A Rochester man has been sentenced to 51 months in federal prison after unauthorized credit-card payments were funnelled through bank accounts and turned into bitcoin for co-conspirators. Timothy Wadsworth, 35, of Rochester, New York, was sentenced by U.S. District Judge Frank P. Geraci Jr. following his conviction for conspiracy to commit wire fraud and money laundering, the U.S. Attorney's Office for the Western District of New York said in an announcement on October 23.
Source: TokenPost, reporting the U.S. Attorney's Office announcement
He was also ordered to pay $810,965.19 in restitution and to forfeit $810,956.19, described as proceeds he received from the wire fraud scheme.
Source: Bitcoin.com News, reporting the DOJ announcement
310 attempted payments through Stripe
According to his guilty plea, between March 10 and May 15, 2020, Wadsworth used account numbers supplied by co-conspirators to attempt 310 payments totalling $1,673,578 through Stripe, the payment processor used by businesses. Of those, 116 initially succeeded, amounting to $730,728.22. The Justice Department said the account holders had not authorized the transactions.
Funds from Stripe were transferred into accounts Wadsworth controlled at HSBC and Evolve Federal Credit Union. He then moved part of the money to Coinbase, bought bitcoin, and sent it to co-conspirators, prosecutors said, with individual transfers in the sequence often exceeding $10,000.
Pandemic loans and a romance scheme in the same case
The card scheme was one part of a wider set of frauds prosecutors put at about $2,059,893 in combined actual and intended losses between March 2020 and September 2021. They included nine false Economic Injury Disaster Loan applications, three of which paid $161,200 into Wadsworth's accounts; two funded Paycheck Protection Program loans of $20,833 and $20,416; about $65,896 in unemployment benefits; a $42,000 wire from a recently widowed woman in a romance scheme; and $26,000 in losses to six other victims, according to the U.S. Attorney's Office account of the case.
The case shows how stolen card numbers can be cashed out within days — first as ordinary-looking card payments, then as bank transfers, and finally as cryptocurrency that is hard to trace back. If a card payment you never made appears, dispute it with your bank immediately; delays make recovery harder.