Texas Police have cleared Guo Xing Chen of involvement in the data breach that stole private information from credit cards of 40 million customers of the US retail store, Target.

Police in Georgetown, Texas initially arrested Chen on December 12, 2013 at a local Target store with charges of credit card abuse. Chen had reportedly tried to purchase $700 US worth of gift cards with several stolen credit cards in both Georgetown and nearby Temple, Texas the day before.

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Chen is also a suspect in a similar case of credit card abuse in a Target store in Round Rock, Texas. Several of the stolen cards were later recovered in the bathroom of a Georgetown restaurant, Firehouse Subs.

Officers were also notified that Chen had an outstanding arrest warrant in Arkansas on charges of fraudulent use or possession of identifying information. Both charges are considered felonies.

The Texas police department said in a court affidavit signed earlier this week that Chen was a suspect in the customer records swiping and credit breach believed to be in excess of US$70 million from Target Corp.

But late Wednesday evening, the department suddenly recanted their original affidavit with a statement to the press clearing the 40 year-old Chen, who has been tentatively identified as a Texas native, of all involvement in the Target credit breach.

Georgetown police said they have no reason to believe the credit information Chen used was obtained in the Target cyberheist. 

Target Corp. had discovered in mid-December that over 40 million customers had their credit and debit card information stolen from the company's database.  In January, 70 million other Target customers had their e-mail addresses and phone numbers stolen.

As a result of the data breach, Target sales went down 46% during the holidays and the retail company was reported to have lost US$61 million in expenses and insurance. Avivah Litan, security analyst at technology firm Gartner, estimates the actual full cost of the breach to be in excess of US$400 million.

Target CEO Gregg Steinhafel turned in his resignation on Monday after 35 years of service with the discount retailer.

TagsGuo Xing Chen, Target, Data breach, Gregg Steinhafel, John Mulligan, Credit Card, Fraud, Cyberheist, Theft