When the unit could not find the suspect, they randomly killed Hashim Ibrahim Awad, 52, a father of 11 and grandfather of four who lived next door.
After Hutchins shot Hashim in the head, the squad then set a stolen AK-47 and shovel next to the corpse to suggest he had been planting a roadside bomb.
The prosecutor in the case, Lieutenant-Colonel John Baker, said in closing arguments that Hutchins masterminded “a cold and calculated plan … to take the law into his own hands”.
Hutchins’s lead defence lawyer, Richard Brannon, said that the actions of Hutchins and his men was “a failure of command”, alluding to allegations that their platoon leader’s rough handling of some detainees sent the wrong message to the marines.
Hutchins was cleared of additional charges of kidnapping, assault and housebreaking.
The jury will now begin considering his sentence.
Hutchins is one of seven marines and one sailor charged in the killing of the Iraqi in Hamdania.
A separate military jury on Wednesday found Corporal Marshall Magincalda guilty of larceny and housebreaking, demoted him to private, forfeited all military pay and benefits, and gave him a bad-conduct discharge.
Five members of the squad, including the navy medic, pleaded guilty to lesser charges in connection with the shooting.
A military jury convicted a sixth member, team leader Corporal Trent Thomas, of conspiracy and kidnapping and as well as conspiracy to murder.