Las Vegas CEO is convicted of laundering up to $4 million of Mexican cartel money using Bitcoin and defrauding banks of $8 million in fake credit card purchases

The founder and CEO of a Las Vegas internet service provider has been convicted of laundering drug money for a Mexican cartel and carrying out a brazen credit card fraud scheme.

Martin Mizrahi, 53, was found guilty of wire fraud, money laundering, and identity theft charges following a 12-day trial in Manhattan federal court, prosecutors announced on Monday.

Mizrahi, a wealthy entrepreneur who flaunted his lavish lifestyle on Instagram, was initially arrested in 2022 and charged in the wide-ranging criminal conspiracy alongside three other men.

Prosecutors say he used Bitcoin to launder up to $4 million, including $3 million stolen from a New York non-profit, as well as drug money on behalf of members of an unnamed Mexican cartel.

He was also convicted of participating in a credit card fraud scheme, in which he ran nearly $8 million in fraudulent credit card charges through his company, backed by phony invoices sent to banks and credit card companies to justify the charges.

LV.net founder Martin Mizrahi, 53, was found guilty of wire fraud, money laundering, and identity theft charges during his federal trial in Manhattan

Mizrahi, a wealthy entrepreneur who flaunted his lavish lifestyle on Instagram, was initially arrested in 2022

Mizrahi is the founder of Las Vegas internet provider firm LV.net, which he launched in 1994 in the early days of the internet.

A attorney for Mizrahi did not immediately respond to a request for comment from DailyMail.com on Tuesday afternoon.

However, he had previously insisted he was innocent of any wrongdoing, telling KLAS-TV that he was not involved in any illegal scheme.

'I can unequivocally state that I did not commit any of the acts of fraud alleged in the indictment,' Mizrahi said in January.

'The funds transmitted to me were simply payment in consideration for Bitcoin. At the time, I fully believed the funds that were wired to me were from a legitimate source and I had no reason to believe otherwise,' he added.

'Later, I learned that the origin of the funds was compromised and potentially the product of criminal activity,' Mizrahi claimed. 

But a trial, a jury found that prosecutors proved key charges against Mizrahi beyond a reasonable doubt.

'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,' said US Attorney Damian Williams in a statement.

'Martin Mizrahi brazenly used his company as a front to launder millions of dollars in drug and fraud proceeds and to deceive credit card companies into processing additional millions of dollars in sham charges,' added Williams.

Mizrahi is pictured with his parents in Las Vegas. He had previously insisted he was innocent of any wrongdoing in the case

Prosecutors say Mizrahi used Bitcoin to launder $3 million stolen from a New York non-profit, as well as drug money on behalf of members of an unnamed Mexican cartel

Prosecutors say that from February to June of 2021, Mizrahi participated in multiple schemes to defraud banks and credit card companies, and to launder cartel drug money in addition to the proceeds of the fraud.

One scheme involved brazen theft from companies using a fraudulent email scheme, according to the indictment.

The scam involved sending emails that appeared to be from a legitimate sender within an organization, requesting payments be re-directed to accounts controlled by the conspirators.

One victim of that scheme was a New York City-based non-profit organization that had more than $3 million dollars stolen from it by hackers, according to prosecutors.

Prosecutors say those funds were laundered by Mizrahi alongside cartel cash, by converting the funds to Bitcoin and sending them to anonymous cryptocurrency wallets provided to him by co-conspirators.

In addition, Mizrahi was convicted of running nearly $8 million in fraudulent credit card charges through his company.

Those charges were run on multiple credit cards issued in the names of third parties, some of which had been stolen, and without any legitimate work being done or services being provided, prosecutors say.

Mizrahi was convicted on charges including conspiracy, wire fraud, bank fraud, money laundering and identity theft. 

He faces up to 127 years in prison at sentencing.