Owings Mills Man Sentenced to Three Years in Federal Prison for a Fraudulent Gift Card Scheme

Baltimore, Maryland – U.S. District Judge Deborah K. Chasanow sentenced Yong Chen, age 34, of Owings Mills, Maryland, yesterday to three years in federal prison, followed by three years of supervised release, for conspiracy to commit wire fraud related to a fraudulent gift card scheme resulting in $561,000 in losses to more than 10 victims.  Chen was also ordered to pay restitution of $169,950.

The sentence was announced by United States Attorney for the District of Maryland Erek L. Barron; Colonel Roland L. Butler, Jr., Superintendent of the Maryland State Police; and Special Agent in Charge Andrew McKay of the Treasury Inspector General for Tax Administration (“TIGTA”) Mid-Atlantic Field Division.

According to Chen’s plea agreement, Chen managed a scheme to fraudulently obtain gift cards from retail stores, which he and his co-conspirators used to purchase high-end electronics, including cell phones, iPads, and laptop computers.  For example, victim R.E.S., a resident of Hampstead, Maryland, responded to an email claiming that a technical support service contract would automatically renew unless the victim cancelled the service by calling the number listed in the email.  R.E.S had never subscribed to such a service, but he called the phone number to make sure it would not be renewed. 

As detailed in the plea agreement, the man who answered the call had a heavy accent that R.E.S could not understand, so he gave the phone to his daughter.  The man identified himself as “Brian,” and explained that R.E.S was entitled to a $300 refund.  If the daughter would download a computer application which would give “Brian” temporary control over the computer, he would directly deposit the $300 into R.E.S.’s bank account.  After the daughter downloaded the application and opened her father’s bank account, the daughter typed $300 as “Brian” had instructed, but the amount somehow appeared as a $3,000 deposit into R.E.S’s bank account. 

To fix the purported overpayment, “Brian” asked the daughter to go to a Target store to buy Target gift cards to reimburse him.  After unsuccessfully using credit cards to buy gift cards at Target and Best Buy (R.E.S’s bank would not authorize the transactions), the daughter cashed a check at her father’s bank, then used the cash to buy five $500 Target gift cards for a total of $2500.  The daughter then gave “Brian” the gift card numbers and access codes printed on the back of each gift card.  To make up for the remaining balance of $100 still allegedly owed to “Brian,” the daughter purchased an Amazon gift card.  Using the application again, “Brian” accessed her computer, obtained the Amazon gift card number from her email, then deleted all traces of the email from her email account. 

The next day, R.E.S. met with a customer service representative at his bank and learned that he had been defrauded, because “Brian” had never actually deposited money into his bank account.  Instead, using the downloaded computer application to access his bank account, “Brian” had transferred money from R.E.S’s credit card account into his checking account, thereby setting up the withdrawal of cash to pay for the gift cards.  The fraudulent scheme was reported to the Maryland State Police Computer Crimes Unit (“MSPCCU”), which initiated an investigation. 

As detailed in the plea agreement, transactional records and video footage from Target revealed that the five gift card numbers and access codes purchase by R.E.S. were used that same day at three different Target stores in two different states.  For example, less than an hour later, Young Chen used two of the cards to purchase two Apple watches at the Target store in Owings Mills.  At the same time, co-conspirator Bin Tang was using the numbers of the other three gift cards to purchase Apple watches at a Target store in Dumfries, Virginia and later at a different store in Glen Allen, Virginia.  Target security personnel discovered that they had more video footage of Chen at the Owings Mills store using different gift cards on February 12, 2020 to purchase two iPads and other Apple products and an attempted purchase of similar products on February 14, 2020. 

A search warrant was executed at Chen’s house in Owings Mills, Maryland on March 3, 2020.  Law enforcement recovered four boxes containing new high-end electronics, including dozens of iPad tablets and Apple watches that were purchased with proceeds of the fraud scheme.  A notebook that served as a ledger for the gift card scheme was found in Chen’s bedroom and contained the dates that gift cards were fraudulently obtained and how they were redeemed, including the names of the people Chen and co-defendant Bin Tang paid to use the cards.  The purchased electronics were intended to be sold to foreign buyers.  The notebook also listed the projected profit for each product purchased.  Cell phones belonging to Chen and Tang were seized and subsequently searched, revealing messages on a Chinese messaging platform among Chen, Tang and Liang Liang Zeng discussing the scheme.

According to his plea agreement, Chen used the message platform to acquire the stolen gift card numbers and access codes, and then shared that information with others involved in the scheme.  He regularly purchased the stolen gift card numbers through his bank account in China at a price that is about 20% less than the value preloaded on the cards, so a $100 gift card cost him $80.  Chen said that the stolen gift card numbers he purchased had to be redeemed that same day, sometimes within hours, before the cards got canceled.  Chen also provided his buyers, also referred to as “runners,” with Target employee numbers (Target Team Member Numbers) to display at the cash register to get a ten percent employee discount, which increased the scheme’s profit margin.  He and the “runners” he hired would go to multiple stores during the same day, sometimes in different states, because Target might limit the amount of purchases.  Each runner was told what type of product to buy with the numbers based on a price list Chen and Tang received from potential buyers overseas.  The messages also showed that the runners shared information with Chen and Tang throughout the day about the remaining balances on their cards and any trouble they were having redeeming them.  At the end of the day, the runners brought the receipts and the products to Chen’s house, where products were boxed and labeled for shipment overseas.    

According to the plea agreement, dozens of victims in many different states were defrauded and the cards purchased by the victims were primarily redeemed in the mid-Atlantic region to illegally purchase approximately $561,000 of Target products.

Co-defendants Liang Liang Zeng, age 58, a Chinese national residing in Staten Island, New York, and Wen Fu Zeng, age 55, of Brooklyn, New York were sentenced to 54 months in federal prison and to 10 months in prison, respectively, for their roles in the fraud scheme.  Both defendants were also ordered to pay restitution of $145,228 and L. Zeng was ordered to forfeit $43,633.  Bin Tang, age 33, is a fugitive.                    

United States Attorney Erek L. Barron praised the Maryland State Police and TIGTA for their work in the investigation.  Mr. Barron thanked Assistant U.S. Attorney Martin J. Clarke, who prosecuted the case.

For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao-md and https://www.justice.gov/usao-md/community-outreach.

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