Theodore man admits to ‘sophisticated’ cryptocurrency scheme netting $210,000
By Brendan Kirby
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MOBILE, Alabama (WALA) — A Theodore man awaiting sentencing on fraud charges admitted Tuesday that he orchestrated a separate scheme involving cryptocurrency and stolen identities from the dark web.
Sean White. 29, pleaded guilty to wire fraud, admitting that he reaped more than $200,000 through the “sophisticated” scheme from December 2020 to about March 2022. He faces up to 20 years in prison, but prosecutors have agreed to recommend the minimum punishment called for under advisory sentencing guidelines.
According to White’s written plea agreement, the “Coinbase scam” started with the purchase of stolen identities from dark web marketplaces. For each stolen identity, he admitted, he opened a bank account and an account with Coinbase, a online platform for trading cryptocurrency.
White picked banks that allowed customers to overdraw their accounts by as much as $35,000, according to the plea document. He would withdraw cash up to that limit and deposit the funds in the Coinbase account to make cryptocurrency trades.
If White lost money on the trades, the bank took the loss. If he made money on the trades, he resettled the overdrawn account and then siphoned off the profits into different accounts he controlled, according to the plea agreement.
The plea document cites an example from August 2021. White created a Coinbase account and a PNC Business bank account, along with a PayPal account using the actual name, address, date of birth and Social Security number of a person identified as G.B. White then overdrew the bank account by $35,000 and transferred the money to the Coinbase account in G.B.’s name.
White used that account to buy cryptocurrency, which he then traded. The plea agreement indicates that he made money off of the transaction and transferred $1,000 in August 2021 from the Coinbase account to the PayPal account in the same victim’s name. From there, he transferred that money to his own PayPal account and then to his personal bank account at JP Morgan Chase.
White obtained at least $210,000 in fraudulently obtained proceeds, according to the plea agreement.
U.S. District Judge Kristi DuBose set sentencing for March 8, the same date the defendant will be sentenced in a bank fraud case. He admitted in March that he stole mail as a part of a scheme to steal tens of thousands using forged and counterfeit checks.
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