Sugar Land man attempted fraud of $520K, to convert to Bitcoin

HOUSTON - Xiaofei Chen, 37, was sentenced to prison for aggravated identity theft in connection with a scheme to fraudulently obtain money, said U.S. Attorney Alamdar S. Hamdani.

The 37-year-old from Sugar Land pleaded guilty on Oct. 12, 2023, after he tried to obtain more than $500,000 through identity theft. He was sentenced to two years in federal prison, to be followed by one year of supervised release. 

U.S. District Judge Alfred H. Bennett gave the sentencing and during the hearing, Chen apologized for his criminal conduct and expressed regret for his actions.

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"The emergence of cryptocurrency has revolutionized finance, but has also provided a new playground for identity theft and financial fraud," said Hamdani. "Whether the stolen money is counted in dollars or bitcoins, the Southern District’s prosecutors will aggressively prosecute identity thieves and fraudsters and not rest until the offenders are behind bars."

According to court records, Chen got the name, driver’s license, and banking account details of someone known to him. He then planned a fraudulent wire transfer of $520,000 from that person’s checking account and without their consent, used their information to open a Bitstamp cryptocurrency exchange account.

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U.S. Attorney's Office says Bitstamp is an online currency exchange that allows people to convert currencies into Bitcoin and other cryptocurrencies.

Chen reportedly used Bitstamp and other cryptocurrency accounts to convert the money into Bitcoin. Afterward, he laundered the Bitcoin through numerous transactions.

Authorities say Chen has been allowed to remain on bond and is expected to voluntarily surrender to a U.S. Bureau of Prisons facility.