The CEO of an internet company based in Las Vegas faces the possibility of a 127-year prison sentence after being found guilty of laundering more than $4 million using Bitcoin. The funds in question are linked to Mexican cartels and were obtained through a hacked charity, as reported by the Department of Justice.
Martin Mizrahi, aged 53, was convicted of wire fraud, money laundering, and identity theft following a 12-day trial in a federal court in Manhattan. The case forms part of a broader international crackdown on illegal activities involving cryptocurrencies.
During the trial, evidence revealed that Mizrahi utilized Bitcoin to launder over $4 million, including $3 million from a New York-based nonprofit organization and additional sums from a Mexican cartel. Furthermore, he was involved in a credit card fraud scheme that processed nearly $8 million in fraudulent charges through his company.
Mizrahi’s illicit activities, which occurred between February and June 2021, employed sophisticated tactics such as email phishing to target financial institutions. Despite claiming ignorance of the funds’ illicit origins, the jury found him guilty based on compelling evidence.
Damian Williams, a US Attorney, emphasized the significance of the jury’s verdict in deterring such crimes. He highlighted Mizrahi’s misuse of his company for laundering millions, asserting that individuals introducing illicit funds into the US financial system would face consequences.
The crackdown on cryptocurrency-related fraud extends beyond the United States, with similar actions being taken in India. The Enforcement Directorate has charged 299 entities, including individuals of Chinese origin, for defrauding investors through a cryptocurrency mining scam. These efforts align with the global push to combat financial crimes involving digital currencies.
Meanwhile, the case of OneCoin, a notorious cryptocurrency scheme, has also attracted attention. Mark Scott, implicated in laundering $400 million from the scheme, received a ten-year prison sentence in January. The scheme’s leaders, Ruta Ignatova and Karl Sebastian Greenwood, were each sentenced to 20 years in prison, underscoring the challenges in regulating digital finances globally.
These developments occur amid growing scrutiny of cryptocurrencies in financial crimes. However, it’s worth noting that traditional cash transactions remain the preferred method for money laundering among criminal organizations, according to the US Treasury Department. Cash’s anonymity and stability, particularly in US currency, continue to make it attractive for illicit activities compared to traceable blockchain transactions.