Rochester Man Gets 51 Months for Fraud That Funded Bitcoin Transfers

A Rochester, New York, man has been sentenced to 51 months in federal prison for a fraud conspiracy that routed unauthorized credit-card payments through bank accounts before financing bitcoin purchases. Timothy Wadsworth, 35, was convicted of conspiracy to commit wire fraud and money laundering, federal prosecutors announced on October 23.

U.S. District Judge Frank P. Geraci Jr. ordered Wadsworth to pay $810,965.19 in restitution. He was separately ordered to forfeit $810,956.19, which the U.S. Attorney’s Office for the Western District of New York identified as proceeds he received from wire fraud.

The card-payment activity involved account numbers supplied by co-conspirators, prosecutors said. Between March 10 and May 15, 2020, Wadsworth attempted to process 310 payments totaling $1,673,578 through a Stripe account. Of those attempts, 116 initially succeeded, totaling $730,728.22, despite the account holders not authorizing the charges.

Wadsworth moved proceeds from Stripe into accounts he owned at HSBC and Evolve Federal Credit Union, according to the sentencing announcement. He then transferred a portion to his Coinbase account, bought bitcoin and sent the cryptocurrency to external addresses belonging to co-conspirators.

Prosecutors said transactions in the sequence often exceeded $10,000. They cited three transfers from Stripe to Wadsworth’s HSBC account between April 22 and April 28, 2020, for $49,419.99, $45,501.85 and $53,496.75. The account described a movement of fraud proceeds across payment-processing, banking and cryptocurrency services.

The prosecution extended beyond unauthorized card charges. Between May 2020 and May 2021, Wadsworth and others submitted nine false Economic Injury Disaster Loan applications containing misrepresentations about business revenue and operations. Three applications were approved, producing $161,200 in payments to his bank accounts.

Wadsworth also applied for six Paycheck Protection Program loans totaling $91,219 during March and April 2021. Two applications resulted in payments of $20,833 and $20,416. Separately, prosecutors said he fraudulently collected approximately $65,896 in unemployment benefits while ineligible to receive them.

A romance-fraud scheme brought another victim’s money into Wadsworth’s account. A recently widowed woman met someone on Facebook who claimed to be an oil rig worker and requested money for travel to the United States. She wired $42,000 to Wadsworth’s account on March 20, 2020.

Six additional victims lost a combined $26,000 through his schemes, prosecutors said. Across the conduct, which ran from March 2020 through September 2021, authorities calculated approximately $2,059,893 in actual and intended losses. That figure includes attempted fraud, rather than solely money successfully obtained.

The sentence leaves Wadsworth facing imprisonment alongside the restitution and forfeiture orders. The sentencing announcement does not specify a timetable for recovering those amounts or distributing restitution, leaving the extent and timing of financial recovery for victims unclear.