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 to over 6 years in prison followed by 5 years of supervised release.
Lei Chen, 51, of Pasadena, was further ordered to pay restitution to eight victim financial institutions; American Express, Bank of America, Capital One, Chase Bank, Citigroup, Discovery, and U.S. Bank in the amount of $2,725,451.96. According to U.S. Attorney’s Office.
The identity theft ring leader pled guilty in 2016 to conspiracy to commit wire fraud, bank fraud and aggravated identity theft. The conviction for aggravated identity theft required the federal court to impose a mandatory, consecutive term of 2 years imprisonment in addition to the custodial sentence for the fraud conspiracy.
Chen, known by the moniker “Uncle Chen,” was the leader of a 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 social security numbers, names, dates of birth and mailing addresses of the victims for the purpose of obtaining credit cards in those identity theft victim’s names.
Chen’s subordinates contacted credit agencies and financial institutions to change the victim’s addresses to “drop addresses,” that is, locations controlled by the gang. Co-conspirators working for Chen then applied for credit cards in the names of the victims and picked up the credit cards once they were delivered to the drop addresses.
Also, Chen’s gang sent shoppers who pretended to be the identity theft victims to retail shops where they used the fraudulently obtained credit cards to purchase luxury goods. The shopper’s purchases Rolex watches, iPhones, Van Cleef & Arpels jewelry, and designer 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.