in Pakistan, China and Turkey. These transactions were designed to avoid transaction reporting requirements, conceal the identity, source and destination of the illicitly obtained monies, and, ultimately, benefit ISIS.”

Court documents names four banks – American Express Bank, Chase Bank, Discover Bank and TD Bank – that Shahnaz and a group of unnamed conspirators sought to use to transmit funds overseas. After the transactions were sent, according to the statement, Shahnaz was questioned by law enforcement while attempting to travel to Syria from New York.

At this time, it’s unclear based on the available information if any bitcoin was sent overseas by Shahnaz.

If convicted on all charges, Shahnaz could be sentenced to as many as 90 years in prison, according to the attorney’s office.

Justice statue image via Shutterstock

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