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New York woman allegedly laundered $85K in bitcoin to send to ISIS

An alleged supporter of the terror group in New York is facing 90 years in prison for sending ISIS tens of thousands of dollars in bitcoin and other cryptocurrencies between May and August this year.

by Tim Hume
Dec 15 2017, 9:00am

Everyone’s looking to get in on bitcoin these days – even ISIS.

An alleged supporter of the terror group in New York is facing 90 years in prison for sending ISIS tens of thousands of dollars in bitcoin and other cryptocurrencies between May and August this year. Federal prosecutors indicted her on three counts of money laundering, one of conspiracy to money launder, and one of bank fraud.

Zoobiah Shahnaz, a 27-year-old from Long Island, stole more than $85,000 by fraudulently applying for more than a dozen credit cards and a bank loan, which she used to buy bitcoin and other cryptocurrencies, according to the indictment that was unsealed on Thursday.

According to the indictment, she then laundered the money in a series of wire transactions totalling more than $150,000 to individuals and suspected shell entities in Pakistan, Turkey, and China, although the source is the rest of the money is unclear. The transactions, which were designed to hide the source and destination of the money, were intended to help ISIS, the indictment said.

After laundering the money, she attempted to travel to Syria herself on July 31 but was stopped and questioned at John F. Kennedy International Airport while preparing to board a flight to Pakistan.

“Syria is a perilous and violent war-torn country, but the subject in this investigation was allegedly so determined to assist ISIS that she planned a covert, illegal entry into Syria,” said FBI Assistant Director-in-Charge William F. Sweeney, Jr. “On top of which, she allegedly tried to launder virtual currency to bolster terrorists’ dwindling financial support.”

Shahnaz’s lawyer, Steve Zissou, told reporters outside the courthouse that his client, a former lab technician at a Manhattan hospital, was sending the funds overseas to help Syrian refugees. She had travelled to Jordan in January 2016 to volunteer with a medical charity helping Syrians displaced by the civil war.

“What she saw made her devoted to lessening the suffering of a lot of the Syrian refugees and everything she does is for that purpose,” he said.

Most terror financing occurs through an informal cash-based transfer system known as hawala, which allows for anonymous donations through a middle-man. But terror groups have shown an increasing interest in the potential of bitcoin and other cryptocurrencies, which exist outside of formal banking structures and can help users make transactions with more anonymity.

In 2015, ISIS allegedly posted its bitcoin address on the dark web so its supporters could send the cryptocurrency, and in June the same year, a teenager in Virginia was arrested for tweeting out instructions on how supporters could send bitcoin to ISIS.

In January, Indonesian police said that Islamist militants in the Middle East were using bitcoin and Paypal to fund terror activities in southeast Asia, and last year a jihadist propaganda unit based in Gaza launched a bitcoin fundraising campaign on social media.