New York woman accused of laundering bitcoin to help Islamic State

A New York woman has been accused of laundering bitcoin and other cryptocurrencies and wiring the money to help the so-called Islamic State.

Zoobia Shahnaz, 27, faces charges of bank fraud, conspiracy to commit money laundering and is being  held without bail.

Pakistan-born Shahnaz had worked as a lab technician in the US.

According to prosecutors she took out fraudulent loans of loans of $85,000 in order to buy bitcoin online.

Bitcoin, an online currency is not legal tender, but its value has rocketed this year.

The digital currency has been used by criminals to launder money. UK authorities are pushing to increase regulation of the currency.

Court records show that, Ms Shahnaz, who lives in Brentwood on Long Island, was a lab technician at a Manhattan hospital until June.

Shahnaz was arrested Wednesday and charged with bank fraud and four counts of money laundering, acting US attorney Bridget Rohde said in a statement.

''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,'' Rohde said, New York Post reported.

According to prosecutors she obtained a Pakistani passport in July and booked a flight to Pakistan with a layover in Istanbul, for traveling to Syria.

When she was arrested at John F Kennedy airport she had $9,500 in cash, just under the limit of $10,000 that a person can legally take out of the country without declaring the funds.

Numerous searches showed up on her electronic devices for Islamic State-related material.

Shahnaz could end up with 20 years in prison on each of the money laundering charges and up to 30 years for the bank fraud charge, according to commentators.