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Author Topic: Long Island Woman Indicted For Funding ISIS With Bitcoin  (Read 84 times)
Hydrogen
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December 16, 2017, 11:30:58 PM
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With intriguingly coincidental timing, as cryptocurrencies reach mainstream and grab the world's attention, the US Justice Department has unsealed a grand-jury indictment that shows a Long Island woman has been indicted on charges that she tried to funnel money to ISIS using Bitcoin.

The Eastern District of New York press release details the crimes...

Quote
Long Island Woman Indicted for Bank Fraud and Money Laundering to Support Terrorists - Defendant Stole and Laundered Over $85,000 Using Bitcoin and Other Cryptocurrencies

As alleged in the indictment and court filings, the defendant defrauded numerous financial institutions and obtained over $85,000 in illicit proceeds, which she converted to Bitcoin and other cryptocurrencies.  She then laundered and transferred the funds out of the country to support the Islamic State of Iraq and al-Sham (“ISIS”), which has been designated by the U.S. Secretary of State as a foreign terrorist organization.  After consummating the scheme, the defendant attempted to leave the United States and travel to Syria.

...“As alleged, the defendant Zoobia Shahnaz engaged in a bank fraud scheme, purchased Bitcoin and other cryptocurrencies and laundered money overseas, intending to put thousands of dollars into the coffers of terrorists,” stated Acting United States Attorney Rohde.  “The indictment reflects the resolve of this Office, together with our law enforcement partners, to investigate and prosecute anyone who would seek to support terrorists, including those who would perpetrate financial crimes to do so.”

...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.

This plays so perfectly into the narrative that anyone and everyone who uses cryptocurrencies is a criminal that one could be forgiven for being skeptical of the 'false flag'-like nature of the timing of the release.

The trouble with the narrative is two-fold - Bitcoin is not anonymous... and Cryptocurrencies are not a major source of funding for terrorists.

As we detailed previously, even the IRS can track you down through the distributed ledger that tracks every transaction ever in memoriam. Last month Alt-Market.com founder Brandon Smith warned that Bitcoin may not be all that it’s cracked up to be in terms of its purported anonymity:

Quote
For years, one of the major original selling points of bitcoin was that it was “anonymous.” It always surprised me that so many people in the liberty movement bought into this scam.

Surely after the revelations exposed by Edward Snowden and organizations like Wikileaks, it is utterly foolish to believe that anything in the digital world is truly “anonymous.”

The feds have been proving there is no anonymity, even in bitcoin, for some time, as multiple arrests using bitcoin tracking have indeed occurred when the FBI decided it was in their interest. Meaning, when the feds want to track bitcoin transactions, they can, and it does not matter how well the people involved covered their actions.

Because every transaction exists on a public blockchain ledger, an enterprising organization – say like the NSA or IRS – could conceivably implement blockchain analysis tools to track down Bitcoin fund transfers around the globe.

Of course, with ISIS having been hammered to shell of its former self by Russia and its allies the following "how does ISIS fund itself" infographic is out of date, but provides some context for the 'threat' that donations... let alone donations via cryptocurrencies... represent.



Even The Fed has argued that the payments flows within the crypto-space are not relevant.

However, we fully expect to see a congressional probe demanded sooner rather than later to crackdown on Bitcoin as funding source of terrorism (besides, the US and Saudis don't like competition).

* * *

Coincenter's Peter Van Valkenburgh has issued a statement about the arrest:

Coin Center statement on Long Island money laundering arrest.All we have to go on so far is the unsealed indictment, which does not mention cryptocurrencies, and the statements of the prosecutor. Based on what we know so far though, here are our thoughts:

Thankfully she got caught before she was able to move money to ISIS. This suggests that law enforcement has the tools necessary to deal with this sort of money laundering even when it involves cryptocurrency.
The unsealed indictment doesn’t have enough facts in it to draw strong conclusions about how important Bitcoin actually was to the scheme. We know she bought it with fake credit cards and a bogus line of credit from a bank, but that’s about all.

From the statement of the prosecutor, it looks like she still tried to use wire transfers and shell companies in order to get the money to ISIS. This may suggest that a simple bitcoin transfer didn't work to accomplish her ends, and that the old ways (wire fraud) remain the best ways when it comes to evading sanctions.

We await further information.

http://www.zerohedge.com/news/2017-12-14/long-island-woman-indicted-funding-isis-bitcoin

....

Summary: A woman applied for loans using fake ID's and applied for more than a dozen credit cards to obtain $62,000 in bitcoin and other crypto. In total she sent more than $150,000 to people with terrorist affiliation in foreign countries via "wire transfers".

I'm not certain how compelling people will find this story. It seems to implicate crypto but the part of the narrative describing her using "wire transfers" seems to imply she used a bank to send the funds.

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December 17, 2017, 07:17:16 AM
 #2

This is so funny.She funds terrorists with btc but sends the money via wire transfers. Grin
In this case, bitcoin was used only for money laundering.I don`t know how it`s possible for that woman to get
loans and credit cards with fake information.What`s going on with the banks nowadays.They give loans just like that,without any information verification and real collaterals.
By the way,great infographic about ISIS main income sources.


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December 17, 2017, 12:01:43 PM
 #3

Pretty good example showing that bitcoin is not anonymous. I think it's just a isolated case and not showing that cryptos are used to fund terrorists. Or they are not smart because if you want to use cryptos for this kind of activity you don't use bitcoin, you use monero, zencash or others.
Look like she wasn't able to send bitcoins directly so used wire transfer lol

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December 18, 2017, 10:10:33 AM
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That they are able to tell the story kinda defeat the narrative they're trying to paint. If it's completely anonymous, her were they able to track the transactions back to her then? Or that they even knew her intentions? How come out of many high volume tx, this one stood out?

Looks likely that they already have monitoring in place for suspicious transactions. It's actually bitcoin that facilitated the capture. Had she managed to pull this off using traditional banking, the transactions would have been shrouded with secrecy laws, etc.

And how come no one's questioning how tf she got all those cards easily? The banks is the weak link in this case.


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December 18, 2017, 11:08:53 AM
 #5

This is so funny.She funds terrorists with btc but sends the money via wire transfers. Grin In this case, bitcoin was used only for money laundering. I don`t know how it's possible for that woman to get loans and credit cards with fake information.What`s going on with the banks nowadays. They give loans just like that,without any information verification and real collateral. By the way,great infographic about ISIS main income sources.

This story is showing us that using Bitcoin for anything illegal is not completely anonymous and that one can still get caught. People who are thinking they can get away just because they are using Bitcoin should think twice before proceeding with the dark plan. And I am really wondering why there are still those in the government who assumed that Bitcoin can be utilized for terrorism and anything illegal and not be able to be traced. This is not true anymore. This message should be sent to those in the authority in charge in finding ways to treat Bitcoin. Though Bitcoin can be used for illegal acts, the vast majority of the illegal transactions are still done using the fiat money -- and that is a big fact which can be unfortunate because there are those who blindly assumed the opposite.
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December 22, 2017, 11:51:24 AM
 #6

This is so funny.She funds terrorists with btc but sends the money via wire transfers. Grin
In this case, bitcoin was used only for money laundering.I don`t know how it`s possible for that woman to get
loans and credit cards with fake information.What`s going on with the banks nowadays.They give loans just like that,without any information verification and real collaterals.
By the way,great infographic about ISIS main income sources.
This is funny but here here we have to see whether read policy we want to adapt in the future because if it has been done by one lady, it really been done by many many other people in the future Sylvie have to stop this by legalizing the bitcoin.  And as soon as we will be over with the legalization of bitcoin, problems like these will be really less in the society and that’s how we can go towards secure future.
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December 26, 2017, 10:20:57 PM
 #7

Quote
With intriguingly coincidental timing, as cryptocurrencies reach mainstream and grab the world's attention, the US Justice Department has unsealed a grand-jury indictment that shows a Long Island woman has been indicted on charges that she tried to funnel money to ISIS using Bitcoin.

The Eastern District of New York press release details the crimes...

Quote
Long Island Woman Indicted for Bank Fraud and Money Laundering to Support Terrorists - Defendant Stole and Laundered Over $85,000 Using Bitcoin and Other Cryptocurrencies

As alleged in the indictment and court filings, the defendant defrauded numerous financial institutions and obtained over $85,000 in illicit proceeds, which she converted to Bitcoin and other cryptocurrencies.  She then laundered and transferred the funds out of the country to support the Islamic State of Iraq and al-Sham (“ISIS”), which has been designated by the U.S. Secretary of State as a foreign terrorist organization.  After consummating the scheme, the defendant attempted to leave the United States and travel to Syria.

...“As alleged, the defendant Zoobia Shahnaz engaged in a bank fraud scheme, purchased Bitcoin and other cryptocurrencies and laundered money overseas, intending to put thousands of dollars into the coffers of terrorists,” stated Acting United States Attorney Rohde.  “The indictment reflects the resolve of this Office, together with our law enforcement partners, to investigate and prosecute anyone who would seek to support terrorists, including those who would perpetrate financial crimes to do so.”

...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.

This plays so perfectly into the narrative that anyone and everyone who uses cryptocurrencies is a criminal that one could be forgiven for being skeptical of the 'false flag'-like nature of the timing of the release.

The trouble with the narrative is two-fold - Bitcoin is not anonymous... and Cryptocurrencies are not a major source of funding for terrorists.

As we detailed previously, even the IRS can track you down through the distributed ledger that tracks every transaction ever in memoriam. Last month Alt-Market.com founder Brandon Smith warned that Bitcoin may not be all that it’s cracked up to be in terms of its purported anonymity:

Quote
For years, one of the major original selling points of bitcoin was that it was “anonymous.” It always surprised me that so many people in the liberty movement bought into this scam.

Surely after the revelations exposed by Edward Snowden and organizations like Wikileaks, it is utterly foolish to believe that anything in the digital world is truly “anonymous.”

The feds have been proving there is no anonymity, even in bitcoin, for some time, as multiple arrests using bitcoin tracking have indeed occurred when the FBI decided it was in their interest. Meaning, when the feds want to track bitcoin transactions, they can, and it does not matter how well the people involved covered their actions.

Because every transaction exists on a public blockchain ledger, an enterprising organization – say like the NSA or IRS – could conceivably implement blockchain analysis tools to track down Bitcoin fund transfers around the globe.

Of course, with ISIS having been hammered to shell of its former self by Russia and its allies the following "how does ISIS fund itself" infographic is out of date, but provides some context for the 'threat' that donations... let alone donations via cryptocurrencies... represent.



Even The Fed has argued that the payments flows within the crypto-space are not relevant.

However, we fully expect to see a congressional probe demanded sooner rather than later to crackdown on Bitcoin as funding source of terrorism (besides, the US and Saudis don't like competition).

* * *

Coincenter's Peter Van Valkenburgh has issued a statement about the arrest:

Coin Center statement on Long Island money laundering arrest.All we have to go on so far is the unsealed indictment, which does not mention cryptocurrencies, and the statements of the prosecutor. Based on what we know so far though, here are our thoughts:

Thankfully she got caught before she was able to move money to ISIS. This suggests that law enforcement has the tools necessary to deal with this sort of money laundering even when it involves cryptocurrency.
The unsealed indictment doesn’t have enough facts in it to draw strong conclusions about how important Bitcoin actually was to the scheme. We know she bought it with fake credit cards and a bogus line of credit from a bank, but that’s about all.

From the statement of the prosecutor, it looks like she still tried to use wire transfers and shell companies in order to get the money to ISIS. This may suggest that a simple bitcoin transfer didn't work to accomplish her ends, and that the old ways (wire fraud) remain the best ways when it comes to evading sanctions.

We await further information.

http://www.zerohedge.com/news/2017-12-14/long-island-woman-indicted-funding-isis-bitcoin

....

Summary: A woman applied for loans using fake ID's and applied for more than a dozen credit cards to obtain $62,000 in bitcoin and other crypto. In total she sent more than $150,000 to people with terrorist affiliation in foreign countries via "wire transfers".

I'm not certain how compelling people will find this story. It seems to implicate crypto but the part of the narrative describing her using "wire transfers" seems to imply she used a bank to send the funds.

Will in this kind of new's that there some involvement of using cryptocurrencies,i hope those only for the long island woman only the punishment,and not the whole part of the world of digital currency would accept the punishment.because  bitcoin is invented for use of common good to all people and not for the one self personal interest to destroy the humankind.there are saying say's that the "sin of one person is not the sin of entire community".as like a long  island woman  doing support in the ISIS using bitcoin as there financial.i hope this would not affect the entire community of digital currency.

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December 26, 2017, 10:26:35 PM
 #8

Stupid people do stupid things. From what I read, with bitcoin or not, she made enough felonies to get the orange for 50y. I also read that counties are planning bitcoin regulation because of funding idiots like this and AML, like there aren't black market, drug cartels and terrorist before bitcoin.


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December 26, 2017, 10:29:09 PM
 #9

It is inevitable that crypto will be used to fund terrorist activities as well as many other illegal activities but this should not be something that we use as an argument to limit their use. Some level of control at some point is inevitable so it becomes more difficult but they can do it with other currencies as well if they want to.

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December 26, 2017, 11:30:36 PM
 #10

This seems to me a typical fake news just to justify some repressive measures against cryptocurrency.
We'll see what terrocrats will invent to stop us.

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December 28, 2017, 06:50:06 AM
 #11

It is inevitable that crypto will be used to fund terrorist activities as well as many other illegal activities but this should not be something that we use as an argument to limit their use. Some level of control at some point is inevitable so it becomes more difficult but they can do it with other currencies as well if they want to.

Yeah, it sucks that cases like this is what's baiting governments to regulate crypto. It's true that it's much easier for terror supporters to send money to terrorist organizations with Bitcoin and such because it's scrutinized far less stringently than fiat. I guess the easiest way to stop that from happening is to regulate crypto and exchanges. I'm sure the exchange where the woman got her coins from played a huge role in this incident. It's a reality we'll have to face sooner rather than later.

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December 28, 2017, 07:07:06 AM
 #12

The story seemed like a dumb lady doing stupid things,getting bitcoins and then wiring them to terrorist as if people behind these things does not have any idea about bitcoin or they are not having any exchange to withdraw the funds  Cheesy ,people will do stupid things and that does not mean that crypto currency is to be blamed ,people who are not using crypto currency thinks that these platform is to be blamed and will be used for these sort of activities but the real picture is that dumb lady is caught doing these activities ,which means bitcoin is transparent . Wink

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..PLAY NOW..
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