Man Accused of Using EBay for Terrorist Funding Agrees to Plead Guilty

By Christopher S. Stewart and Mark Maremont Features Dow Jones Newswires

The American man accused of using fake eBay transactions to receive Islamic State funds for a possible terrorist attack in the U.S. has agreed to plead guilty, according to a court filing.

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Mohamed Elshinawy, who was living in Maryland when he was arrested in late 2015 on terror-related charges, is scheduled to appear for the guilty plea Tuesday in a Baltimore federal court.

He faces four criminal counts, including terror financing and conspiracy to provide material support to a foreign terrorist organization. A lawyer for Mr. Elshinawy and a federal prosecutor declined to comment.

The Elshinawy case was critical in uncovering a global financial network centered on a British technology company used by Islamic State to clandestinely move money around the world and pay for military equipment used by the terror group in Syria, the U.S. says.

Mr. Elshinawy has another distinction: His is the first and only publicly known case in which Islamic State money flowed into the U.S. for a potential terror attack in America, according to Seamus Hughes, deputy director of George Washington University's Program on Extremism.

The plot appeared to be "more sophisticated than other ISIS cases in America," Mr. Hughes says.

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Federal investigators initially were tipped off to Mr. Elshinawy through a $1,000 Western Union money transfer to him from Egypt in June 2015, sent by an Islamic State operative whom authorities haven't publicly identified, according to the Federal Bureau of Investigation affidavit and a person familiar with the situation.

FBI agents spent months tailing Mr. Elshinawy and combing through his transactions, eventually finding at least $8,700 he allegedly had received from Islamic State operatives.

To hide some of the money transfers, Mr. Elshinawy pretended to sell computer printers on eBay, then received funds from the British company through the online payment service PayPal, according to the FBI affidavit.

Mr. Elshinawy told FBI agents he was instructed to use the money for "operational purposes," which he understood to mean a terror attack.

He told agents he had no intention of carrying out such an attack, and instead was taking money from "thieves," the FBI affidavit indicated.

Though several major U.S. attacks have been inspired by Islamic State, none are known to have been directly financed by the terror group, unlike attacks in Europe and elsewhere.

U.S. prosecutors have charged 131 people in terror cases connected to Islamic State, according to the George Washington University Extremism Program. Most are U.S. citizens or permanent residents; 77 have been convicted or pleaded guilty, including Mr. Elshinawy's expected plea.

When Mr. Elshinawy hit the radar of federal investigators, he was living with a woman in a one-bedroom apartment in a bungalow complex outside Baltimore.

Born in Pittsburgh, Mr. Elshinawy mostly grew up in Egypt in a family of academics. By 2007, he was living in the U.S., according to his résumé, which is posted online. He delivered newspapers, worked at a convenience store and at a company that sold firearm accessories and other outdoor supplies through eBay, the résumé says.

Mr. Elshinawy, known as "Mo," at one point drove a station wagon with a passenger window that didn't work and a glove compartment stuffed with unpaid speeding tickets, people who knew him said.

He returned to Egypt at least twice, where his parents still lived, according to former landlords and his résumé. It was during a more-recent such trip that Mr. Elshinawy turned to Islamic State, federal investigators say.

He reunited there with a childhood friend who introduced him to a member of the terror group, which was looking for operatives in the U.S., a person familiar with the case said. They needed a "gofer," this person said, someone to support or carry out an attack.

In the spring of 2015, Mr. Elshinawy pledged allegiance to Islamic State on social media and said he planned to die a martyr, according to an FBI affidavit. He took steps to conceal his online and cellphone communications, the affidavit says, including the use of encrypted technologies and throwaway phones, which he registered to fake names like "Black Eyes."

What he planned to attack in the U.S. is unclear. He told his childhood friend over social media he had "many targets" and the two discussed an explosive device that Mr. Elshinawy said he planned to make, according to an FBI affidavit.

When the FBI first interviewed Mr. Elshinawy in July 2015 about suspicious money coming from Egypt, he told them it was a present from his mother, according to court documents. He later admitted it came from an ISIS operative.

As they dug into his online history, investigators found a tangle of financial transactions stretching back through that spring.

The hub of the financial network operated through the British technology company founded by the now-dead computer hacker for Islamic State, Siful Sujan, according to the FBI affidavit.

The company and affiliates bought military-grade surveillance equipment, antennas and anti-bugging devices from companies in the U.S., Canada and Britain, the FBI alleged.

At one point, investigators received an alert that Mr. Elshinawy had been arrested after a speeding violation. They made sure local police didn't do anything to compromise the investigation such as holding him, according to the person.

Authorities around the globe, including in Britain and Bangladesh, arrested alleged members of the Islamic State financing network in a coordinated sweep in December 2015. Mr. Sujan, the alleged mastermind, was killed in a drone strike in Syria at the same time.

Hours after the strike, several dark vehicles pulled in front of Mr. Elshinawy's single-story bungalow complex, neighbors said. One car drove over the grass to the back entrance. Agents used a battering ram to break down the front door of the apartment, and hauled away Mr. Elshinawy.

Write to Christopher S. Stewart at christopher.stewart@wsj.com and Mark Maremont at mark.maremont@wsj.com

(END) Dow Jones Newswires

August 15, 2017 11:53 ET (15:53 GMT)