NEW YORK: A suburban New York hospital technician accused of using bitcoin and other cryptocurrencies to launder money meant for the militant group Islamic State was arrested on charges of money laundering in support of a foreign terrorist organization and bank fraud, prosecutors said Thursday.
Federal prosecutors in New York's Suffolk County claimed in court papers that Zoobia Shahnaz, 27, used fraudulent credit cards and loans to accumulate $85,000, which she attempted to transfer to the radical group Islamic State before attempting to go to Syria to join it. Prosecutors said that after traveling to Jordan to work with the Syrian American Medical Society, Shahnaz returned to the United States and applied for six credit cards, which she used to buy bitcoin and other cryptocurrencies.
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The resident of the hamlet of Brentwood in Islip on Long Island appeared before a federal judge late on Thursday and was ordered detained, prosecutors said. Shahnaz' lawyer, Steve Zissou, did not immediately respond to a request for comment on the case.
After borrowing about $85,000 with fraudulently obtained credit cards and loans and withdrawing another $22,000 from bank accounts in her own name, Shahnaz sent funds to recipients in Pakistan, China and Turkey, prosecutors said. Some of that money came in the form of $63,000 in bitcoin and other crypto-currencies purchased with the credit cards, prosecutors said.
Arraignment and detention documents released on Thursday showed that Shahnaz, a US citizen born in Pakistan, was arrested on Wednesday. Prosecutors said that in July Shahnaz obtained a Pakistani passport and booked a flight to Pakistan with a layover in Istanbul with the intention of going to Syria.
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She was stopped by law enforcement investigators at John F Kennedy airport and questioned about her trip and the financial transactions, prosecutors said. She had $9,500 in cash with her, just under the limit of $10,000 that a person can take out of the country without declaring it to immigration and customs officials, they said.
Subsequent searches of Shahnaz' electronic devices showed numerous searches for Islamic State-related material, including travel checklists. She faces three charges of money laundering, including money laundering in support of a foreign terrorist organization, and is also charged with bank fraud. She faces up to 20 years in prison on each of the money laundering charges and up to 30 years for the bank fraud charge.
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