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Man Sentenced for Bitstamp Cryptocurrency Fraud Scheme
A 37-year-old Sugar Land resident has been sent to prison for his role in a Bitstamp cryptocurrency fraud scheme that obtained over $500,000, according to authorities in Texas. Xiaofei Chen pleaded guilty to aggravated identity theft in connection with the scheme on October 12, 2023.
U.S. District Judge Alfred H. Bennett has ordered Chen to serve 24 months in federal prison, followed by one year of supervised release. Chen apologized for his actions and expressed regret during the hearing.
The scheme involved Chen obtaining the name, driver’s license, and banking account of a known victim and using that information to arrange a fraudulent wire transfer of $520,000 from the victim’s checking account. Chen then opened a Bitstamp cryptocurrency exchange account using the victim’s information and converted the proceeds into Bitcoin.
Bitstamp is an online currency exchange where individuals can convert monies into Bitcoin and other cryptocurrencies. Chen used the Bitstamp and other cryptocurrency accounts to launder the Bitcoin through numerous transactions.
The FBI conducted the investigation, and Assistant U.S. Attorneys Christian Latham and Belinda Beek prosecuted the case.
In a statement, U.S. Attorney Alamdar S. Hamdani said, ‘The emergence of cryptocurrency has revolutionized finance, but has also provided a new playground for identity theft and financial fraud.’
Chen will be permitted to remain on bond until he surrenders to a U.S. Bureau of Prisons facility in the near future. The case serves as a reminder of the importance of protecting personal information and being cautious when using online services.
Mandatory Facts:
Defendant: Xiaofei Chen
Criminal Charges: Aggravated identity theft
City and State: Houston, Texas
Date: October 12, 2023
Sentence: 24 months in federal prison, followed by one year of supervised release
Dollar Amount: $520,000
Key Facts
- State: Texas
- Category: Cybercrime
- Source: DOJ Press Release â†â€â€
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