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Long Island woman allegedly used Bitcoin to fund ISIS

Thomas Joscelyn
15th December 2017 - FDD's Long War Journal

The Department of Justice (DOJ) announced yesterday that a US citizen, Zoobia Shahnaz, has been arrested and charged with sending funds to the Islamic State (ISIS). Shahnaz, a 27-year-old resident of Long Island, New York, has also been charged with “bank fraud, conspiracy to commit money laundering and three substantive counts of money laundering” — all in the service of the so-called caliphate. Prosecutors have cast suspicion on a trip she made to Jordan in 2016 and also alleged that she had a longstanding interest in ISIS propaganda.

The US government accuses Shahnaz, who was born in Pakistan, of defrauding financial institutions and then converting the “illicit proceeds” into Bitcoin and “other cryptocurrencies” that she could launder and transfer abroad to ISIS. She allegedly accumulated $85,000 for the jihadists in this manner, defrauding American Express Bank, Chase Bank, Discover Bank and TD Bank in the process.

According to the DOJ, Shahnaz “obtained a loan for approximately $22,500 by way of materially false representations” and also “fraudulently applied for over a dozen credit cards, which she used to purchase approximately $62,000 in Bitcoin and other cryptocurrencies online.” She apparently transferred other funds as well, as prosecutors allege that she wired more than $150,000 in total “to individuals and apparent shell entities in Pakistan, China and Turkey.”

The specific recipients are not identified, but prosecutors mention an “individual” in Karachi, a “medical supply company in the Zhejang Province of China” and an “individual” in Ankara as being on the receiving end of Shahnaz’s wires transfers.

The “transactions were designed to avoid transaction reporting requirements, conceal the identity, source and destination of the illicitly obtained monies, and, ultimately, benefit ISIS,” according to the DOJ.

Shahnaz planned to leave the US, but was stopped for questioning at John F. Kennedy International Airport in New York on July 31 as “she attempted to board a flight to Islamabad, Pakistan.” She scheduled a “multi-day layover in Istanbul, Turkey,” which is “a common point of entry for individuals traveling from Western countries to join ISIS in Syria.” Indeed, officials say that her planned visit to Pakistan was a ruse, as she was really going to use Turkey as a gateway to Syria.

However, Shahnaz didn’t make it to Turkey. Instead, she was arrested earlier this week (on Dec. 13) after being prohibited from traveling abroad. Authorities had obviously been tracking her movements and accumulating evidence beforehand.

“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,” FBI Assistant Director-in-Charge William F. Sweeney, Jr. said in a statement. “On top of which, she allegedly tried to launder virtual currency to bolster terrorists’ dwindling financial support. 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.”

“We want to thank our law enforcement partners Suffolk County Police Department, with whom we worked this case side-by-side,” Sweeney added.

Court filings provide more details regarding Shahnaz’s background. She “has no known criminal history” and, until mid-June, had been working at a Manhattan hospital as a “lab technician,” earning “approximately $71,000 per year.”

In early 2016, she travelled “to Jordan to volunteer with the Syrian American Medical Society.” Once in Jordan, she provided medical aid to Syrian refugees for approximately two weeks in both Amman and in the Zataari Refugee camp. The US government claims that “ISIS exercises significant influence” at the refugee camp. The implication is that she consorted with jihadists while ostensibly doing relief work.

Steve Zissou, the attorney appointed to defend Shahnaz, claims that her activities were strictly “humanitarian” in nature. But US officials concluded that wasn’t the case.

The FBI investigated Shahnaz’s online activities, finding that she was researching ISIS as early as Aug. 2015. She allegedly looked into making “hijrah” (that is, migrating) to the lands of the self-declared caliphate. Shahnaz accessed “websites and social media pages” with titles and text such as “Hijrah Checklist,” “Hijrah Tips and Reminders,” “a message to the hesitant one from jihad hijrah,” and “what made you join [ISIS].” In addition to downloading ISIS propaganda, she also accessed the “pages of known ISIS recruiters, financiers, and fighters, including those who have urged lone-wolf attacks against American targets.”

Another ISIS suspect arrested in the US also sought to fund the terror group using Bitcoin to “mask” the origin of funds. In 2015, Ali Shukri Amin (a 17-year-old from Manassas, Virginia) pleaded guilty to terror-related charges. As part of his plea agreement, Amin “admitted to using Twitter to provide advice and encouragement to [ISIS] and its supporters.” Writing under the “Twitter handle @Amreekiwitness,” Amin “provided instruction on how to use Bitcoin, a virtual currency, to mask the provision of funds to” ISIS and also provided “facilitation” to ISIS “supporters seeking to travel to Syria to fight” for the organization.

And Turkey has long been the preferred route for ISIS recruits seeking to join Abu Bakr al Baghdadi’s cause. Earlier this month, a Texas resident pleaded guilty to terror-related charges after authorities discovered that he was working with a “a Turkish-based foreign terrorist fighter facilitator.”

Shahnaz could face decades in prison is she is convicted or pleads guilty. The DOJ says she “faces a maximum of 30 years for the bank fraud charge and 20 years on each money laundering count.”

Thomas Joscelyn is a Senior Fellow at the Foundation for Defense of Democracies and the Senior Editor for FDD’s Long War Journal.

Follow the Foundation for Defense of Democracies on Twitter at @FDD

Tags

bitcoin, isis, islamic-state, turkey, zoobia-shahnaz