A Pakistani-American woman who bought bitcoin and other cryptocurrencies using fraudulently obtained credit cards before wiring the funds to ISIS has pled guilty to charges of offering financial support to a terrorist organization.
According to court filings, Zoobia Shahnaz made a couple of wire transactions last year to fronts for the Islamic terror outfit ISIS in China, Pakistan and Turkey. Besides the financial contributions to ISIS, Shahnaz was also planning to travel to join the terror group in Syria. She was intercepted at the JFK Airport in New York on her way to Istanbul, Turkey – a common entry point for ISIS recruits from the West.
Part of the amount that she wired to ISIS fronts was obtained by dishonest means. Per the prosecutors, between March and July last year, Shahnaz used ‘materially false pretenses, representations and promises’ to obtain a US$22,500 loan from a financial institution.
Shahnaz also got multiple credit cards from various financial institutions including Discover, American Express, TD Bank and Chase Bank by false pretenses. She then used the credit cards to buy bitcoin and other cryptocurrencies worth approximately US$62,000 from exchanges before converting them to cash.
“She also fraudulently applied for and used over a dozen credit cards, which she used to purchase approximately $62,000 in Bitcoin and other cryptocurrencies online,” a press release from the U.S. Department of Justice read. “She then engaged in a pattern of financial activity, culminating in several wire transactions totaling over $150,000 to individuals and shell entities in Pakistan, China and Turkey that were fronts for ISIS.”
Shahnaz, who has been in custody since she was arrested last year in December, could be sentenced for up two decades in prison.
The case highlights the fact that fears that cryptocurrencies could be used to fund terrorism are overblown since despite using bitcoin to launder the money, Shahnaz had to resort to a wire transfer in her attempts to get the money in the hands of the terrorists.
As CCN reported in September, part of the reason why bitcoin has not proved useful to terrorists is that they are usually located in places that lack the infrastructure necessary to conduct cryptocurrency transactions. This has seen cash take an almost monopolistic hold as the most anonymous method of financing terror.
However, according to intelligence analyst, Yaya Fanusie, this could change in the future and there is a need for the U.S. government to ensure that Anti-Money Laundering and Know Your Customer regulations are rigorously enforced.
“By preparing now for terrorists’ increasing usage of cryptocurrencies, the U.S. can limit the ability to turn digital currency markets into a sanctuary for illicit finance.”
Featured image from Shutterstock.
Last modified (UTC): November 30, 2018 08:16