Bitcoin Used to Launder Millions in Drug Cartel Money

News | March 19, 2024 By:

On Monday, March 4, 2024, Damian Williams, the United States Attorney for the Southern District of New York, announced that Martin Mizrahi, known as “Marty Mizrahi,” had been convicted of various financial crimes relating to wire fraud, bank fraud, money laundering, identity theft, and operating an unlicensed money transmitting business.

Mizrahi, 51, was the CEO of a Las Vegas-based company. According to evidence presented at his 12-day-trial, from February through June 2021 Mizrahi engaged in multiple schemes to defraud banks and credit card companies of nearly $8 million. He also laundered over $4 million in funds tied to fraud and narcotics proceeds through his company.

Prosecutors said Mizrahi began by laundering bulk cash from Mexican drug cartels, converting the funds into bitcoin and sending it anonymously. In addition, he laundered over $3 million that had been stolen through a business email compromise scheme targeting a New York non-profit. Between February and June last year, Mizrahi laundered a total of more than $4 million in illegal proceeds.

At the same time, Mizrahi participated in a credit card fraud ring, running approximately $8 million in bogus charges through his company using stolen identities and credit cards. False invoices were prepared to justify the charges to financial institutions.

If sentenced consecutively, Mizrahi faces up to 132 years in prison. Crimes included conspiracy to commit wire and bank fraud (30 years each), money laundering (20 years), aggravated identity theft (mandatory minimum of 2 years), and operating an unlicensed money transmitter (5 years). No sentencing date has been set.

The convictions demonstrate the government’s commitment to disrupting illicit financial activity. As the use of cryptocurrency in money laundering grows, prosecuting bad actors who enable criminal schemes with crypto services becomes increasingly important.