A federal court has sentenced Rochester, New York, resident Timothy Wadsworth, 35, to 51 months in prison over a fraud scheme that moved unauthorized card payments through accounts he controlled and then into bitcoin purchases, according to the U.S. Department of Justice.

Prosecutors said the case combined wire fraud, money laundering, and other fraud activity spanning from March 2020 through September 2021. U.S. District Judge Frank P. Geraci Jr. also ordered Wadsworth to pay $810,965.19 in restitution and to forfeit $810,956.19 in wire fraud proceeds.

Unauthorized Stripe payments formed the core of the case

The DOJ said Wadsworth used account numbers provided by co-conspirators to try to process 310 payments through Stripe, a platform used by businesses to handle card transactions. Those attempted payments totaled $1,673,578.

Between March 10 and May 15, 2020, 116 of those transactions initially went through, with a combined value of $730,728.22. Prosecutors said the account holders had not authorized the charges.

Funds moved through bank accounts and on to Coinbase

Court records tied to Wadsworth’s guilty plea on conspiracy to commit wire fraud and money laundering showed that money from Stripe was transferred into accounts he controlled at HSBC and Evolve Federal Credit Union.

From those accounts, he moved part of the proceeds to Coinbase. The DOJ said he then bought bitcoin on the exchange and sent it to co-conspirators. The department said transactions in that payment-to-crypto chain often exceeded $10,000.

Sentence also reflects other fraud conduct

Federal authorities said Wadsworth’s conduct from March 2020 through September 2021 produced about $2.06 million in actual and intended losses across multiple schemes.

According to the DOJ, false applications brought in $161,200 through the Economic Injury Disaster Loan program. Prosecutors also said he received two Paycheck Protection Program loans worth $20,833 and $20,416, and fraudulently obtained about $65,896 in unemployment benefits.

The department further described a separate romance-related scheme in March 2020 in which a recently widowed woman wired $42,000 into Wadsworth’s account after someone posing as an oil rig worker asked for travel money. Six other victims were said to have lost a combined $26,000 through his schemes.

The case fits a broader enforcement pattern

The DOJ’s description places the Wadsworth case within a recurring law enforcement theme: proceeds from conventional fraud are increasingly traced into cryptocurrency purchases and transfers.

The source article pointed to several other prosecutions and warnings, including a 2021 British voucher fraud case in which police later seized more than 48 bitcoin, federal alerts about government-impersonation scams that steer victims toward crypto ATMs and wires, and an Oct. 21 sentencing tied to roughly $14.5 million in drug proceeds allegedly laundered into USDT.

In Wadsworth’s case, the confirmed outcome is the prison sentence, restitution order, and forfeiture judgment announced by the DOJ on Oct. 23 after his conviction on conspiracy to commit wire fraud and money laundering.

Source: news.bitcoin.com