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SALT LAKE CITY — Two people are serving federal prison time for their participation in a gift card and wire fraud scheme based in Utah that cheated victims, some of them elderly, out of thousands of dollars.
Chaohui Chen, 46, was sentenced Monday to 21 months imprisonment followed by 36 months supervised release, district court records show. Wenyi Zheng, 46, was sentenced Monday to 36 months imprisonment followed by 36 months supervised release. They were also ordered to pay $217,200 each in restitution.
Chen and Zheng each pleaded guilty to a count of wire fraud, district court records show. In exchange for the pleas, prosecutors dismissed an additional count of wire fraud and a count of conspiracy to commit wire fraud for both Chen and Zheng.
In June 2019, Chen and Zheng were involved in a Walmart gift card conspiracy and wire fraud scheme, according to a news release from the United States Attorney's Office for the District of Utah.
"The purpose of the scheme was to defraud individuals and obtain money and property for the personal gain of the defendants and others," the news release states.
A typical execution of the scheme involved unnamed third parties who would make fraudulent phone calls, sometimes claiming to victims that they were part of the Social Security Administration, the news release continues. The callers would convince victims to purchase prepaid gift cards and give them the 16-digit gift card numbers and unique pins in return for a cashier's check in the amount of the gift card purchase.
However, once in control of the gift cards, Chen and Zheng, both foreign nationals, redeemed them at various stores for household items and additional gift cards, "which they would convert and use for their own personal gain, and neglect to return any of the money to the victims."
Additionally, Chen and Zheng used interstate wire communications facilities throughout the scheme for the purposes of carrying out the crime, the news release states.
"The United States Attorney's Office is committed to working with our law enforcement partners to investigate people who prey on vulnerable members of our community," said United States Attorney Trina A. Higgins in the news release. "It is our job to pursue justice for victims, some of whom are elderly and trusted those who committed this crime."
