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Office of Investigations | Case Highlights

Trying to Slide Fraud Under USPS’s Radar? Not Today

Date: 02/14/24 | Category: Contract Fraud

Even with a workforce of over 635,000 employees, the Postal Service must rely on contractors to satisfy its massive business and operational needs. Each year, USPS spends hundreds of millions of dollars on facility maintenance and repairs alone, and using contractors is key. And while the incidences of contract fraud are few compared to contracts honored, investigating such violations remains one of the core tenets of our work.

This January, our specialized in-house analytics prompted an allegation into a Pennsylvania-based contractor who had performed over $1.7 million in facilities work for the Postal Service since 2015. The following month, our special agents served the owner an OIG subpoena for business records, many of which were filled with telltale signs of fraud.

The review of over 120 invoices showed the owner inflated his labor hours by clocking in when he left his residence rather than when he arrived at a USPS facility. And that wasn’t all: he often reported using more employees on site than were present. He also failed to report subcontractors and labeled all equipment as company owned when in fact, he at times rented it. This went on for the better part of 2022, and our special agents determined a 26 percent fraud rate and estimated losses to the Postal Service of almost $127,000.

The owner agreed with the findings of our investigation, signed a settlement agreement, and agreed to make restitution to USPS for the estimated losses. Last October, the owner and his company were both suspended and debarred from doing government business for four years.

Fraudsters give honest, hardworking contractors a bad name. If you suspect or know of fraud involving Postal Service contractors or employees, please report it to our Hotline.

About the USPS OIG’s Investigative Analytics

In addition to conducting and publishing valuable research on a myriad of postal topics, our Research and Insights Solution Center (RISC) plays an important part in the OIG’s investigative work by providing our special agents with in-house analytics tools and data. As one of the nation’s most technologically advanced OIGs, our Office of Investigations leverages RISC assets to identify postal crimes and bring their perpetrators to justice. You can learn more about RISC’s important work here.