A Long Island woman has been indicted on federal bank fraud and money laundering charges after attempting to transfer over $150,000 to overseas ISIS-related accounts. According to the U.S. Department of Justice, Zoobia Shahnaz was apprehended at JFK International Airport attempting to board a flight to Islamabad, Pakistan, with the intent to join ISIS forces in Syria.
The scheme included converting credit into bitcoin to avoid detection. It didn't work.
"Designed to Avoid Transaction Reporting Requirements"
Specifically, Shahnaz obtained a loan for approximately $22,500 by way of materially false representations. She also 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.
Shahnaz, 27, was charged with one count of bank fraud, conspiracy to commit money laundering, and three substantive counts of money laundering. She could face up to 30 years for the bank fraud charge alone and 20 years on each of the money laundering counts.
How Crypto Is This Currency?
Ars Technica reports on the common misconception surrounding the anonymity with bitcoin transactions: "You don't need to disclose your identity to use the Bitcoin network. But Bitcoin's blockchain is public, which means that anyone -- including federal prosecutors -- can examine the complete record of every bitcoin transaction ever made." And it's not difficult for federal prosecutors to subpoena bitcoin transaction records, "to link a blockchain address with a real-world identity."
Shahnaz, a former lab tech at a Manhattan hospital, according to the New York Daily News, had previously traveled to Jordan to volunteer with the Syrian American Medical Society to give medical aid to Syrian refugees. She had also allegedly visited ISIS-related websites and googled "medical students ISIS," according to her indictment.