Rochester man gets 51 months for fraud schemes and money laundering conspiracy
Timothy Wadsworth was sentenced after being convicted of conspiracy to commit wire fraud and money laundering. Prosecutors say his schemes covered unauthorized card charges, pandemic loans, unemployment benefits and romance fraud, with losses of about $2,059,893.
Timothy Wadsworth, 35, of Rochester, New York, was sentenced to 51 months in prison by US District Judge Frank P. Geraci, Jr., the US Attorney's Office for the Western District of New York said on 23 October 2026. Wadsworth was convicted of conspiracy to commit wire fraud and money laundering. He was ordered to pay $810,965.19 in restitution and to forfeit $810,956.19, which the office said represents the wire fraud proceeds he received.
According to the US Attorney's Office, between 10 March 2020 and 15 May 2020 Wadsworth used credit card account numbers obtained from co-conspirators to process unauthorized charges through a Stripe account. He then transferred funds from his bank accounts to his Coinbase account, purchased Bitcoin with the money and sent it to external addresses.
The office said the wider conspiracy ran from March 2020 to September 2021. It included false Economic Injury Disaster Loan (EIDL) and Payroll Protection Program (PPP) applications, about $65,896 in unemployment benefits he was not eligible for, and a romance scam in which a widowed victim wired $42,000 to his account in March 2020. Six other victims lost $26,000. The office put the actual and intended losses at about $2,059,893.
The FBI, IRS Criminal Investigation, the New York State Department of Financial Services and the New York State Department of Labor investigated the case.
Why it matters to AML professionals
Small-scale fraudsters often run several schemes at once and move the proceeds through the same accounts, payment processors and crypto exchanges. AML professionals who look at a customer's full activity, rather than one alert at a time, are more likely to see the connection between card fraud, benefit fraud and scam payments. The conversion of fraud proceeds to Bitcoin and transfer to outside wallets is a common last step before the money is hard to trace.
Red flags in this case
- A merchant account processes many card payments that are later disputed or reported as unauthorized
- A personal or small business account receives government benefit or loan payments alongside payments from unrelated individuals
- Funds arriving from a payment processor are moved quickly to a crypto exchange and then out to external wallets
- A customer receives a large wire from an older or recently bereaved person with no clear relationship or purpose
If this landed in your queue
- Review all incoming sources of funds on the account, including processor settlements, government payments and person-to-person transfers
- Check the merchant's chargeback and dispute history and compare its card volume with its stated business
- Trace outgoing transfers to crypto exchanges and request information on the destination wallets where possible
- Document the combined pattern and escalate for a suspicious activity report if the activity is not explained
Key terms
- Restitution
- Money a court orders a defendant to pay back to victims for their losses.
- Forfeiture
- A court order taking money or property that came from, or was used in, a crime.
- Payment processor
- A company that handles card payments on behalf of merchants and settles the funds into their bank accounts.
Interview angle
A customer's account shows card processor deposits, pandemic loan funds and wires from individuals, all moved to a crypto exchange. How would you approach it?
Explain that you would review every source of funds together, check whether each is consistent with the customer's profile, trace the outflows to the exchange and wallets, and escalate for a SAR if the activity cannot be explained.
Sources
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