Contract fraud is a big problem for the federal government and quite possibly for the U.S. Postal Service, which currently manages over 20,000 contracts worth $29 billion. Conservative business estimates project up to 5 percent of contracted dollars are lost to fraud, meaning $1.45 billion of Postal Service funds are potentially at risk.

Detecting, stopping, and preventing fraud is a core mission of the Office of Inspector General (OIG) and we need your help. We’ll be using this blog to introduce some common fraud schemes and their warning signs. You don’t need special skills or a badge to fight contract fraud — just know the warning signs and alert the OIG when you see them.

Scheme of the Week: False Claims or False Statements

With false claims or false statements, a contractor knowingly submits a fraudulent invoice for payment or approval. This includes over-billing, certifying that a product or service meets specifications when it does not, and providing fraudulent documentation, as well as situations where a Postal Service employee knows a claim is false but processes or authorizes it anyway.

In one case, an OIG investigation uncovered a phantom cleaning business used in a scheme to fraudulently bill the Postal Service for cleaning services never rendered. In another, a Highway Contract Route contractor submitted more than 337 false or fraudulent fuel use certifications, trying to get paid for unused fuel. The Postal Service recovered $970,000 through a settlement with the contractor and refused to pay an additional $284,000 in improper claims.

What to watch for:

Documents supporting supplier invoices are inadequate or obviously altered
Invoiced quantities and prices differ from contract terms
Delivered goods and services do not match invoices
Quality of goods or services is poor
Test or inspection documentation isn’t provided or is determined not to exist when requested
Discrepancies exist between test results and inspection results
Supplier repeatedly acknowledges errors when questioned about discrepancies in contract documentation
Supplier provides a product or service that doesn’t conform to contract specifications with no variance or requested/approved change

When to contact the OIG

While the warning signs above don’t necessarily mean fraud is occurring, they do warrant further investigation. If you notice these signs, please contact the OIG Hotline, which accepts confidential and anonymous complaints.

Do you have any thoughts on preventing and identifying contract fraud, or getting our message out? Let us know in the comment section below!

This is the beginning of a series of contract fraud topics hosted by the OIG’s Major Fraud Investigations Division.

Comments (10)

  • anon

    this person called me on my advertised sale of a chainsaw, he mailed me a check from a bank in the amount of 1650.00 for a $300 purchase, i was to mail the balance to an undisclosed person or place upon my cashing their check..advise me on what to do with this situation, thank you

    Oct 17, 2016
  • anon

    Ivy, I live in the neighborhood and you probably are not getting your mail due to the barracades and signs that tell the mail delivery person not to cross due to your ongoing strike against the USPS.

    Aug 26, 2011
  • anon

    I really appreciate your post and you explain each and every point very well. Thanks for sharing this information. And I’ll love to read your next post too.

    Aug 11, 2011
  • anon

    If your mail carrier keeps samples that is supposed to be delivered ( Gillett Women's Razors ) and takes them home by the dozens, is this considered mail theft?

    Aug 08, 2011
  • anon

    Yes, that would be mail theft. Please contact our office at 1-888-USPS-OIG or file a complaint online at https://www.uspsoig.gov/contact.htm.

    Aug 10, 2011
  • anon

    Smart vendors do not need to engage in fraud to bilk the Postal Service. They can do so legally. Look at the mandatory MRO contracts on ebuy, for instance, as an example of vendors overcharging USPS for commodities that are readily available at lower prices elsewhere.

    Aug 05, 2011
  • anon

    This practice is absolutely INCORRECT! So long as the PO Box rent is paid, we hold the mail indefinitely. Please take the initiative to get the correct instruction for handling mail that exceeds the POB capacity. If you need assistance, I may be reached at 623 932 6922. Mishandling mail is what hurts our brand; our customer's talk and our business suffers.

    Jul 27, 2011
  • anon

    Ms. Suzanne replied to a customer getting STREET delivery not PO Box mail. Although the Post Office will keep a PO box customers mail till the rent is up . . . it is NOT indefinitely.

    Jul 29, 2011
  • anon

    There needs to be a reason why your mail is being returned as "refused". I recently had a customer that continuosly would NOT GET HER MAIL OUT OF HER BOX. Policy is that we pull the mail out of box when full, leave a mailbox overflow notice, in which the customer has 10 days to pick up mail, if they dont, there mail is returned as "refused", or "unclaimed". After doing this 3 times, then I have the right to stop delivering there mail, and send it all back as "refused", or "unclaimed". On the mailbox overflow notice, it CLEARLY STATES THAT POSTAL CUSTOMERS HAVE 72 HOURS TO GET THERE MAIL OUT OF THERE MAIL BOX. Just some feedback from a carrier, that is curious as to why your mail is being returned, "refused".

    Jul 26, 2011
  • anon
    Ivy Raschke

    June 28, 2011 Senator Kay Bailey Hutchison, This is day 324 of my strike/protest of the United States Postal Service, government corruption, it’s partnering with fraud and its endorsement of the willful intent of OFHA, Inc. to commit mail fraud via the Oak Forest Post Office. I have not received or sent US mail for 324 days; just 41 days shy of 1 year. I am a United States citizen. Why haven’t I been protected from mail fraud? I have never refused my mail, yet my mail is being ‘returned to sender’ as ‘refused.’ For years we have asked for a United States Postal Inspector Investigation into the mail fraud of OFHA, Inc./Oak Forest Homeowners Association. We have been ignored. I refuse to be a party to government corruption and fraud. I have exercised my Texas and Constitutional Rights of Freedom of Religion. James 4:17, (Holy Bible, God’s Constitution) is my duty, as a Christian and as a citizen of the kingdom of God; it is also my inalienable right. When America’s Founding Fathers framed the Constitution, they guaranteed citizens their inalienable rights with Freedom of Religion, the First Amendment of the Constitution. Inalienable meaning, no man has the authority to take away what God has given. Civil Government has no inalienable rights, only people have inalienable rights. Civil government has powers consented to by the people. Civil powers will never trump inalienable rights. I have never given up my rights; therefore civil government is guilty of aggressively violating the very rights I have been afforded by the highest law in the land, the US Constitution. Quote: “The US Postal Inspectors investigate any crime in which the US MAIL is used to further a scheme- whether it originated in the mail, by telephone or on the internet. The use of the US MAIL is what makes it fraud.” The United States Postal Inspector also states: ALL AMERICANS have the right to mail and receive letters and parcels with every expectation that no one will tamper with or steal their mail. ALL USERS of the mail have the right to be protected from mail fraud and other mail-related criminal activities. …But those rights themselves must be protected. That’s where we come in. We are the United States Postal Inspection Service- the federal law enforcement and security arm of the US Postal Service. The Postal Inspection Service ensures the safety, security, and integrity of the US MAIL. Our Mission is to safeguard the sanctity of the US MAIL and, in so doing, aggressively combat mail theft and fraud. …If it has anything to do with safeguarding the safety, security, and integrity of the nation’s mail system, from criminal misuse, we do it. And we’ve been doing it- and doing it successfully- since the nation was founded more than 225 years ago. Then why am I on day 324 of my strike/protest of the United States Postal Service? Why are the United States Postmaster General and the United States Postal Inspector defying truth and those trying to expose it? Why was this libelous, false statement: “per your request we will be returning all mail addressed to 5322 De Lange Lane, Houston, Texas 77092 with an endorsement of ‘refused’ until further notice is provided,” made by the United States Postal Service and why has the United States Postal Service refused to respond to me concerning this? Why are the United States Postmaster General and the United States Postal Inspector turning a blind eye and deaf ear to mail fraud? Why am I being ignored? Below are some of the many emails I have sent to Postmaster General John Potter. Sincerely, Ivy Raschke

    Jul 24, 2011

Share this post


Recent Comments

Monthly Archive