Woman charged with laundering money via bitcoin to support ISIS

PHOTO: A collection of Bitcoins stand in this arranged photograph in Danbury, U.K., Dec. 10, 2015.PlayChris Ratcliffe/Bloomberg via Getty Images
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A 27-year-old New York City-area woman has been accused of stealing and laundering more than $85,000, using Bitcoin and other cryptocurrencies, to support ISIS, the U.S. Department of Justice said Thursday.

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Zoobia Shahnaz, who lives in Brentwood on Long Island, was charged with bank fraud, conspiracy to commit money laundering and three counts of money laundering. The five-count indictment was unsealed Thursday in federal court in Central Islip, New York.

"The defendant defrauded numerous financial institutions and obtained over $85,000 in illicit proceeds, which she converted to Bitcoin and other cryptocurrencies," the DOJ explained in a statement. "She then laundered and transferred the funds out of the country to support the Islamic State of Iraq and al-Sham ("ISIS") ... After consummating the scheme, the defendant attempted to leave the United States and travel to Syria. Shahnaz, a U.S citizen, was arrested yesterday."

According to court records, Shahnaz worked as a lab technician at a Manhattan hospital until June of this year Around January of 2016, the government says she volunteered in Jordan with the Syrian American Medical Society.

Part of her volunteer work took her to a refugee camp where prosecutors said "ISIS exercises significant influence."

But Steve Zissou, an attorney assigned by the judge to represent Shahnaz, told Newsday that she never tried to help ISIS. He said she wanted to help Syrian refugees she met while volunteering.

"Whatever she did was for humanitarian purposes only," Zissou said.

Shahnaz is accused of fraudulently obtaining six credit cards and a loan from a Manhattan bank to procure more than $85,000 which prosecutors allege she then converted to Bitcoin and other cryptocurrencies and laundered the money through overseas transfers, all with an intent to financially support ISIS. Prosecutors say the financial institutions she defrauded include American Express Bank, Chase Bank, Discover Bank and TD Bank.

Having never told her family she had quit her job in June, she attempted to board a flight at New York City's John F. Kennedy International Airport for Pakistan on July 31, with a layover in Turkey.

She was questioned by law enforcement officials at the airport, since her itinerary was suspect. Prosecutors said they believe she was trying to leave the U.S. for Syria and join ISIS.

"Her itinerary included a multi-day layover in Istanbul, Turkey -- a common point of entry for individuals traveling from Western countries to join ISIS in Syria," a court document stated. "The defendant's return ticket had been booked for September 4, 2017 on a Turkish Airlines flight from Istanbul to JFK."

But investigators believe Shahnaz had no plans to return to the U.S. She had allegedly done Internet searches for "one-way tickets to Istanbul" but purchased a roundtrip ticket. Prosecutors point out that ISIS recommends those wishing to travel to join ISIS to buy roundtrip tickets because they might be deemed less suspicious by law enforcement agents.

Agents said she gave false and conflicting explanations about her overseas wire transfers. She was arrested Wednesday. Prosecutors want her held without bail pending trial.

Her next court date is January 5, 2018.

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