8 months ago
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The CEO of a Las Vegas Internet company could face a 127-year prison sentence following his conviction for laundering over $4 million with Bitcoin, funds connected to Mexican cartels, and a hacked charity, according to the Department of Justice.
Martin Mizrahi, 53, is facing a possible 127-year prison sentence after being convicted of wire fraud, money laundering, and identity theft. This case is part of a broader international crackdown on illicit activities involving cryptocurrencies.
The conviction came after a 12-day trial in a Manhattan federal court, where it was revealed that Mizrahi had used Bitcoin to launder over $4 million, which included $3 million from a New York nonprofit organization and additional funds from a Mexican cartel. The operation also involved a credit card fraud scheme that ran nearly $8 million in fraudulent charges through his company.
Mizrahi’s illegal activities spanned from February to June 2021 and utilized advanced tactics such as email phishing to target banks and credit card companies. Despite claiming ignorance regarding the illicit origin of the funds, the jury found the evidence against him convincing.
Damian Williams, a US Attorney, commented on the case, noting the importance of the jury’s unanimous verdict as a deterrent against such crimes. He pointed out the misuse of Mizrahi’s company for laundering millions, stating, “The jury’s unanimous verdict sends a resounding message that individuals who steal and introduce illicit funds into the US financial system will be held accountable.”
The crackdown on cryptocurrency fraud is not confined to the United States. In India, the Enforcement Directorate has charged 299 entities, including individuals of Chinese origin, with defrauding investors through a cryptocurrency mining scam. This action follows a complaint filed by the Cyber Crimes Unit of Kohima Police, echoing the deceptive tactics seen in Mizrahi’s case.
Further illustrating the global efforts against cryptocurrency fraud, the case of OneCoin has also garnered attention. Mark Scott, involved in laundering $400 million from the scheme, was sentenced to a decade in prison in January. The scheme, led by Ruta Ignatova and Karl Sebastian Greenwood, resulted in 20-year prison sentences for the leaders, underscoring the challenge of regulating digital finances globally. Ignatova’s brother was also released recently after completing a 34-month sentence for his involvement.
These developments occur amidst increasing scrutiny of cryptocurrencies in financial crimes. However, it’s notable that despite the focus on digital currencies, the US Treasury Department has reported that traditional cash transactions remain the predominant method for money laundering among criminal organizations. The report cites the anonymity and stability of cash, especially US currency, as the main reasons for its preference over traceable blockchain transactions.
