A woman who for years went by the name "Bitcoin Maven" on localbitcoins.com —a peer-to-peer website for buying and selling anonymous bitcoins in person—was sentenced Monday to 366 days in federal prison, three years of supervised release, and a $20,000 fine.

While selling bitcoins is not inherently illegal, doing so in such large volumes without keeping extensive records to mitigate money laundering is.

Federal prosecutors in Los Angeles called the case against Theresa Lynn Tetley—a 50-year-old former stockbroker who bought and sold several million dollars' worth of bitcoins—the first of its kind in the region.

Authorities began intensely investigating Tetley starting in 2016 when, unbeknownst to her, she met with an undercover female agent from the Drug Enforcement Administration. When the DEA agent told Tetley she wanted to stay anonymous, Tetley readily agreed.

Eventually, Tetley was introduced to the woman's "boyfriend," who was also an undercover agent. Over the next several months, the boyfriend conducted increasingly large transactions with Tetley, at one point specifically saying that he possessed a supply of "coke, meth, and weed" that had recently been "stolen."

These deals eventually came to a head in March 2017, when Tetley brought $300,000—held in two Trader Joe's paper grocery bags—to buy an equivalent amount of bitcoins from the fake boyfriend. Tetley was arrested immediately and eventually pleaded guilty to money laundering.

Tetley was known to do business with William James Farber, who was arrested last year. Authorities believe he was behind one of AlphaBay’s largest drug rings. Tetley only knew Farber as "David" or "Pirate Shit," according to government filings.

"These circumstances show that defendant knew something was awry, as 'David' coveted that she operated entirely outside of the regulated financial market, that she offered privacy and anonymity, and that she could sustain a high level of business for him," prosecutors wrote in a June 2018 sentencing memorandum. This is also when they asked the judge to impose a 30-month sentence.

"Providing cash in envelopes (and in the significant amounts she did), in coffee shops and restaurants, is no way to conduct legitimate business, certainly when that volume exceeds the millions and someone such as defendant—a former stockbroker and real estate investor—was certainly aware of that."

Tetley must also forfeit nearly $300,000 in cash, 25 gold bars, and 40 bitcoins worth about $255,000 as of Tuesday afternoon.

UPDATE 7:18pm ET: Brian Klein, Tetley's attorney, emailed Ars to say: "The sentence Theresa received represents a huge departure from what the prosecutor was seeking, chopping it down by essentially two-thirds. Although we had hoped for a probationary sentence, we are pleased the judge made such a dramatic departure, and in so doing, we believe he validated points we raised and rejected those of the prosecutor."