Tag Archives: Money Laundering

New York woman charged with laundering money to help Islamic State

By Brendan Pierson

(Reuters) – U.S. prosecutors said Thursday that they had charged a Long Island, New York woman with laundering more than $85,000 in fraudulently obtained money through Bitcoin to help Islamic State.

Zoobia Shahnaz, 27, was arrested Wednesday on charges of bank fraud, conspiracy and money laundering, the office of Acting U.S. Attorney Bridget Rohde in Brooklyn announced. Shahnaz pleaded not guilty on Thursday before U.S. Magistrate Judge Kathleen Tomlinson in Central Islip, New York, according to John Marzulli, a spokesman for Rohde’s office.

A lawyer for Shahnaz, Steve Zissou, could not immediately be reached for comment.

Prosecutors said that between March and July of this year, Shahnaz obtained a loan and multiple credit cards by making false representations to financial institutions, and used them to buy Bitcoin.

They said she then laundered the money through illicit transactions involving shell companies in Pakistan, China and Turkey with the ultimate goal of using the money to benefit Islamic State.

In July, prosecutors said, Shahnaz sought to travel to Syria, but was stopped and questioned by law enforcement at John F. Kennedy International Airport when she tried to board a flight to Islamabad, Pakistan.

The most serious charge, bank fraud, carries 30 years in prison, according to Rohde’s office.

(Reporting By Brendan Pierson in New York; Editing by David Gregorio)

Turkish gold trader implicates Erdogan in Iran money laundering

Turkish gold trader implicates Erdogan in Iran money laundering

By Brendan Pierson

(Reuters) – A Turkish-Iranian gold trader on Thursday told jurors in a New York federal court that Turkish President Recep Tayyip Erdogan personally authorized a transaction in a scheme to help Iran evade U.S. sanctions.

Reza Zarrab is cooperating with U.S. prosecutors in the criminal trial of a Turkish bank executive accused of helping to launder money for Iran. At the time of the alleged conspiracy, Erdogan was Turkey’s prime minister.

Zarrab also said for the first time on Thursday that Turkey’s Ziraat Bank and VakifBank were involved in the scheme. The two banks could not immediately be reached for comment after business hours in Turkey.

The testimony came on the third day of the trial of Mehmet Hakan Atilla, an executive at Turkey’s state-owned Halkbank, who has pleaded not guilty in Manhattan federal court.

U.S. prosecutors have charged nine people in the case, although only Zarrab, 34, and Atilla, 47, have been arrested by U.S. authorities. Prosecutors have said the defendants took part in a scheme from 2010 to 2015 that involved gold trades and fake purchases of food to give Iran access to international markets, violating U.S. sanctions.

The case has fueled tensions between the United States and Turkey, which are NATO allies. Erdogan’s government has said the case was fabricated for political reasons.

Zarrab, who began testifying on Wednesday morning, has told jurors that he ran an international money laundering scheme to help Iran get around U.S. sanctions and spend its oil and gas revenues abroad. He said he helped Iran use funds deposited at Halkbank to buy gold, which was smuggled to Dubai and sold for cash.

Zarrab has said that Atilla helped design the transactions, along with Halkbank’s former general manager, Suleyman Aslan.

Zarrab said that he paid bribes worth more than $50 million to Zafer Caglayan, who was Turkey’s economy minister, to further the scheme. He said he bribed Aslan as well.

Both Caglayan and Aslan were charged in the case. Turkey’s government has previously said that Caglayan acted within Turkish and international law, and Halkbank has said all of its transactions complied with national and international regulations.

Zarrab’s testimony has focused on Halkbank and Turkey, but on Thursday, he said that he had tried to duplicate his scheme in China before Chinese banks shut him down.

“The banks that realized this had something to do with Iran, they immediately stopped it,” he said.

(Reporting By Brendan Pierson in New York; editing by Jonathan Oatis and Dan Grebler)

Man Faces Life For Defrauding Navy Veterans

A man convicted of masterminding a $100 million fraud involving Navy veterans could be spending the rest of his life in prison.

John Donald Cody, 67, is a Harvard-trained attorney who was convicted of racketeering, theft, money laundering and 12 counts of identity theft in connection with his looting of the United States Navy Veterans Association.

Cody defrauded veterans and supporters in 41 states but Ohio took the lead in prosecuting him. He was arrested after spending two years on the run after hiding out in Portland, Oregon. Only a small amount of the $100 million was found.

The Ohio state attorney general’s office, which handled the prosecution, is asking the judge to sentence Cody to 41 years in prison and a fine of $6.3 million.

Cody’s defense team is calling for a new trial saying that their legal defense was ineffective because of limited preparation time and their client’s erratic behavior and cooperation.