How do I handle cheating?

Ok so my best friend John 6 months ago tells me he is into this girl, named Carla. Carla was my best lady friend and John is my best guy friend, so I thought this was a match made in heaven. I told John that Carla was a good girl with great family and moral values. I was definitely wrong! It turns out that they both end up going out for 4 months and during those months Carla cheats on him twice with two different guys. I was told by a good source that she slept with both of those two guys, but not with John. I got together with my other good friends and we told John that she cheated on him, but he, to this very moment, is in denial. He knows she did that but finds ways to try to find nothing wrong with it. Carla was a good friend of mine for 3 years and this takes me by surprise. Should I confront her about it and tell her I can't be friends with her anymore, or should I do something else?

BTW I see her everyday in school so it's hard to forget or do nothing.