Sugar Land man sentenced for cryptocurrency scheme that involved him laundering over $500,000

Xiaofei Chen appeared in U.S. District Judge Alfred H. Bennett’s courtroom and apologized for his crimes, which involved him fraudulently acquiring the name, driver’s license and bank account information of someone and arranging a wire transfer of $520,000 from their checking account, a Justice Department news release said.

Chen then opened a Bitstamp cryptocurrency exchange account using the person’s information without their consent, the U.S. Attorney’s Office said. Through Bitstamp, an online currency exchange headquartered in London, Chen was able to convert the stolen money into Bitcoin and other cryptocurrencies.

Once converted, Chen laundered the Bitcoin through various transactions, according to the U.S. Attorney’s Office. With the money, he made luxury purchases, including a $59,000 Jeep Wrangler and a $78,000 Audi RS5, court documents show. 

Bennett allowed Chen to remain out of custody and voluntarily surrender to a U.S. Bureau of Prisons facility that will be decided at some point. 

If Chen had been convicted on all initial charges, he could have received between 10 to 30 years in prison. The plea agreement he signed in October waived the other charges, according to court documents.