FILE PHOTO: A member of the Iraqi rapid response forces walks past a wall painted with the black flag commonly used by Islamic State militants, at a hospital damaged by clashes during a battle between Iraqi forces and Islamic State militants in the Wahda district of eastern Mosul, Iraq, January 8, 2017. REUTERS/Alaa Al-Marjani
August 13, 2020
By Mark Hosenball and Jonathan Landay
WASHINGTON (Reuters) – The U.S. Justice Department on Thursday said it took down efforts by the military wing of Hamas, al Qaeda and Islamic State to raise funds via cryptocurrency through schemes that included selling bogus COVID-19 safety equipment to U.S. hospitals.
Officials told reporters that they seized about $2 million during the largest-ever U.S. move against the use by militant groups of cryptocurrencies. Authorities also seized more than 300 cryptocurrency accounts, four websites and four Facebook <FB.O> pages, authorities said.
“These actions represent the government’s largest-ever seizure of cryptocurrency in the terrorism context,” the department said in a statement.
The U.S. Justice Department, Internal Revenue Service, Federal Bureau of Investigation and Homeland Security were all involved in investigations that took down the fundraising schemes.
John Demers, head of the Justice Department’s national security division, said investigators seized around $2 million during the crackdown. During the final stages of their probe, officials said, U.S. agents operated an undercover website mirroring a Hamas website for 30 days.
Investigators said Islamic State’s scheme used a website called FaceMaskCenter.com to peddle personal protective equipment touted as approved by the U.S. Food and Drug Administration to U.S. hospitals, nursing homes and first responders. It promoted its alleged wares through Facebook accounts
But the items “were not FDA approved,” the DOJ statement said.
The website collected payments via PayPal and U.S. credit cards, but never delivered any equipment, investigators said.
They said Al Qaeda solicited donations for its scheme via the Telegram app.
Hamas’ military wing, known as the al-Qassam Brigades, in 2019 posted a solicitation for bitcoin donations on its social media page, which it moved to its official websites. U.S. authorities were able to seize all 150 cryptocurrency accounts used to launder funds, investigators said.
“Nothing was hidden,” said one U.S. official, who spoke on condition of anonymity to discuss operational details. “They thought they were protected” by the encryption in the apps they used.
(Reporting by Jonathan Landay and Mark Hosenball, Editing by Scott Malone and Dan Grebler)