LOS ANGELES – The lead defendant in a federal case against a sophisticated identity-theft ring that defrauded several victim financial institutions out of millions of dollars was sentenced on Monday to over six years in prison followed by five years of supervised release.
Lei Chen, 51, of Pasadena was sentenced by United States District Judge Michael W. Fitzgerald. Chen was further ordered to pay restitution to eight victim financial institutions – American Express, Bank of America, Barclays, Capital One, Chase Bank, Citigroup, Discovery, and U.S. Bank – in the amount of $2,725,451.96.
Chen pled guilty in 2016 to conspiracy to commit wire fraud and bank fraud and aggravated identity theft. The conviction for aggravated identity theft required the Court to impose a mandatory, consecutive term of 24 months’ imprisonment in addition to the custodial sentence for the fraud conspiracy.
Chen, known by the moniker “Uncle Chen,” was the leader of a large criminal organization that engaged in extensive credit card fraud and identity theft in Los Angeles and Orange Counties. According to court records, as part of their fraud scheme, defendant and his co-conspirators obtained personal identifying information (such as names, dates of birth, and social security numbers) of the victims for the purpose of obtaining credit cards in those identity theft victims’ names. Chen’s subordinates contacted credit agencies and financial institutions to change the victims’ addresses to “drop addresses,” that is, locations controlled by the organization. Co-conspirators working for Chen then applied for credit cards in the names of the victims and picked up the cards once they were delivered to the drop addresses.
In addition, Chen’s organization sent “shoppers” – i.e., impersonators who pretended to be the identity theft victims – to retail stores where they used the fraudulently obtained credit cards to purchase luxury goods. The shoppers’ purchases included Rolex watches, iPhones, Van Cleef & Arpels jewelry, and Chanel purses. Those purchases totaled millions of dollars resulting in millions of dollars in loss to the victim financial institutions that issued the credit cards.
The remaining three defendants charged in this case – Cynthia Li, Hsiang-Chi Yi, and Richard Wang – are scheduled for trial on September 25, 2018.
This case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Terrence P. Mann of the Santa Ana branch office.