The U.S. Postal Service delivers more than 212 billion pieces of U.S. Mail each year—including money, messages, and merchandise—at some of the most affordable postage rates in the world. U.S. Postal Inspectors are mandated to safeguard all of it—including the people who move it and the customers who use it. And it’s all included in the price of a stamp.
Cover Photos (left to right): Postal Inspector Anne T. Walsh, Los Angeles Division. Photo by Postal Inspector Patricia Smith, Los Angeles Division.
Postal Police Officer Rufus Nelson III, Pittsburgh Division. Photo by Postal Police Supervisor Sgt. St. Clair M. Maynard, New York Division, upon Nelson’s completion of PPO Training Class 2006-01.
Postal Inspector and Public Information Officer at the Los Angeles Division, Renee M. Focht. Photo by Janis L. Carter, U.S. Postal Service, Los Angeles Processing and Distribution Center.
Message from the Chief 2
Fraud and Asset Forfeiture
Mail Fraud 7
Victim-Witness Assistance Program 15
Asset Forfeiture 17
Workers’ Compensation Fraud 18
Money Laundering 18
Revenue Investigations 19
Mail Theft and Violent Crime
Mail Theft 20
Homicides, Assaults, and Threats 24
Financial Investigations 27
Dangerous Mail and Homeland Security 28
Security Force 32
Facility Security 33
Observations of Mail Conditions 33
Personnel Security 34
Natural Disasters 34
Child Exploitation via the Mail 36
Obscenity in the Mail 37
Illegal Drugs and Trafficking 38
Consumer Education, Fraud Prevention, and Legislative Liaison 40
International Affairs 44
Forensic Laboratory Services 49
Technical Services 50
Office of Counsel 52
Investigative Support 53
Criminal Statistics for FY 2006 55
A Message from the Chief Postal Inspector
I am pleased to present the 2006 Annual Report of Investigations of the United States Postal Inspection Service, which is the law enforcement, crime prevention, and security arm of the U.S. Postal Service.
The report is intended to address our key stakeholders: the United States Postal Service, the Postal Service Board of Governors, members of Congress, and the American public.
U.S. Postal Inspectors across the country safeguard more than 200 billion pieces of mail each year. They protect postal employees, postal facilities, millions of dollars in postal assets, and millions of postal customers. In FY 2006, Postal Inspectors arrested nearly 9,000 suspects for crimes involving the mail or against the U.S. Postal Service.
As an active member of the U.S. Department of Justice’s Hurricane Katrina Fraud Task Force, the Postal Inspection Service continues to investigate mail fraud targeting victim benefits. In December 2005, the Inspection Service published a fraud-prevention article, “Crime Watch—Avoiding Hurricane Fraud,” which was distributed nationwide to 204 newspapers with a combined readership of more than 6.7 million.
Postal Inspectors were also asked to lend their unique expertise to Operation Global Con, cited by the Depart- ment of Justice as “the largest and most far-reaching multinational enforcement operation ever directed at mass- marketing fraud schemes.” Postal Inspectors were integral to the success of the operation, which in FY 2006 tallied its results: A total of 96 investigations conducted by U.S. agencies led to the identification of 2.8 million victims, who suffered losses of more than $1 billion. Postal Inspectors contributed to more than 45 of the 96 investigations.
The Postal Inspection Service’s role in helping assure the safety of postal employees and the security of mail and postal assets remains one of its highest priorities. At least 57 percent of Inspectors’ arrests in FY 2006 related to mail theft—a total of 5,060 suspects. Mail fraud investigations also yielded significant results: Inspectors arrested 1,299 mail fraud suspects and responded to nearly 33,000 consumer fraud complaints.
Long regarded as international leaders in the fight against child pornography, Inspectors in FY 2006 arrested 250 suspects, identified and stopped 58 child molesters, and rescued 93 children from sexual abuse as part of the Postal Inspection Service’s continuing efforts to rid the U.S. Mail of child pornography. To keep the mail free of dangerous and illegal drugs, Postal Inspectors arrested 851 suspects for drug trafficking and money laundering via the mail. Inspectors initiated 291 new investigations involving child exploitation, and 734 other investigations are ongoing.
I am particularly proud of our accomplishments this past fiscal year. I pledge to our stakeholders that we will continue to fulfill our mission in ensuring the safety, security, and integrity of the U.S. Postal Service, postal employees, and postal assets, and work to strengthen every American’s confidence in the U.S. Mail.
L. R. Heath
The Smithsonian National Postal Museum, in cooperation with the U.S. Postal Inspection Service, is presenting “Postal Inspectors: The Silent Service,” a new exhibit opening February 2007 and running through February 2009. Shown here in a postcard showcasing the exhibit are (l to r) Investigative Aides Ralph Espina and LeRoy Kingsland (Investigative Aides later were converted to Postal Inspectors). The photo was taken October 28, 1967, when Espina, Kingsland, and Postal Inspector George Ross provided armed escort—note the Thompson submachine gun held by Kingsland—for a registered mail package from Switzerland addressed to Harry Winston Jewelers of New York. The package arrived at LaGuardia Airport containing precious cargo: a stunning 601-carat diamond, known as “the Lesotho Diamond.” Inspectors had learned the Mob planned to hijack the shipment, which had been insured for $1 million. They kept all passengers on the plane until the mail was unloaded and the package pulled out, then drove it—handcuffed to Espina’s wrist—“with flashing lights and siren” safely to the New York City General Post Office. Interestingly, the Lesotho III, a marquise cut of the raw diamond weighing more than 40 carats, was given to Jacqueline Kennedy by Aristotle Onassis in 1968 as an engagement ring. The photo was taken by Postal Inspector George Ross.
As one of our country’s oldest federal law enforcement agencies, founded by Benjamin Franklin, the United States Postal Inspection Service has a long, proud, and successful history of fighting criminals who attack our nation’s postal system and misuse it to defraud, endanger, or otherwise threaten the American public. As the law enforcement, crime prevention, and security arm of the United States Postal Service, the U.S. Postal Inspection Service is a highly specialized, professional organization performing investigative and security functions essential to a stable and sound postal system.
Congress empowered the Postal Service “to investigate postal offenses and civil matters relating to the Postal Service.” Through its security and enforcement functions, the Postal Inspection Service provides assurances to American businesses for the safe exchange of funds and securities through the U.S. Mail, to postal customers of the “sanctity of the seal” in transmitting correspondence and messages, and to postal employees of a safe work environment.
As fact-finding and investigative agents, Postal Inspectors are federal law enforcement officers who carry firearms, make arrests, execute federal search warrants, and serve subpoenas. Inspectors work closely with U.S. Attorneys, other law enforcement agencies, and local prosecutors to investigate postal cases and prepare them for court. Postal Inspectors are stationed throughout the United States and enforce roughly 200 federal laws covering investigations of crimes that adversely affect or entail fraudulent use of the U.S. Mail and postal system.
To assist in carrying out its responsibilities, the Postal Inspection Service maintains a Security Force of armed, uniformed Postal Police Officers who are assigned to critical postal facilities throughout the country. The officers provide perimeter security, escort high-value mail shipments, and perform other essential protective functions.
The Postal Inspection Service operates a National Forensic Laboratory at Dulles, VA. The lab is staffed with forensic scientists and technical specialists who assist Inspectors in analyzing evidentiary material needed for identifying and tracking criminal suspects and in providing expert testimony for cases going to trial. A Forensic Computer Analyst also is assigned to each of the 18 divisions of the Postal Inspection Service.
The Inspection Service’s professional and technical employees, who include forensic specialists, information technology experts, financial analysts, and others, play a vital role in supporting the criminal investigative and security functions of the agency. They perform a wide variety of tasks, including developing and upgrading information systems, providing forensic examinations of evidence, deploying electronic security and surveillance equipment, publishing policy handbooks and consumer-awareness guides, supplying photography and video services, and facilitating direct communications with Congress and the public.
The National Headquarters offices of the Postal Inspection Service are organized in functional groups that report to the Deputy Chief Inspector for Headquarters Operations. The Postal Inspection Service has 18 field divisions, which report directly to three Deputy Chief Inspectors for field operations. Field offices are supported by four Inspection Service administrative service centers. The National Leadership Team includes four Deputy Chief Inspectors, two Assistant Chief Inspectors, Inspectors in Charge, and Postal Career Executive Service Managers.
The Postal Inspection Service’s national information technology infrastructure supports users at nearly 200 sites nationwide. Its offices are linked nationally via a private law enforcement network, with online connections to the Postal Service, the Department of Justice, the Department of Treasury, the National Crime Information Center, the National Law Enforcement Telecommunications System, and the Internet.
The Internal Affairs Division’s mission is to promote integrity and excellence in the Postal Inspection Service through independent internal investigations of its employees and protect the safety of postal employees and customers by providing security and preventative services at National Headquarters.
The Office of Counsel provides legal advice and services in support of Postal Inspection Service investigations, programs, and goals; processes requests for access to Inspection Service records; and provides legal training to Inspection Service personnel. Inspector-Attorneys of the Counsel’s office are supported by an administrative staff that includes one Paralegal, an Information Disclosure Specialist, three Information Disclosure Technicians, two Program Specialists, and a Secretary.
Charged with managing the Postal Inspection Service’s internal and external communications, staff from the Liaison Group issue news and video releases covering investigations or events of national interest and consumer publications with preventive and informational tips related to mail fraud and other mail crime. Liaison Group personnel represent Inspection Service interests on Capitol Hill and in cooperative activities with other government, law enforcement, and consumer agencies. The Liaison Group’s Internet Web site posts investigative news and consumer-oriented tips. Postal customers may report suspected incidents of mail fraud and mail theft online at the site, located at www.usps.com/postalinspectors. An Intranet Web site facilitates confidential employee communications nationwide.
The U.S. Postal Inspection Service extends full cooperation to all federal, state, and local investigative and prosecutive authorities in law enforcement matters to ensure greater protection to the public. Postal Inspectors regularly participate in joint task force investigations with other agencies aimed at curtailing widespread criminal acts of an organized nature.
For more information on the Postal Inspection Service, visit www.usps.com/postalinspectors.
Fraud and Asset Forfeiture
The Mail Fraud Statute is the nation’s oldest and the most effective consumer protection law, and the U.S. Postal Inspection Service is the federal law enforcement agency that uses it to maximum effect.
To increase efficiency in investigating mail fraud, Postal Inspectors lead and participate in several joint law enforcement and consumer group initiatives aimed at safeguarding the public’s confidence in the U.S. Mail. Educating the public about fraud schemes that involve the mail is an essential component of this goal. Postal Inspectors also work cooperatively on joint task force investigations with other law enforcement agencies to leverage resources by maximizing the expertise of each agency.
Postal Inspectors investigated 3,128 fraud cases this past fiscal year, and Inspection Service analysts prepared more than 33,000 letters and informative postcards in response to mail fraud complaints. Inspectors arrested 1,299 mail fraud suspects, and 1,198 were convicted as a result of investigations conducted during FY 2006 and in prior fiscal years.
Operation Global Con
The results of Operation Global Con, an international law enforcement initiative that targeted mass-marketing fraud with international impact, were announced on May 23, 2006. The initiative was coordinated by the Department of Justice and included cooperation from numerous federal, state, local, and foreign law enforcement and regulatory agencies.
Postal Inspectors were integral to the success of the operation, which was touted by the Department of Justice as “the largest and most far-reaching multinational enforcement operation ever directed at mass-marketing fraud schemes.” A total of 96 investigations conducted by U.S. agencies led to the identification of 2.8 million victims, who suffered losses of more than $1 billion. Postal Inspectors were actively involved in more than 45 of the 96 investigations.
A notable investigation conducted under Operation Global Con was Operation Jackpot, which led to the dismantling of an international sweepstakes scheme that defrauded thousands of mostly elderly U.S. citizens of more than $15 million. Operators mailed sweepstakes entry forms to victims, many of whom provided personal and financial information, as well as a nominal sweepstakes entry fee. They then sold entry forms to other telemarketers in Costa Rica, who used Voice over Internet Protocol (VoIP) technology to call prospective victims from numbers that would appear on caller IDs as being in the United States. The operators informed victims they had won between $350,000 and $450,000, but must wire insurance fees of 1 percent of their winnings to Costa Rica, Antigua, or Barbuda. Those who paid the fraudulent fees were re-contacted by the “U.S. Sweepstakes Bureau,” a fictitious government agency that claimed a mistake had been made and the winnings had increased to between $3.5 and $4.5 million, but now required additional fees. Various federal criminal charges and violations, including mail fraud, wire fraud, and money laundering conspiracy, were filed against 21 suspects, four of whom were Canadian citizens. Global Con investigators arrested 14 suspects in Costa Rica, Florida, Texas, and California. The U.S. Postal Inspection Service led the investigation and was assisted by the U.S. Bureau of Immigration and Customs Enforcement (ICE), U.S. Department of Commerce Inspector General, Federal Trade Commission (FTC), U.S. State Department, U.S. Department of Justice-Criminal Fraud Task Force, Organismo de Investigacion Judicial of Costa Rica, and Project Colt, a U.S.-Canada Cross-Border Fraud Partnership based in Montreal, Quebec.
Hurricane Katrina Task Force
As a member of the Department of Justice’s Hurricane Katrina Task Force, the U.S. Postal Inspection Service continues to educate the public about fraud schemes related to hurricane relief efforts. In December 2005, the U.S. Postal Inspection Service issued a fraud-prevention article, “Crime Watch—Avoiding Hurricane Fraud,” which was distributed nationwide to 204 newspapers with a combined readership of more than 6.7 million.
Postal Inspectors across the country remained vigilant and aggressively pursued leads from partnering agencies, as well as consumers, related to bogus agencies and charities, identity theft, and government-benefit fraud that surfaced following Hurricane Katrina. Due to the Postal Inspection Service’s long-term commitment to these investigations, the Houston Division was charged with acting as national coordinator for Inspection Service cases. This has facilitated case tracking, helped resolve conflicts between agencies, and provided a focal point for localized hurricane fraud-related task forces. Specifically, the Postal Inspection Service has investigated 100 criminals who submitted false claims to FEMA and state government agencies, resulting in 98 indictments, 103 arrests, 73 convictions, and 13 jail sentences.
In one case, an alert Postal Service employee notified Postal Inspectors after noticing a suspicious number of FEMA mailings arriving at a Portland, OR, address. Inspectors initiated an investigation that led to the arrest of Harold A. Miller, Jr. and searches at an apartment. The investigation found that more than 283 fraudulent disaster claims were submitted to FEMA by about 100 suspected conspirators in Portland and Vancouver, WA. Suspects received assistance checks in the mail and negotiated them, despite knowing they were not entitled to the money. Losses are conservatively estimated at $400,000. A federal grand jury indicted 11 suspects in January 2006. Ten suspects pled guilty, and nine were sentenced. Miller was sentenced to three years and one month in jail and was ordered to pay $72,360 in restitution. James Irby, who took over the scheme from Miller, was sentenced to three years in jail and was ordered to pay $340,470 in restitution. The Postal Inspection Service is leading this ongoing investigation, with assistance provided by the FBI, the Department of Homeland Security’s Office of Inspector General, and the U.S. Secret Service. More arrests are anticipated.
Mail Fraud Investigations
Mail Fraud Against Businesses
Postal Inspectors devote considerable resources to protecting the business community from mail fraud and are currently conducting 998 such investigations. At year-end, Inspectors reported 455 arrests and 425 convictions. Following are examples of Inspectors’ efforts to disrupt mail fraud schemes against businesses in FY 2006.
- John “Jay” Phillips, owner of Phillips Title Agency in Pennsauken, NJ, was sentenced on December 21, 2005, to three years in prison and five years’ probation, and was ordered to pay more than $4.2 million in restitution for a mortgage-fraud scheme. Postal Inspectors proved that Phillips obtained numerous fraudulent loans between October 1997 and January 2002 and used the $6.5 million he gained in illegal proceeds for personal expenses. A popular figure among Philadelphia’s professional football and basketball athletes, Phillips advised Inspectors that, after purchasing the Coliseum (a sports facility in Voorhees, NJ), he began renovating the structure. He used a number of bogus real estate closings to raise loan proceeds for the renovations. Phillips submitted false documents to mortgage companies via the U.S. Mail for commercial and residential properties, only some of which he owned. He named professional athletes and relatives as buyers on the bogus loans, without their knowledge or approval.
- Robert W. Archibald was sentenced in Dallas, TX, in November 2005 to two years in prison and two years’ probation, and was ordered to pay more than $3.6 million in restitution for a scheme to defraud Coca-Cola Enterprises of North Texas and various independent school districts in the area. Postal Inspectors and FBI agents found that Archibald submitted bogus vending agreements to Coca-Cola and the school districts, allowing him to channel at least $3.6 million into fraudulent business accounts he controlled. Archibald had Coca-Cola mail the money to his fictitious businesses.
- Victor Einhorn was sentenced in New York in October 2005 to seven years in prison and was ordered to pay more than $8 million in restitution to victims after Postal Inspectors found that he and co-conspirators used the mail in a scheme that defrauded numerous international and domestic businesses and individuals, including financial institutions, airlines, and rental and leasing companies. Einhorn orchestrated the fraudulent purchase and takeover of travel agencies to exploit the airlines and steal blank ticket stock. The stolen tickets were sold or exchanged for “clean” tickets at airline counters, and actual travel was completed on new, untraceable reservations. Credit card accounts were also switched so that the airlines were paid—with fraudulent credit cards—although the suspects were paid, via the mail, with valid customers’ accounts.
Mail Fraud Against Consumers
Consumers may be targeted by criminals via fraudulent sweepstakes, telemarketing fraud, work-at-home schemes, merchandise misrepresentations, vacation or real estate scams, Internet fraud, and investment schemes. Postal Inspectors conducted 1,728 investigations of mail fraud against consumers, arrested 580 suspects, and reported 482 convictions in FY 2006. Case examples follow.
- Investment adviser Bradford C. Bleidt was sentenced in Boston, MA, in December 2005 to more than 11 years in prison and three years’ probation, and was ordered to pay $31.7 million in restitution to victims of his fraud scheme. In a joint investigation with FBI and IRS agents, Postal Inspectors learned that Bleidt had been acting as a financial adviser over the past 10 years for several Masonic lodges on the North Shore, claiming great success in his work. In periodic statements mailed to clients, Bleidt painted a rosy picture of their investments, even during the stock market’s down years. When clients requested money from an account, Bleidt obliged within days. In fall 2005, however, the “pyramid” began to crumble when a church client needed about $1 million for a construction project. Bleidt no longer had the money, having spent most of it on himself and his pet project, a Boston radio station. After Bleidt was arrested in November 2004, he pleaded guilty to mail fraud, wire fraud, and money laundering. Prior to his plea, every known victim was contacted and given the opportunity to submit evidence of the scheme to investigators, as well as to meet with specialists from participating agencies’ Victim Witness programs. The Securities & Exchange Commission brought a parallel civil case to freeze Bleidt’s assets, and the court appointed a receiver for Bleidt’s companies to recover assets for victims. A total of 22 cents on the dollar was recovered, mostly from third parties that could be held liable for negligence in their dealings with Bleidt.
- Sheryl Davis and Daniel Smith were sentenced in California in April 2006 to two years and four months in prison, and two years and 10 months in prison, respectively, with three years’ probation each, and were ordered jointly to pay more than $122,000 in restitution after pleading guilty to two counts of mail fraud. Postal Inspectors revealed that, from at least May 2000 through November 2004, Davis and Smith ran travel scams under various names, including SFS Properties, Vacation Properties International, and National Casino Promotions. They placed ads for vacation packages in newspapers across the country, but never provided the services or products. People mailed payments to addresses that were mostly boxes rented anonymously by Davis and Smith at commercial mail receiving agencies. Papers that ran the ads were also victimized because they were paid with counterfeit checks. Postal Inspectors estimated losses to victims and businesses at about $420,000, but, as a result of the defendants’ plea agreements, court-ordered restitution was reduced.
- Karen Hartstein was sentenced in July 2006 to 11 years in prison for mail fraud and 10 years in prison for unauthorized use of a credit card, and she was ordered to pay nearly $2.1 million in restitution for a Ponzi scheme involving the U.S. Mail. Following leads from the Missouri Secretary of State Securities Division and the Chesterfield Police Department, Postal Inspectors found that Hartstein convinced people to loan her money, which she promised to pay back in full, along with six airline tickets to anywhere they wanted to travel and two cruises of their choice. As is typical in a Ponzi scheme, early participants made money, but as the scheme progressed Hartstein had to use investments from later participants to pay off earlier victims. Inspectors learned that, between August 2001 and April 2004, she defrauded approximately 200 people and businesses of more than $2.5 million. The scheme impacted people of all ages, but hurt elderly victims in particular, some of whom lost all of their retirement savings.
- Following an investigation by Postal Inspectors, a Voluntary Consent Decree was entered into on March 1, 2006, by the Department of Justice that identified two Maryland residents as operators of three sweepstakes charities allegedly benefiting the blind and cancer research. The decree required that the operators stop making misrepresentations or deceptive mailings and must pay the U.S. Postal Service $7,500 to offset the expense of returning approximately 60,000 pieces of impounded mail addressed to the sweepstakes in Pennsylvania, Virginia, and Washington, DC. Further, they were ordered to pay $10,000 to the Postal Inspection Service’s Consumer Fraud Fund and donate $275,000 to Community Health Charities of Arlington, VA, with the stipulation that 70 percent of the donation go to charities that benefit the blind and 30 percent to charities promoting cancer research. Postal Inspectors in Harrisburg, PA, began the investigation following allegations the operators mailed requests for charitable donations on the false pretext of a sweepstakes award notification distributed via the U.S. Mail. Deceptive language on the mailing envelope and in the solicitation letter deceived some recipients into believing they were pre-selected winners of a $6,000 cash prize. Inspectors found documents filed with various states and the IRS indicating that operators distributed less than eight percent of the donations to charities—a total of 626,959 donations totaling more than $12.1 million. A Preliminary Injunction against the charities and operators was issued in September 2005 as a result of Inspectors’ work. It was subsequently revoked as a result of the operators’ adherence to the Voluntary Consent Decree.
Since the White House named the U.S. Postal Inspection Service a member of its Corporate Fraud Task Force in July 2002, Postal Inspectors have been increasingly involved in corporate investigations, noted by former U.S. Attorney General John Ashcroft as “…among the most significant issues facing our nation and our economy.” Postal Inspectors vigorously pursue and stop those responsible for corporate fraud, as shown in the examples that follow from FY 2006.
The mutual fund industry became the focus of regulatory and enforcement scrutiny in late 2003 as the result of an investment strategy known as “market timing.” The large-scale, in-and-out deposits and withdrawals of mutual funds increased investors’ gains by following the rise and fall of foreign markets, which are several hours ahead of U.S. markets.
Postal Inspectors joined staff of the U.S. Attorney’s Office for Massachusetts to determine if the strategies resulted in criminal fraud. Their investigation soon focused on brokers at the Boston office of Prudential Securities, which had merged with another company under a new name. Inspectors found the brokers repeatedly took deceptive action to conduct short-term, in-and-out mutual fund trades, although they had been barred from doing so many times. Charges to date have resulted in guilty pleas by three suspects at the Boston office of Prudential. In August 2006, the Attorney General of the United States announced at a press conference in Washington, DC, that a deferred prosecution agreement with Prudential Securities resulted in certain assurances of future conduct. Its employees are prohibited from engaging in market timing contrary to the rules of mutual funds, and Prudential will pay a penalty of $600 million, part of which includes restitution. Prudential will be held to the conditions of the agreement for five years and, if it adheres to the conditions, will not be charged criminally.
- After an investigation by Postal Inspectors, four former senior executives of Gen Re Corporation and one former senior executive of American International Group (AIG) were charged in September 2006 in a 16-count, superseding indictment for a scheme to manipulate AIG’s financial statements. The charges include conspiracy to violate federal securities laws, securities fraud, making false statements to the SEC, and mail fraud. A fifth person was charged on similar counts. The defendants made it appear that AIG had increased its loss reserves, a key financial indicator used by analysts and investors. In addition, an AIG senior executive made two sham reinsurance transactions between subsidiaries of AIG and Gen Re in late 2000 to quell criticism of an approximately $59 million reduction in AIG’s loss reserves in the third quarter of 2000. The phony transactions indicated that AIG had increased its loss reserves by $250 million in the fourth quarter of 2000 and by another $250 million in the first quarter of 2001. In June 2005, two senior Gen Re executives pled guilty to conspiracy to falsify SEC filings. Postal Inspectors on the Department of Justice Fraud Team are leading the investigation, along with Inspectors from the Washington Division’s Fraud Team.
Mail Fraud Against Local, State, and Federal Government
The U.S. Mail has been used to commit fraud against government agencies at all levels, including false claims for tax refunds and false claims for benefits related to education, housing, and welfare. Inspectors arrested 264 suspects and reported 291 convictions for fraud against government in FY 2006. Examples of cases in FY 2006 follow.
-Ignatius Ogba was sentenced in April 2006 to 12 years and seven months in prison and three years’ probation, and was ordered to pay more than $2.9 million in restitution for Medicare fraud. Postal Inspectors in Texas, working with other federal and state law enforcement agencies, formed Operation Rollover to probe health care fraud. Beginning in February 2004, Inspectors learned that Ogba and others had fraudulently billed Medicare for millions of dollars worth of motorized wheelchairs and scooters that were never delivered or even medically necessary. Medicare was directed by Ogba to mail the checks to providers who failed to supply the equipment.
- A joint investigation by Postal Inspectors and agents from Immigration and Customs Enforcement in Michigan resulted in sentences for three men in May 2006. Fabiano Caneva, Fabiano Cesilla, and Nelson Domingues received sentences of 27 to 37 months in prison and two years’ probation for helping Brazilian nationals residing outside the state of Michigan obtain driver’s licenses with fraudulent documents. The three men and others operated from Newark, NJ. They provided immigrants with false papers and then transported them to Michigan to get the licenses. Seven of the nine suspects identified have pled guilty to mail fraud.
Pasadena, CA, physician Aziz F. Awad was sentenced in September 2006 to 15 years in prison and was ordered to pay $2.5 million in restitution. Awad fraudulently billed Medicare and Medi-Cal for more than $3.1 million in unnecessary respiratory treatments for mentally ill people. The treatments were either not performed according to Medicare’s rules or not performed at all. Awad, along with a co-conspirator who operated a billing company and respiratory-therapy company, was convicted in December 2005 on 24 counts of health care fraud and four counts of money laundering. Postal Inspectors and FBI agents learned that Awad and the co-conspirator mailed more than $7 million in claims to Medicare and $500,000 in claims for services supposedly performed at a time when Awad was out of the country.
The investigation began when the mother of a mentally ill Medicare beneficiary reviewed her son’s statement and noticed entries for 70 respiratory treatments at Awad’s office, despite the fact that her son did not have a respiratory condition and had no transportation to a doctor’s office.
In addition to the protection afforded to consumers by the Mail Fraud Statute, the Postal Service is able to offer its customers the safeguard of remedies provided under administrative and civil statutes. The statutes are intended to protect the public and preserve the integrity of the mail. Through administrative proceedings and civil federal court action, Postal Inspectors may promptly halt any improper use of the mail to shield the public from potential fraud. During FY 2006, Postal Inspectors at the Chicago, Los Angeles, New York and San Francisco divisions seized and obtained destruction orders for more than 1.4 million pieces of illegal foreign lottery matter destined for consumers in the United States. Examples of Inspectors’ cases in FY 2006 follow.
- In March and May 2006, False Representation Orders were issued against Intel Direct, Market Media, and InterGroup Services. Cease and Desist Orders were also issued against the named companies and their operator, Michael Cassell, a Canadian resident. Postal Inspectors found that Cassell made mass mailings to individuals and businesses across the country for hundreds of dollars worth of Web services, listings, or advertising. They linked the mailings to a commercial mail receiving agency (CMRA) in Plattsburgh, NY, that forwarded them to Cassell in Canada. Recipients of the invoices reported they had never ordered or received any services from Cassell or his companies. Cassell was ordered to pay $10,000 in civil monetary penalties.
- A Cease and Desist Order was issued in February 2006 against two Florida residents, Michael and Nicholas Shim, doing business as Mailing Processing Systems, Inc. (MPS), for operating a fraudulent work-at-home scheme. MPS mailed solicitations to consumers offering substantial wages for stuffing envelopes or assembling and stapling booklets.
Respondents who mailed a $39 fee to a Post Office in Miami, FL, received a packet of envelopes, mailing labels, and ads. They were instructed to mail the offer to others to solicit them to join the program and mail the $39 to MPS. Michael Shim was the subject of a prior False Representation Action in 1994 for promoting a similar scheme. At that time, he signed an agreement to a consent order to cease and desist, which prohibited him from making false representations under any name or corporate device. Were he to do so, the Postal Service could file an action to immediately stop delivery of the mail, which it chose to do in 2006. Michael Shim then agreed to permanently refrain from initiating a new mail order business and to pay civil penalties of $12,500. More than 9,000 pieces of mail from the scheme were withheld from delivery and returned to senders.
-In March 2006, a Final Decision and Order was issued against Australian International Winners Group and A.I.W.G. A.I.W.G. mailed illegal solicitations to U.S. consumers, offering an opportunity to join a pool for the purchase of lottery tickets in the “Aussie Powerball.” They were directed to mail $90 to A.I.W.G. at National Mail Receiving Center, GPO Box 2611, Sydney NSW 2001, Australia. Consumer awards were to be made through random selection. The Final Order prohibits A.I.W.G. from conducting a lottery and prohibits the Postal Service from delivering mail associated with the scheme.
Confidence in the Mail
The U.S. Postal Inspection Service takes a lead role in partnering with the mailing industry to reduce fraud and theft that targets businesses via the mail. To increase customers’ confidence in the mail, the Postal Inspection Service formed the Financial Industry Mail Security Initiative, which comprises the Postal Inspection Service, major commercial mailers, and suppliers from targeted industries, such as banks and credit card companies. In addition to reducing fraud and theft, task force members work to decrease processing problems by identifying and exchanging information on “best practices,” fraud trends, and loss-prevention strategies, as well as by developing improved processes and procedures that facilitate criminal investigations and prosecutions where warranted.
During FY 2006, Postal Inspectors investigated 21 cases of rebate fraud. In one instance, Wahbi M. Ahmad was charged in March 2006 with four counts of mail fraud and one count of filing a false tax return. Postal Inspectors and IRS agents learned that, between August 1998 and July 2005, Ahmad, a manager at a chain of food stores named Cousins Food Markets, fraudulently redeemed about $500,000 in grocery store coupons and used the proceeds for personal expenses. Cousins Food Markets did not accept coupons, and approximately 100 product manufacturers were defrauded. Ahmad mailed the coupons to two coupon clearing houses, and the clearing houses mailed the redemption checks to Post Office boxes used by Ahmad.
Postal Inspection Service investigations of fraud targeting the business industry in FY 2006 resulted in six withholding Mail Orders and three Voluntary Discontinuances. Examples of cases investigated by Postal Inspectors in the past fiscal year follow.
- In January 2006, Diane L. Brandon was sentenced in South Carolina to six months’ home detention and three years’ probation, and was ordered to pay nearly $50,000 in restitution. Postal Inspectors found that 271 mail order merchants and charities lost about $100,000 in the scheme. Brandon opened checking accounts at various banks and ordered personal checks. She wrote the checks to cover items from mail order companies and charities although she was fully aware she had insufficient funds to cover them. Brandon also altered account numbers on the checks to delay detection by companies and banks she had previously defrauded.
- David Garnett and Shawn James were charged in September 2006 with wire fraud and aiding and abetting after defrauding DirecTV of more than $169,000, including about $136,000 in satellite equipment and $33,000 in installation services. Inspectors and FBI agents discovered that Garnett set up some 180 bogus customer accounts with DirecTV and ordered more than 600 pieces of satellite equipment. He used his address and others in southwest Philadelphia to set up the accounts. James was the lead technician for a team of satellite installers, and he gave Garnett hundreds of pieces of DirecTV equipment. In exchange, James got signed work orders from Garnett in fictitious names that allowed him to be paid for installations he did not perform. Garnett sold some of the equipment at Philadelphia pawn shops.
Fraud on the Internet
The Internet is teeming with fraudulent schemes, with swindlers using a variety of methods to exploit people online. Fraud on the Internet often involves mail fraud, as “cyberscammers” use the mail to receive payments and ship items. The Postal Inspection Service actively participates in the Internet Crime Complaint Center (www.ifcc.gov), a project established by the FBI and the nonprofit National White Collar Crime Center. Examples of cases from FY 2006 follow.
- Thomas B. Peters was sentenced in October 2005 to a year and a day in prison and two years’ supervised release, and was ordered to pay $141,000 in restitution. Postal Inspectors and IRS agents in Ft. Worth, TX, executed a search warrant at Peters’ home and found he had hundreds of digital cameras worth about $500 each that had been stolen from Teleplan, a factory in Irving that refurbishes cameras and other electronics. He sold the cameras on eBay and mailed them to bidders. About $600,000 worth of cameras were stolen from Teleplan and sold by Peters and others.
- Angela Miller was sentenced in December 2005 to more than two years in prison and was ordered to pay more than $125,000 in restitution for Internet auction fraud. Miller sold items on eBay to about 100 people. Winning bidders mailed money to three Post Office boxes Miller rented, but she never sent them the items. Postal Inspectors and other law enforcement officers seized evidence from Miller’s home that documented the scope of the fraud.
- William S. Yager of Utica, NY, was sentenced in December 2005 to 10 years and one month in prison and three years’ supervised release, and was ordered to pay more than $538,000 in restitution to his 120 victims. Yager, who holds an MFA from the State University of New York in Buffalo, opened eBay accounts under fake names and addresses in 1999. He sold paintings purported to be by Willem De Kooning, Mary Cassatt, Milton Avery, and Edgar Degas and gave phony information to convince purchasers they were authentic. Many of the payments were made by U.S. Mail, and some of the bogus paintings were delivered via the mail. Postal Inspectors worked with agents from the Secret Service; the Syracuse, NY, Police Department; FBI; ICE; and New York State Police to arrest Yager in March 2004 following the execution of federal search warrants at three locations. In Yager’s basement was an unfinished “fake” on an easel. After his arrest, Yager was caught three times violating the terms of his release by attempting to sell fake artwork and using an unmonitored computer.
A priority for Postal Inspectors in FY 2006 was to disrupt major telemarketing scams that targeted large numbers of victims. In fact, Inspectors reported 168 such investigations, 74 arrests, and 77 convictions. Case examples from the past fiscal year follow.
- Jeffery Lynn Rosier of Miami, FL, was sentenced in December 2005 to 65 months in prison and three years’ supervised release, and was ordered to pay more than $550,000 in restitution to victims of his telemarketing scheme. Doing business as TLP Marketing and JLR Management, Rosier targeted elderly victims in a sweepstakes recovery scheme. He claimed that his companies had located winnings that belonged to victims of previous schemes, and he could assist them in recovering their money. Victims were told to mail fees, which were needed to claim the winnings, to a commercial mail receiving address rented by Rosier.
- Michael Williams, a Toronto check casher, Western Union agent, and convicted telemarketer, waived extradition in August 2006 and pled guilty to conspiracy to commit mail fraud. Williams and his co-conspirators, dba ICON Cheque Cashing Services, Inc. of Toronto, Ontario, were charged with mail and wire fraud for advance-fee loan telemarketing schemes. ICON advertised guaranteed loans, regardless of credit history, in U.S. newspapers, targeting mostly single female parents with poor credit. Victims provided personal and financial information to “loan officers,” who approved the loans only if a fee was provided to cover insurance on the loan. After the fee was paid, however, no loan was issued, the company folded, and the telephone was disconnected. Postal Inspectors learned that Williams and others ran the scheme over and over, using different company names, phone numbers, and addresses, which were usually CMRAs in the United States and Canada. More than 4,000 American victims lost more than $4 million. The Postal Inspection Service is the lead agency on the case and is continuing its investigation in cooperation with Canadian law enforcement officials. The Inspection Service joined the Toronto Strategic Partnership in June 2000 to increase its efficiency and effectiveness in combating cross-border mass marketing fraud. The Postal Inspection Service is a member of six U.S.–Canada cross-border fraud task forces.
The chart below provides statistics on administrative actions taken during FY 2006 as the result of investigations conducted by Postal Inspectors.
In August 2006 (pictured left to right), Inspector in Charge of the Boston Division Peter Zegarac, Director of the Division of Enforcement of the U.S. Securities and Exchange Commission Linda Chatman Thomsen, and Deputy Attorney General Paul J. McNulty announced at a press conference in Washington, DC, that a deferred prosecution agreement with Prudential Securities resulted in certain assurances of future conduct. Among other orders, Prudential will pay $600 million in penalties, which includes victim restitution and $25 million for the Postal Inspection Service's Consumer Fraud Fund. Charges to date have resulted in guilty pleas by three former Prudential employees.
U.S. Attorney Debra Wong Yang, Postal Inspector in Charge Oscar Villanueva (shown left), and a representative of the Internal Revenue Service announced at a press conference on May 18, 2006, the indictment of the New York-based law firm of Milberg Weiss Bershad & Schulman and two of its partners. The indictment alleges a scheme in which several suspects were paid millions of dollars in secret kickbacks in exchange for serving as named plaintiffs in more than 150 class-action and shareholder derivative-action lawsuits. The indictment charges the firm received more than $200 million in attorneys’ fees from the lawsuits over the past 20 years.
Postal Inspectors in New York, working with agents from the New York State Department of Health and Human Services and other state and local agencies, investigated a scheme involving the illegal production and sale of Medicaid cards by corrupt New York City employees. Inspectors arrested eight city employees and eight other suspects on May 2, 2006, and further prosecution is pending. It is estimated that the Medicaid program was defrauded of millions of dollars in the scheme.
Postal customers in the United States lose millions of dollars each year to illegal foreign lotteries. The solicitors send mass mailings to U.S. residents informing them they have won or are in the final stages of winning a multimillion- dollar foreign lottery—but must first mail back “required fees” to collect the proceeds. Those who “take the bait” and mail in the money get nothing in return. In response to an increase in illegal foreign lottery mail entering the United States through John F. Kennedy International Airport in New York over the past year, Postal Inspectors from the Brooklyn Fraud Team formed an initiative with agents from U.S. Customs and Border Protection, with support from U.S. Postal Service mail-processing employees, to combat this fraud. In December 2005, Customs and Border Protection agents at JFK, pursuant to their border-search authority, intercepted 100,000 pieces of inbound international mail suspected of containing illegal foreign lottery matter. Postal Inspectors examined and took possession of the mail, which came from Hong Kong and offered chances to play the “El Gordo” lottery for a fee of $18. Respondents were told to mail fees to The Netherlands. A Declaration detailing the seizure was forwarded, with a sample, to the U.S. Postal Service’s Chief Counsel for Customer Programs for Determinations of Nonmailability. The Determinations were issued, but the mailer failed to respond before the requisite 45-day waiting period. The Chief Counsel then issued a Destruction Order, and the mailings were destroyed pursuant to U.S. Postal Service regulations.
Based on information provided by Postal Inspectors in December 2005, a grand jury in Illinois indicted 19 members of a group calling themselves the Irish Travelers on charges of mail fraud, wire fraud, odometer fraud, and false odometer statements. They were charged in Indiana with buying new pickup trucks and disconnecting the odometer sensors. Group members drove the vehicles for about one year and then traded them in at Illinois car dealerships. When tested, the true mileage on the tampered vehicles, which were sold to unsuspecting consumers, averaged at least 47,000 miles more than shown. Titles containing the false odometer readings were mailed to state offices. About 20 tampered vehicles were sold in Illinois, with average losses of more than $10,000 apiece. In January 2006, Inspectors worked with the defendants’ attorney to arrange for the group to surrender themselves and their vehicles at a Postal Service facility in East St. Louis, IL. The Travelers handed over 17 of the 20 vehicles to Postal Inspectors before turning themselves in to U.S. Marshals. The U.S. Postal Inspection Service led the investigation with assistance from the Illinois Secretary of State Police and the National Insurance Crime Bureau.
Mail Theft and Violent Crime
The American public has the right to expect its mail to be delivered on time and intact. As mandated by law, U.S. Mail should arrive unopened and in the mail receptacle for which it was intended. When delivery is interrupted by theft, rifling, obstruction, or destruction of the mail, investigative responsibility comes under the jurisdiction of U.S. Postal Inspectors, who are charged with preserving the “sanctity of the seal.”
Mail thieves have many opportunities to steal mail. Every day, millions of letters travel across the country. The mail is delivered to about 144 million addresses six days, every week. Every day, those millions of mail pieces—First-Class letters, parcels, magazines, financial documents, business correspondence, Express and Priority Mail, registered mail, international mail, and much more—are moved to their destinations by plane, ship, rail, truck, automobile, and human beings.
More than 212 billion pieces of U.S. Mail are delivered yearly to mailboxes, collection boxes, apartment mailbox panels, relay boxes, co-op mailing racks, Post Office boxes, neighborhood delivery and collection box units, as well as countless versions of ingenious, homemade mailboxes crafted to meet federal standards set by the U.S. Postal Service, with the counsel of U.S. Postal Inspectors.
Postal Inspectors know that, because mail can contain any number of valuables—not just jewelry or other expensive items, but personal and financial information, credit card applications, and the like, criminals will try to steal it. Mail thieves employ an endless number of schemes that Postal Inspectors work hard to thwart.
U.S. Postal Inspectors deploy the best security available. They also take preventive measures to help protect and educate postal employees and the public about mail theft.
The Postal Inspection Service devotes significant resources to protecting the U.S. Mail. Postal vehicles, collection and relay boxes, apartment mailbox panels, cluster box units (CBUs) and neighborhood delivery and collection box units (NDCBUs) are frequently targeted by thieves in volume mail attacks. The attacks constitute a threat to postal employees and customers. Protecting and securing the U.S. Mail comprise major components of the mission of the Postal Inspection Service.
The American public depends on Postal Inspectors to identify and arrest mail thieves. In FY 2006, Postal Inspectors arrested 4,545 suspects for mail theft and, in the same period, 4,159 mail theft suspects were convicted on such charges.
Following are examples of volume mail attacks investigated by Postal Inspectors in FY 2006.
- Postal Inspectors in Philadelphia, PA, arrested three men who created high-quality counterfeit postal arrow keys, which they used to steal mail containing checks from collection boxes in Virginia, Maryland, and Pennsylvania. The men created counterfeits of the stolen checks, deposited the fraudulent checks into several bank accounts, and withdrew the funds. About 180 victims lost an estimated $503,356. One man was sentenced in March 2006 to 36 months in prison and ordered to pay $503,356 in restitution. Upon completion of his term, he will be released to immigration officials for possible deportation to Hong Kong, where he resides. If he is not deported, he will be placed on five years’ supervised release. The other men are awaiting sentencing.
- Between April and August 2006, Postal Inspectors arrested six suspects who later pled guilty to charges of racketeering, conspiracy to commit racketeering, and identity theft related to a large number of volume attacks throughout central Florida dating back to 2003. The suspects broke into mail receptacles, looking for financial and personal documents, then manufactured counterfeit IDs to match victim information. They used the IDs along with stolen credit cards, credit card convenience checks, and bank checks for various purchases, including at least two vehicles. Inspectors alleged the six also were responsible for selling personal information obtained from the mail. Losses are estimated at close to $500,000. The six suspects received sentences ranging from three to five years in prison and were ordered to pay a total of $32,000 in restitution to the Postal Inspection Service to cover the costs of the investigation. Volume attacks in the Orlando area dropped by about 77 percent following the arrest of the defendants.
- Inspectors investigated a mail theft ring in November 2005 after a witness saw an unidentified man breaking into a collection box in front of the Winterwood Post Office in Las Vegas. The witness recorded some of the numbers from the man’s Nevada license plate, which Inspectors traced to a rented car. When the car was located in December 2005, Inspectors responded to the scene and arrested the driver on an unrelated outstanding identity theft warrant. On January 4, 2006, Inspectors tracked down four suspects at the Texas Station Hotel and Casino and recovered more than 200 pieces of stolen U.S. Mail, including 170 checks, from addresses in Las Vegas. Two suspects had handguns, and one suspect had multiple false Nevada drivers’ licenses in the names of mail theft victims. Three suspects were arrested on state charges of possession of stolen credit cards, and federal charges are pending for the principal suspect. Other examples of mail theft cases investigated by Postal Inspectors in FY 2006 follow.
- Ten suspects were indicted in July 2006 following an investigation by Postal Inspectors in Philadelphia. Inspectors were notified by a financial institution’s fraud investigator that payment checks from customers of utility companies had been intercepted and copied, with the information used to make unauthorized transactions through customers’ accounts. Inspectors tracked down the suspects, who were allegedly writing checks on closed accounts and cashing them at the drive-through tellers of four major financial institutions in Philadelphia. The suspects used fake IDs and carried “cheat sheets” with personal details about their victims, then cashed the checks against those accounts. Employees of a local collection agency helped by providing Social Security numbers, addresses, and dates of birth of their customers. More than $1 million was fraudulently withdrawn from the accounts, and another $1.2 million was stolen when one suspect recruited bank employees to provide information on customers. That suspect distributed phony IDs so others in the ring could cash the checks and withdraw money on the accounts.
- The U.S. Postal Inspection Service’s Identity Theft Economic Crimes Task Force (ITEC) in Los Angeles, CA, learned in February 2005 about the illegal takeovers of more than 300 credit cards, with more than $1 million in losses. Addresses for the accounts had been fraudulently changed to rented boxes at commercial mail receiving agencies (CMRAs) in Southern California. Task force Inspectors determined that two Nigerians had picked up the credit cards from the CMRAs. The suspects used the cards, with fraudulent IDs, to transfer balances and make cash advances. In July, ITEC members executed federal search warrants on the suspects’ residences, vehicles, and storage units and seized fraudulent California IDs and Nigerian passports bearing the suspects’ photos but issued in various names. Also recovered were printouts of victim information. Inspectors additionally seized several hundred credit cards and more than 3,000 printouts, many of which indicated the cards had been mailed to the suspects’ CMRA addresses. Inspectors arrested the two men for conspiracy to commit access-device fraud, and both pled guilty. One man was sentenced in May 2006 to 36 months in prison, and the other was scheduled to be sentenced in late October.
Mail Theft by Employees and Contractors
U.S. Postal Service employees work conscientiously to move the nation’s mail to its proper destinations, and they take their responsibilities seriously. Unfortunately, a small percentage of employees abuse the public’s trust. The U.S. Postal Inspection Service is charged with investigating and identifying employees who steal mail and takes steps to have them prosecuted and removed from employment with the U.S. Postal Service. In FY 2006, Inspectors’ investigations of mail theft by employees and contractors resulted in 515 arrests and 466 convictions.
The U.S. Postal Inspection Service ceased its investigations of employee mail theft effective September 1, 2006, as directed by the Postmaster General when responsibility for these investigations was transferred to the U.S. Postal Service’s Office of Inspector General. The Postal Inspection Service retains responsibility for investigating mail theft by contract employees. The following are examples of employee and contractor mail theft investigated by Postal Inspectors in FY 2006.
- In June 2006, the Postal Inspection Service’s Netflix Task Force identified two postal employees at the North Houston Processing and Distribution Center (P&DC) for stealing Netflix and Blockbuster DVDs, as well as letters containing gift cards, from the mail. The task force investigated more Netflix losses at other P&DCs in Houston and subsequently identified another employee for theft. Inspectors recovered about 8,000 DVDs during a search of the third employee’s home, with losses totaling more than $117,000. The employees had stolen more than 6,000 Netflix movies, 1,500 Blockbuster movies, and GameFly video games and movies from other companies. Federal prosecution is pending.
- In May 2006, Postal Inspectors identified two contractors who worked for the ground-handling service of a major airline for stealing First-Class Mail containing DVDs. GameFly Incorporated, a major mailer of video games in California, lost more than $92,000 in outbound mailings to its customers. The suspects admitted placing about 20 mailings in their pants during each theft, and selling the games to local retailers for cash. The contractors were terminated from their jobs, and federal prosecution is pending.
Nigerian Counterfeit Investigations
The U.S. Postal Inspection Service continued to aggressively pursue enforcement and prevention action in FY 2006 related to counterfeit postal money orders entering the United States from foreign countries. In the majority of such cases, those who negotiate the money orders are victims of scams perpetrated overseas by organized Nigerian criminal gangs. The gang members used expensive offset presses and computers to mass-produce money order facsimiles.
Heightened attention by the U.S. Postal Inspection Service in FY 2006 included printing a quantity of specimen postal money orders to help financial institutions and other law enforcement agencies identify authentic money orders. The specimens were printed by the authorized manufacturer on the same paper and with the same security features as genuine postal money orders.
The U.S. Postal Inspection Service also partnered with representatives of the Postal Service’s Marketing and Corporate Treasury offices to implement the U.S. Postal Service’s Money Order Verification System. The system adds another level of security to the visible security features already present in Postal Service money orders. It includes an Interactive Voice Response (IVR) phone option that prompts callers to enter unique identifiers from a postal money order and confirms whether the Postal Service issued the money order. The system verifies money orders issued at least two days previous to the call and not older than 90 days. In FY 2006, customers made more than 200,000 calls to the IVR toll-free number, 1-866-459-7822.
Postal Inspectors and Postal Service representatives engaged in rigorous consumer-awareness activities in FY 2006 to educate consumer groups, businesses, financial institutions, and media outlets about the security features of U.S. Postal Service money orders. Through town hall-style meetings, media presentations, radio and television interviews, public service announcements, press releases, and consumer publications, Inspectors reached out to inform Americans about illegal counterfeits of all types.
Inspectors also investigated instances of “raised” and altered postal money orders, where suspects “cut and paste” alterations to legitimate postal money orders to increase the dollar amount.
Working with agents from U.S. Immigration and Customs Enforcement, Postal Inspectors in FY 2006 staged regular interdictions at major U.S. airports to intercept counterfeit checks, money orders, and similar instruments before they could be circulated to victims. More than 70 percent of the dollar value of the seized items were counterfeits from other institutions, such as traveler’s or bank checks, rather than postal money orders, and were mailed from various countries, including Nigeria, Ghana, Togo, and Benin.
The following are examples of financial-instrument crime investigated by U.S. Postal Inspectors in FY 2006.
- Postal Inspectors from International Affairs and the New York Division assisted cybercrime investigators of the Nigerian Economic and Financial Crime Commission in January 2006 with the arrest of Peter Iven Nosa and his co-conspirators in Lagos, Nigeria. Nosa advertised counterfeit money orders for sale on the Internet and worked with conspirators in Europe and the Middle East to distribute counterfeit instruments, commit credit card fraud, and “launder” illegal proceeds.
- Postal Inspectors intercepted a parcel in March 2006 containing $42,900 in cash that had been mailed by a 76-year-old retired medical doctor in California to Nigerians in Houston, TX. The retiree had unwittingly participated in various fraudulent Nigerian schemes for almost a year. Inspectors detained two Nigerian nationals and a conspirator after they made numerous attempts to retrieve the parcel from a Post Office. Inspectors also detained a fourth man who had a number of counterfeit financial documents in his car. The suspects were arrested and convicted in U.S. District Court.
Inspectors notified the Economic & Financial Crimes Commission in June 2006 about two other suspects in Nigeria, who were subsequently arrested and charged with defrauding U.S. victims. Losses to victims exceeded $500,000.
Homicides, Assaults, and Threats
The U.S. Postal Inspection Service is committed to ensuring employee safety in the workplace. Postal Inspectors investigated 950 postal-related assaults and credible threats during FY 2006 and arrested 395 suspects. Inspectors seek prosecution in assault cases when appropriate.
Following are examples of assault investigations conducted by Postal Inspectors in FY 2006.
- A man was sentenced in Georgia to life imprisonment in January 2006 for assaulting and attempting to murder a federal employee and using a firearm in the commission of a crime. On June 29, 2005, the man left his home in Snellville, GA, and approached a letter carrier, who stood at his official vehicle while preparing to deliver mail. The man brandished a semiautomatic .380-caliber gun and shot the carrier seven times in the arm and abdomen. He then drove himself to the Snellville Police Department, where he confessed to the shooting. He stated he shot the letter carrier specifically because the carrier was a federal employee. The shooter had medical bills totaling more than $90,000 and was in fear of losing his home. He felt that convicted bomber Eric Rudolph was being treated well in federal prison, and that was better than becoming homeless. He believed the easiest way to be prosecuted would be to kill a federal employee. He fled the scene after shooting the carrier only because he did not want to be shot by police. Inspectors obtained a federal search warrant and recovered the firearm in the assailant’s vehicle.
- A former letter carrier was sentenced to life in prison in July 2006 in Baker City, OR. He received a mandatory minimum sentence of 25 years for murdering his supervisor and an additional 10 years for the attempted aggravated murder of his postmaster. On April 4, 2006, the letter carrier ran over his supervisor with a postal van in the parking lot of the Baker City Post Office. The carrier then ran into the Post Office, brandishing a handgun and seeking the postmaster. When he was unable to locate the postmaster, he ran back to the parking lot and shot his supervisor repeatedly, killing her. He also fired shots at his supervisor’s personal vehicle. Postal Inspectors responded to the scene and provided critical investigative assistance to Oregon State Police and support to postal managers.
- On January 30, 2006, at 9:15 p.m., Jennifer San Marco, a 44-year-old mentally disturbed woman, gained access to the Santa Barbara Processing and Distribution Center at Goleta, CA, brandishing a nine millimeter semi-automatic handgun. She shot six postal employees who were on duty at the facility, five of whom died as a result of their wounds. San Marco died at the scene of a self-inflicted gunshot. It was later discovered that, before arriving at the facility, she had murdered a former neighbor. Postal Inspectors, the Santa Barbara Sheriff’s Department, the FBI, and other local and state agencies were involved in the investigation. San Marco was at one time employed by the Postal Service, but had left the state and had been medically retired since June 2003.
Robberies pose a threat to postal employees, jeopardize the public’s trust in the mail, and attack the financial integrity of the Postal Service. Postal Inspectors in all parts of the country receive expert training on how to safeguard employees and facilities against criminals, but the U.S. Mail and Post Offices will likely remain compelling targets for larceny.
Thieves who attack letter carriers seek mail containing valuables—such as jewelry, checks, or financial information—or keys to mail receptacles that give them greater access to even more mail. Those who target postal facilities are usually after cash and money orders.
Statistics for robberies that occurred in the past two fiscal years are shown in the chart at right. Five-year robbery trends are depicted in the graph at right. Inspectors aggressively and thoroughly investigate all postal robberies and attempted robberies.
Following are examples of robberies investigated by Postal Inspectors in FY 2006.
- Postal Inspectors apprehended a man and woman for the June 2006 armed robbery of a letter carrier who was delivering mail on his route in Portland, OR. The carrier was approached by the woman, who grabbed him by the collar and attempted to use a taser gun on him. As the carrier attempted to fight off the attacker, the man appeared and stole two trays of approximately 500 to 600 pieces of mail. Inspectors and the Portland Police Bureau responded to the scene, obtained a federal search warrant for the suspects’ home, and recovered the stolen mail. The suspects were indicted, but a trial has not yet been scheduled.
- Following an arrest by Postal Inspectors, two suspects were indicted in August 2006 for the July armed robbery of a Decatur, GA, letter carrier. The carrier had just collected a remittance of about $19,000, including $17,000 in cash and $2,000 in checks and postal money orders. One man confronted the carrier with a knife during the robbery, and another drove the getaway car. The carrier was slightly injured during the confrontation. Inspectors and local police arrived on the scene, located the getaway vehicle, and identified the suspects, one of whom was a former postal employee. Postal Inspectors arrested the men on a criminal complaint for armed robbery of a letter carrier, and they were held without bond for an initial appearance. A true bill was returned against both suspects for assault and armed robbery.
- Postal Inspectors arrested two suspects in January 2006 for the armed robbery of the Plantersville, AL, Post Office. Earlier that month, a man walked into the Plantersville Post Office with one hand in his pocket, as if he had a gun. He took off with $852 in cash, 75 blank money orders, three money orders, and a money order imprinter. A woman was later detained by Postal Inspectors and Birmingham police for possessing three postal money orders stolen in the Plantersville robbery. The customer, who was a known prostitute, said she received the money orders on the prior evening from a man later identified as a suspect. He had just been released from prison after serving 18 years for armed robbery. The man confessed to the crime and named a male accomplice. A federal indictment was obtained for both men.
- A letter carrier was indicted in December 2005 after being identified by Postal Inspectors for three armed robberies that occurred in 2000 and 2001 at the Midtown and Embry Hills Postal Stations. A total of $70,000 was stolen. The employee was identified by Inspectors on the Robbery Task Force of the Atlanta Division, who reviewed documents and evidence from the two postal stations. Following a polygraph examination, the suspect admitted to Inspectors he had committed the robberies.
Postal Inspectors reported some break-ins at postal facilities in rural areas of the country. Roughly 86 percent of burglaries in the past fiscal year resulted in minor losses of less than $1,000, or the theft of fewer than 100 postal money orders. The graph at left depicts postal burglary trends over the past five years.
Following are examples of burglaries investigated by Postal Inspectors in FY 2006.
- Postal Inspectors investigated the March 1, 2006, burglary of the Post Office in Early Branch, SC, after a man entered the workroom floor via the 24-hour lobby and took $40 in cash from an employee’s personal box, a $200 Postal Service money order, and a postal scale valued at $800. Postal Inspectors and Hampton County sheriff’s detectives identified and arrested a suspect in June 2006, although he attempted to evade arrest by hiding inside a space in the wall of his home. The suspect confessed to the robbery and was indicted in June 2006.
- Postal Inspectors arrested a man in June 2006 for the July 2004 burglary of the Tortilla Flat, CA, Post Office. He entered a building through a rear window and made off with the safe, which contained all of the stamp stock, $3,130 in cash, and three postal money orders. Forensic specialists later recovered a drop of blood from the crime scene. Inspectors identified a suspect in the burglary, and the man voluntarily submitted blood for testing. The DNA in the blood left at the scene matched the DNA of the blood from the suspect.
- Postal Inspectors, officers from the Honolulu Police Department, and agents from the U.S. Secret Service arrested 12 suspects in June 2006 for cashing or trying to cash postal money orders. The money orders were stolen in the burglaries of the Kaimuki and Aina Haina Postal Stations in Honolulu, HI, which were burglarized in January 2006. The thieves took 85 blank postal money orders, seven of which were International money orders. Also stolen was an official Postal Service arrow key. Investigators found that 22 postal money orders had been cashed. Suspects attempted to cash three more. Losses to the Postal Service totaled more than $22,676.
Postal Inspectors use a variety of methods to investigate embezzlements of postal funds when Post Offices experience unusual shortages. Improper procedures are reported to postal managers for corrective action, but when employees are found to be responsible, remedies may include administrative action and criminal prosecution, with possible incarceration and court-ordered restitution.
U.S. Postal Inspection Service investigations in FY 2006 resulted in the identification of more than $2.85 million in postal embezzlements and in the arrests of 204 suspects. A total of 194 suspects were convicted on related criminal charges, some of which were related to crimes investigated in previous reporting periods. Employees found responsible for missing postal funds are reported to managers for appropriate administrative action. Even if their conduct fails to meet criteria for criminal prosecution, they may still be removed from the Postal Service.
Following are examples of financial investigations investigated by U.S. Postal Inspectors in FY 2006.
- In August 2006, a 41-year postal employee assigned to maintain stamp stock at 33 self-service postal vending machines on the Gulf Coast was prosecuted in U.S. District Court. During an interview with Postal Inspectors, the employee admitted taking in excess of $288,000 from the machines to support a gambling habit. Sentencing is pending.
- Postal Inspectors identified the postmaster at Berlin, NY, in February 2006 for embezzling approximately $69,900 in postal funds. The postmaster tendered his resignation from the Postal Service, and federal prosecution is pending.
- Postal Inspectors in Kotzebue, AK, determined that the postmaster was sending remittances to the bank about one month after the actual dates of business. The postmaster admitted to Inspectors that he had embezzled approximately $130,000 from deposits between November 9 and December 1, 2005, to support a gambling addiction. Prosecution is pending.
Victim-Witness Assistance Program
Federal legislation mandating certain rights for victims and witnesses of crime was passed in 1982. As part of the Victim Witness Protection Act, Congress instructed the Attorney General to assure that all federal law enforcement agencies adopt guidelines consistent with the purposes of the act and related legislation. The U.S. Postal Inspection Service is committed to working with the Department of Justice and the law enforcement community in sharing its “best practices” on victim-witness guidelines. A victim-restitution fund will be established as the result of an Inspection Service corporate fraud case against Adelphia Communications Corporation. The fund will distribute $715 million, seized by Postal Inspectors, to investors who lost billions of dollars when the company collapsed in 2002. This fund represents a significant achievement for victims’ rights.
Each Inspection Service office has several employees who serve as resources of information for victims, Inspection Service personnel, and the U.S. Attorneys’ Offices. They make referrals for services to victims and educate Inspection Service employees regarding victim rights, legislation, and current policy and procedures. Training was emphasized this year as a formal Victim-Witness Assistance Program was rolled out for personnel at division locations.
A Guide for Victims and Witnesses of Federal Crimes
The Postal Inspection Service ensures obligations to victims and witnesses are fulfilled. The backbone of its Victim and Witness Assistance Program is Publication 308, Know Your Rights: A Guide for Victims & Witnesses of Federal Crimes. The brochure explains victims’ rights, the investigative process, notifications of arrest, threats or harassment of victims or witnesses, and helpful information on available assistance. It augments the role of Inspection Service personnel in providing assistance to victims and witnesses of crime. Publication 308 was modified and reprinted this year in English and Spanish-language versions.
Victim Notification and Services
The Postal Inspection Service was one of the first federal law enforcement agencies to contribute to the Department of Justice’s Victim Notification System in July 2004. As an early leader in assisting victims and witnesses, the Inspection Service modified its case-management system and developed alternate methods of victim data entry to ensure victims were notified of their rights in a timely manner. Inspection Service employees mailed system-generated letters to more than 88,000 victims in FY 2006 to notify them of their rights and disseminate useful information about program resources and services.
During FY 2006, the Postal Inspection Service sponsored a variety of outreach services for victims, including the following activities:
- 3,501 information and referrals for victims
- 1,299 cases of criminal justice support
- 1,799 cases of assistance with identity theft
- 473 cases of assistance for elderly victims
- 499 incidents of victim advocacy.
The Postal Inspection Service installed toll-free 1-800 phone numbers in its offices to provide crime victims with a convenient, cost-free way to contact victim-witness coordinators. Following are examples of outreach services provided to victims in FY 2006.
- An elderly couple who lost $800,000 in an investment-fraud scheme and encouraged their daughter to invest $200,000 were assisted and given referrals by an Inspection Service victim-witness coordinator. The coordinator researched and contacted local service agencies to obtain information on counseling services and compensation information. The coordinator also maintained constant contact with the elderly victims, who not only appreciated the information, but personally thanked her “just for being there to listen.”
- Victim notification letters were sent to more than 4,000 victims of a work-at-home scheme operating out of central Illinois. A Postal Inspection Service victim-witness coordinator spoke with many of the victims, who were disturbed by their experiences. Coordinators instructed victims about various fraud schemes and how they could protect themselves from such scams. In one instance, a victim had wired money and given his Social Security number to two “financial services institutions,” purportedly for loans granted to people with only fair or bad credit. The coordinator provided information about these types of schemes and steps the victim could take to protect his credit and identity. The victims were impressed by the concern of the Inspection Service and were appreciative of the support and information provided.
- Victim-witness coordinators from the Postal Inspection Service contacted some 4,800 citizens who had lost more than $17 million in a telemarketing and boiler room scheme in Tempe, AZ, to notify them of their rights and the availability of victim services. Scheme operators ran Web sites promising people they could earn money from referrals generated by the customer’s Web site or from products purchased at the customer’s site. Various advertising packages were supposed to generate traffic, but few people made money, despite large investments.
Victim-Witness Education and Prevention Initiatives
The Postal Inspection Service sponsors consumer-awareness campaigns and congressional liaison. It also produces educational publications and video productions to increase public awareness, especially among older Americans, on how to protect themselves from fraud and avoid becoming victims. For the past two years the agency has partnered with the Office for Victims of Crime to help promote victim rights during National Crime Victims’ Rights Week.
The Postal Inspection Service and the Office for Victims of Crime took advantage of the Postal Service infrastructure to promote victim rights in April 2006. Approximately 12,000 postal retail outlets displayed a poster, Victims’ Rights: Strength In Unity, and distributed more than 1.3 million fliers listing toll-free numbers for victim-service organizations. It was estimated the campaign reached 7 million postal customers a day. The Postal Service’s Stamp Fulfillment Center also added 30,000 envelope stuffers about the campaign to Stamps By Mail orders.
All the King’s Men, a Postal Inspection Service-produced DVD, provides information for victims of financial crimes. It was released during the April campaign, when more than 81,000 of the free DVDs were provided to victims, law enforcement agencies, prosecutors’ offices, and special-interest groups to help educate the public about the rights afforded to crime victims.
Media networks were also employed to educate victims about their rights. Articles, including Spanish versions, appeared in 228 newspapers in nine states and were read by more than 9 million customers. Television spots were broadcast 147 times in 26 states and reached an audience exceeding 64 million. More than 585 radio broadcasts in 36 states reached some 47 million listeners. In the Washington, DC, area, hundreds of radio ads were heard during peak drive times, reaching approximately 2.7 million listeners. An ad that doubled as a resource guide, Crime Victims Have Rights Too, was printed in the International Association of Chiefs of Police magazine, The Police Chief.
A new Web site devoted to victims’ rights was posted at www.usps.com/postalinspectors. The site contains information on victims’ rights and services, how to order free consumer-fraud DVDs, and consumer-prevention tips. Publications, links to fraud-prevention and victim rights’ Web sites, and a Postal Inspection Service division locator are also on the site.
The U.S. Postal Inspection Service continues to use asset forfeiture laws and regulations to target the financial incentive criminals may gain from postal-related crimes. Postal Inspectors investigate drug trafficking, identity fraud, and other financial crimes to identify money and assets derived from illegal activity involving the U.S. Postal Service or the U.S. Mail. In the past year, 30 forfeiture support personnel completed specialized forfeiture training.
Postal Inspectors seized 896 illegal assets and secured 788 forfeitures in FY 2006, and forfeiture activity netted $9.4 million. As the result of successful asset forfeiture actions, the Postal Inspection Service shared $2.1 million of funds with other federal, state, and local law enforcement agencies.
Postal Inspectors and DOJ investigators arrested Phillip R. Bennett, president and CEO of Refco Group, Ltd., in October 2005 on suspicion of investment-related fraud. Inspectors found that, beginning in the early 1990s through October 2005, Refco and its subsidiaries hid from auditors and investors huge losses incurred by the company and its customers via trading in financial markets. On numerous occasions, Bennett transferred losses from Refco to RGHI, an entity in which he held substantial ownership interest, to conceal losses at year- and quarter-end. Refco then falsified public filings with the U.S. Securities and Exchange Commission before going public in August 2005. Based on a fraudulent registration statement, investors purchased approximately $583 million worth of Refco common stock. When Refco announced in October 2005 that it had a $430 million receivable, the market price for its stock plummeted, resulting in losses of more than $1 billion. Bennett and his co-conspirators orchestrated the fraudulent transactions via the mail, hiding the fact that Refco was hundreds of millions of dollars in debt. In November 2005, a $700 million forfeiture judgment was filed against Bennett, and $67.2 million was seized from his holdings. In June 2006, a verified complaint seeking forfeiture of $337.5 million for contingent funds from other entities owned by Bennett and his cohorts was filed with the U.S. District Court in the Southern District of New York on the premise that Bennett’s money constituted property derived from proceeds of a wire and securities fraud scheme. The forfeited money will be held in an account with the U.S. Marshals Service, to be restored to victims of the offense. The U.S. Postal Inspection Service was the sole investigating agency in the case.
Workers’ Compensation Fraud
Monetary compensation and medical benefits paid to employees who sustain job-related injuries are a major expense to the Postal Service, which is responsible for funding workers’ compensation benefits. The Postal Service has accrued approximately $7.5 billion in future liability for workers’ compensation claims since its reorganization in 1971.
Postal Inspectors have aggressively investigated workers’ compensation fraud for many years, working closely with the Postal Service’s Injury Compensation units to flag potentially fraudulent claims. Investigative leads helped Postal Inspectors bring offenders to justice while annually saving the Postal Service hundreds of millions of dollars in liability for fraudulent claims. In FY 2006, investigative responsibility for workers’ compensation fraud was transferred to the Postal Service’s Office of Inspector General (OIG). Inspectors continue to work closely with agents from the OIG to help prepare them to assume these cases through training, guidance, and other assistance as needed.
In FY 2006, Postal Inspectors’ investigations of workers’ compensation fraud identified more than 528 suspects, resulted in the arrests of 18 individuals, and recovered more than $400,000 in benefits paid to fraudulent claimants. Inspectors also reported that 22 suspects were convicted of crimes related to fraudulent workers’ compensation in FY 2006.
The U.S. Postal Inspection Service investigates criminals who attempt to use postal money orders to launder illicit funds and avoid federal reporting requirements in violation of the Money Laundering Control Act and the Bank Secrecy Act. Illicit proceeds may include money gained through narcotic sales, smuggling illegal aliens, tax evasion, or selling counterfeit merchandise.
During FY 2006, Postal Inspectors arrested 85 suspects on charges related to money laundering, and 154 convictions were reported during the same period. Following are examples of money laundering cases investigated by Inspectors in the past fiscal year.
- Postal Inspectors arrested a California man in June 2006 for using U.S. Postal Service money orders to launder cash proceeds from a marijuana-trafficking ring. He varied his purchases of the money orders to avoid filing federal documents required for currency transactions greater than $3,000 a day. The case began when Inspectors analyzed money order purchases in September 2004 and noted suspicious activity by a Missouri businessman. They determined the man was using his retail business to distribute marijuana he got from a California supplier and was “laundering” the cash through illegal purchases of more than 350 postal money orders worth more than $340,000. Postal Inspectors executed search warrants at the man’s home and business, as well as at his supplier’s residence in Novato and recovered more evidence of money laundering; an indoor marijuana-growing operation; significant quantities of marijuana, oxycotin, and morphine; approximately $40,000 in cash; and information on other assets, including cars, a boat, an airplane, and real estate.
Inspectors arrested the supplier at the scene, and the man was indicted on multiple charges. A plea agreement was officially filed that included the forfeiture of the $40,000 that was initially seized, plus a sum of $227,000, representing the proceeds of the drug conspiracy.
- Postal Inspectors and IRS agents who executed federal search warrants in February 2006 seized three certificates of deposit worth more than $600,000 belonging to a West Virginia man and his wife. Criminal forfeiture is being pursued by the U.S. Attorney’s Office. The couple co-owned a motorcycle accessory business and allegedly laundered a portion of the cash proceeds to avoid reporting income to the IRS. They “structured” their cash purchases of Postal Service money orders to avoid federal reporting and conceal a significant portion of their revenue. From June 1999 through September 2005, they solicited others to purchase groups of postal money orders slightly under the $3,000 daily limit, which would have required them to file financial reports describing the transactions. In this way, the owners were able to considerably underreport their income to the IRS. Postal Inspectors identified $263,000 in structured postal money orders attributable to the group, and their investigation is continuing.
Postal Inspectors determine which products and sources of revenue pose the highest financial risks to the Postal Service and target their investigations accordingly.
Inspectors measure the effectiveness of their revenue investigations by the number of postage fraud schemes they identify and successfully resolve. In addition to stopping the scheme, the “resolution” may involve sending the perpetrator to jail, recouping lost funds if possible and, as appropriate, collecting fines and penalties from the perpetrators.
Postal Inspectors initiated 202 new investigations related to postal revenue in FY 2006. They arrested 80 suspects for revenue-related crime and reported 50 convictions in the same period, some from cases initiated in prior reporting periods. Civil settlements, voluntary restitution, and court-ordered fines, penalties, and restitution totaled more than $2.3 million in FY 2006.
Following are examples of investigations conducted by Postal Inspectors in FY 2006 involving underpayment of postage, trafficking of counterfeit postage, and the purchase of postage through fraudulent means.
- Thomas J. Rueli, of Springfield, MA, president and owner of Total Logistic Services Inc. (TLSI), a national mail consolidation company, contracted with several companies to deliver their mail to Postal Service facilities nationwide. TLSI billed the companies for the service, but Postal Inspectors determined that Rueli paid a recycling company to remove more than a million pounds of the mail from the TLSI warehouse, rather than deliver it to the Postal Service. Inspectors executed a federal search warrant and recovered the mail from the recycling center before it was destroyed. More than 17 million mailpieces, with postage valued at approximately $2.5 million, was recovered in the search. In addition to losses from wasted postage, the companies spent more than $2 million to produce and prepare the mail. In January 2006, a federal grand jury indicted Rueli on 14 counts of mail fraud in connection with the scheme, and Postal Inspectors arrested him at his office.
- Postal Inspectors in New Jersey arrested Silvio Martinez in August 2006 at his home in Homestead, FL, on charges of counterfeiting meter postage. Inspectors also executed a search warrant at National Fulfillment Services, a direct marketing and major business mailer in Garfield, NJ. Postal Inspectors arrested two others in connection with the scheme and recovered a postage meter with a counterfeit plate. Martinez had been buying counterfeit postage for 50 percent of its face value. More than $1 million in counterfeit postage had been printed on the altered meter.
Beginning in mid-2005 through May 2006, the U.S. Postal Inspection Service received numerous complaints of mail theft throughout Denver, CO. Many of the break-ins involved attacks on apartment panels and neighborhood delivery and collection box units. Postal Inspectors on the Denver External Crime Team developed evidence of a large mail theft and check fraud ring, and partnered with other federal and local law enforcement agencies to investigate the problem. Following an extensive surveillance of targeted areas and the execution of consent, residential, and electronic media search warrants (including a “no-knock” search warrant with a local SWAT team), Inspectors identified more than 30 suspects linked to 71 criminal cases and 51 complaints recorded in the Financial Crimes Database. Inspectors arrested seven suspects in September 2006 pursuant to a 70-count indictment on charges of violation of the Colorado Organized Crime Control Act (equivalent to the RICO statute) and conspiracy to commit computer crime, theft, forgery, criminal impersonation, and other offenses resulting in fraud against financial institutions and area businesses. Members of the Department of Energy’s Office of Inspector General and the Denver District Attorney’s Office assisted with the case, which is ongoing, and more arrests are anticipated. Volume mail attacks in the Denver area have since dropped from a high of 40 in December 2005 to two attacks in May 2006. Pictured with some of the evidence seized in the investigation are (left to right) Postal Inspectors Kenneth Haithcoat, Andrew Jones, and Richard Sheehan II; U.S. Department of Energy Special Agent Nicole Dotson; and a chart indicating local cases related to the investigation.
Postal Inspectors in 2004 began seeing a significant increase in the number of counterfeit checks and money orders entering the country via mail from West Africa. As a result, Inspectors teamed with officers from the U.S. Customs and Border Protection Service in March 2005 to interdict suspect, incoming parcels at New York’s John F. Kennedy Airport. Following the seizure of more than $80 million in counterfeit financial instruments, the British Customs and Revenue Service established a full-time interdiction at London’s Heathrow Airport, where officers have since seized more than $300 million in counterfeit financial instruments—sparing U.S. and British financial institutions millions of dollars in potential losses. In the photo above are counterfeits seized by Postal Inspectors from August through October 2006. Pictured here from the New York Division with seized counterfeits are General Analyst Celinda Harris; Postal Inspectors Mitchell Ecker, Brian Wilson, Robert Klaus, Stephen Korinko, and Zinkin Chin; and General Analyst Eliza Rivera.
Postal Inspectors arrested Rickey Davis at his home in Lancaster, CA, for the armed robbery of a letter carrier on March 31, 2006. Inspectors located Davis after someone identified him from a Wanted Poster with a composite sketch of the suspect, which Inspectors circulated in the area. Robbery of U.S. Mail, money, or other property from a Postal Service employee or facility is a federal offense, punishable by up to 25 years in prison, and the U.S. Postal Inspection Service may pay a reward of up to $50,000 for information leading to the arrest and conviction of anyone involved in the robbery of a postal employee or facility.
Dangerous Mail and Homeland Security
Biological or Chemical Hazards in the Mail
In FY 2006, the U.S. Postal Inspection Service responded to 2,494 incidents involving unidentified powder, as reported by postal employees, customers, and other federal agencies. The unidentified substances were found in the Postal Service’s critical infrastructure, at postal facilities, and in U.S. Mail. Postal Inspectors’ investigations of these incidents resulted in 11 arrests, and 17 convictions were reported during the same period.
Field-Screening Equipment for Unidentified Substances
Beginning in May 2005, the Postal Inspection Service purchased and deployed at postal facilities throughout the country 88 sets of equipment that screen for unidentified substances in the mail. By year-end FY 2006, staff from the Dangerous Mail Group certified 167 Postal Inspectors in the use of the equipment. Postal Inspectors used the equipment to screen all unidentified substances and determine whether they were non-hazardous and posed no threat. Inspectors found that, in more than 36 percent (899) of the incidents, the field-screening equipment enabled Inspectors to positively determine that the substances posed no threat and were non-hazardous.
The success of the program is the result of expanded deployment of the equipment, the certification of additional Postal Inspectors to operate the equipment, and employee education. In FY 2006, Postal Inspectors presented more than 600 educational seminars on mail safety for employees, media outlets, and other law enforcement or government agencies. As a result, postal facility evacuations were down 14 percent nationwide this past year. This translates to savings in productivity, workhours, delayed mail, and operating costs associated with unnecessary evacuations. Further, unnecessary requests for local first responders have been eliminated, freeing responders to take action in the event of other emergencies in a timely fashion.
Explosive Devices in the Mail
During FY 2006, Postal Inspectors responded to 1,169 incidents of suspicious items found in postal facilities or equipment, explosives placed in private mail receptacles, and hoax devices. The investigations resulted in 54 arrests and 61 convictions. Most of the incidents involved false alarms or items inadvertently left behind by customers. The remaining incidents involved hoax devices or homemade explosives and common fireworks used to vandalize mailboxes.
Mail bombs are quite rare. During FY 2006, Postal Inspectors investigated two improvised explosive devices sent via the mail. Both devices were discovered before they could be delivered to the intended targets and neither exploded or caused injury.
In June 2006, an alert postal employee at the Manchester, NH, Processing and Distribution Center contacted Postal Inspectors for assistance with a suspicious mail parcel that seemed to be leaking gasoline. A Postal Inspector trained as a dangerous mail specialist responded to the scene. These Inspectors use equipment to assess potential threats in the mail and are notified when potential hazardous material is found. In this instance, the Inspector conducted a threat assessment and used a portable X-ray machine to identify the contents. The X-ray vaguely displayed what looked like components of an improvised explosive device. The parcel was removed from the postal facility and rendered safe by local bomb specialists. Inspectors are continuing their criminal investigation of the mailing, but the incident demonstrates the value of the “all hazards” approach used by Postal Inspectors to ensure the safety of postal employees, the public, and the U.S. Mail.
If a mail bomb detonates, Postal Inspectors first tend to anyone injured in the blast and then secure the crime scene. Inspectors intensively comb the area for clues and submit the evidence to the National Forensic Laboratory for further analysis. Document and forensic experts examine postmarks, postage, handwriting, fingerprints, and any other evidence that could yield investigative leads. Postal Inspectors follow every lead to bring the mailers to justice.
Investigations of Unidentified Substances in the Mail
Postal Inspectors respond rapidly to reports of unidentified substances in the mail and threats involving chemical or biological material. Although most do not involve criminal intent, a rapid response ensures that Inspectors are on hand at the earliest opportunity when mail is intentionally used to convey chemical, biological, radiological, or explosive weapons.
Postal Inspectors in FY 2006 responded to 2,494 incidents involving potentially hazardous substances, as well as to 1,169 incidents of explosive devices placed in private mail receptacles, hoax bomb devices, suspicious items found in postal facilities or equipment, mailed explosive devices, and 128 other misuses of the mail. The materials were harmless, but Inspectors aggressively investigate even the threatened use of dangerous material.
Postal Inspectors arrested 153 suspects in FY 2006 for such crimes and reported 153 convictions, some from cases initiated in prior reporting periods. Following are examples of their investigations from the reporting period involving threats of chemical or biological materials, explosive devices, or other misuses of the mail.
- Postal employee Beverly Tillman-Smalls was sentenced in Virginia to serve five days of a 180-day sentence for disorderly conduct. Postal Inspectors determined that, during an employee-sponsored bus trip, Tillman-Smalls called another postal employee’s cell phone and left a message claiming a bomb was on the bus. Her actions resulted in responses by Inspectors, Maryland State Police, Montgomery County Police, and the Montgomery County Fire Department. The bus was evacuated, and Interstate 495 was closed for about three hours.
- Eugene J. Matisko and Michael B. Ancherani were convicted in Pennsylvania on charges of using an explosive device to commit a felony. Matisko was sentenced to 11 years in prison and 10 years’ probation, and Ancherani was sentenced to five years’ probation. The two were part of a gang that manufactured and sold explosives used to destroy mail collection boxes in Scranton. Postal Inspectors working with Scranton Police and other law enforcement agents executed a search warrant on Matisko’s bedroom and uncovered illegal child pornography, including nude photographs of a 13-year-old child. Matisko admitted to molesting the child over a two-year period.
- Marvin Santiago-Reyes was convicted and sentenced to two years in prison for using a communication device to transmit multiple bomb threats to postal facilities in Puerto Rico. Santiago-Reyes’ actions resulted in evacuations of multiple postal facilities, lost workhours, delayed mail, and deployment of local hazmat, joint terrorism task forces, and bomb units at the affected facilities. No bombs were found. Inspectors traced the 911 call to a phone booth. Their review of security footage from a nearby hotel and surveillance resulted in Santiago-Reyes’ identification and arrest.
- Patrick Pride, an inmate at an Indiana correctional facility near Carlisle, was sentenced to 77 months in prison in January 2006 for mailing a threatening communication. Postal Inspectors determined that Pride had mailed a letter with soap shavings to the clerk of the United States District Court to implicate another inmate. His federal sentence will run consecutively to a state sentence he is already serving, plus three years of supervised release.
- Postal Inspectors and an FBI agent arrested Ed Lenhoff at his home in Mather, PA, in March 2006 for mailing threatening communications. The investigation began on August 3, 2005, when Inspectors were notified that a customer received mail containing an unknown powder, with no written letter, at the Mather Post Office. Inspectors used field-screening equipment and determined that the substance was oyster shell calcium. After they interviewed the customer and postal managers, Inspectors identified Lenhoff as the prime suspect in the hoax mailing. A handwriting sample from Lenhoff and the letter were sent to the Postal Inspection Service’s Forensic Laboratory Services for analysis, and revealed Lenhoff as the writer of the suspect letter. Inspectors then interviewed Lenhoff, who ultimately confessed to mailing the hoax to the customer and provided a sworn statement claiming responsibility. While awaiting trial, Lenhoff took an overdose of drugs, resulting in an accidental death ruling by the state Coroner’s Office.
Respiratory Fit-Test Program
The U.S. Postal Service, 12 other federal departments and agencies, and the American Red Cross, are responsible for the U.S. Government Interagency Severe Acute Respiratory Syndrome (SARS) Concept of Operations Plan. The plan details coordinated responses by the federal government to an outbreak of SARS. The Department of Health and Human Services (HHS) is the lead federal agency, with other groups providing supporting roles. The Postal Service also includes planning for and responding to an influenza pandemic.
Preparation for the possible emergence of SARS, avian flu (H5N1), or other influenzas is critical. Postal Inspectors and Postal Police Officers have vital roles in the Postal Service’s SARS and Novel Influenza Pandemic Plan. Since June 2006, 47 Inspectors and Postal Police Officers have been trained and certified to conduct respirator fit-tests with the PortaCount Universal Fit-Test System. Respirator-fit-tests evaluate the fit of a respirator on an individual. Postal Inspection Service offices are equipped to fit-test all medically qualified Inspectors, Postal Police Officers, and Postal Service medical staff, approximately 3,000 individuals, each of whom will be fit-tested annually. In the event of an outbreak, duties may include securing postal facilities, managing traffic at facilities, securing sites and employees for quarantine or isolation, and escorting symptomatic employees off-site. The Postal Inspection Service’s program also provides personal protection to Postal Inspectors and Postal Police Officers assigned to respond to emergency situations. During FY 2006, staff from the Homeland Security Group procured half-mask respirators and other pandemic-preparedness accessories, such as gloves and special eye protection. Several phases of the program are required to be managed by the Occupational Safety and Health Administration (OHSA), including medical monitoring, the Respiratory Protection Program, and related recordkeeping. All employees must receive medical clearance to ensure they have no conditions that would preclude them from wearing a respirator. Additionally, staff members prepared an OSHA-compliant Respiratory Protection Program, which meets program standards.
Incident Master Software
To face the challenge of managing major incidents that could affect the U.S. Postal Service’s infrastructure or the U.S. Mail, the U.S. Postal Service in FY 2006 acquired Incident Master Software, which was adopted by the U.S. Postal Inspection Service. The Inspection Service integrated its critical-incident reporting system with Incident Master Software and trained more than 90 U.S. Postal Inspection Service personnel on its use.
Incident Master Software helps prepare comprehensive emergency-management plans and covers such areas as mitigation, preparedness, response, and recovery. During a real-time response, the plan becomes the Postal Inspection Service’s source for coordinating operations, logging, message management, personnel assignment, shelter management, and resource and personnel deployment. The software provides instant access to emergency-planning documents, integrates standard operating procedures with emergency plans, and displays locations of incidents, personnel, resources, and other crucial elements on a map, by address, or with latitude and longitude coordinates.
Incident Master Software fully supports the Inspection Service’s Incident Command System protocols and can quickly be deployed to provide facility and event security, as well as disaster preparedness and recovery.
Cities Readiness Initiative
The Postal Inspection Service continues its role in FY 2006 as a member of the Cities Readiness Initiative, a project involving federal, state, and local resources responsible for distributing emergency medications in the event of a biological attack on a metropolitan area.
Homeland Security Presidential Directive 12
In FY 2006, the Postal Inspection Service began implementing Homeland Security Presidential Directive 12, a “government-wide standard for secure and reliable forms of identification issued by the federal government to its employees and contractors.”
Implementation will occur in phases throughout the U.S. Postal Service. The current phase focuses on personal identity verification and credentials. It includes issuing identification cards with integrated circuits (smart cards) for all postal employees and contractors who must access non-postal, government facilities for the performance of their duties; all Postal Inspectors; and all special agents of the Postal Service’s Office of Inspector General. Additional phases will address the need for smart cards for physical-access control systems and for logical-access control to Postal Service computer network resources.
Postal Inspectors presented more than 600 educational seminars on mail safety for employees, media outlets, and other law enforcement or government agencies in FY 2006. As a result, postal facility evacuations were down 14 percent nationwide FYTD vs. SPLY.
A postal supervisor at the Peoria, IL, Processing and Distribution Center alerted Postal Inspectors in March 2005 after white powder escaped from a letter she had hand-canceled. Inspectors quickly transported the unopened letter to the Illinois Department of Public Health laboratory in Springfield, where it was determined the substance was harmless. A similar letter was mailed in February 2006. Both letters were addressed to the President of the United States and contained death threats. Inspectors traced the letters to local resident Jessica Moyer, who denied knowledge of them but later confessed she was the sender, admitting she wanted to implicate her soon-to-be ex-husband as the sender to ruin his chances for custody of their daughter. They arrested Moyer, who was ordered to undergo a psychiatric exam in July 2006. She was convicted and sentenced in October 2006 to six months’ home confinement and five years’ supervised release.
The protection of the U.S. Postal Service’s infrastructure, which includes its employees, buildings, transportation network, postage, and U.S. Mail, is an essential function of the U.S. Postal Inspection Service. Providing protection that is both effective and efficient is a constant challenge. The Postal Inspection Service’s Security Group meets that challenge through training, security reviews, and various prevention initiatives. Three week-long security training courses held by staff members in FY 2006 were attended by approximately 75 Postal Inspectors. Security Group staff also held a two-day strategic planning meeting in September 2006 for Postal Inspectors at field divisions who serve as security professionals. Participants discussed prevention and security objectives for the coming year.
The Postal Inspection Service’s expertise in mailroom security is sought by postal customers and mailers. Training on mailroom security was provided at the American Society for Industrial Security’s annual training seminar and at the 2006 National Postal Forum. Inspectors from the Security Group provided information for attendees on best practices for securing mail centers and mail, as well as useful facts about the work they do to ensure the safety and security of the U.S. Mail.
The U.S. Postal Inspection Service maintains an armed, uniformed Security Force of Postal Police Officers (PPOs) to provide ongoing protection for postal employees, mail, and property. Officers are assigned to facilities considered most at risk for crime. The presence of officers serves as a deterrent to criminal activity and creates an environment conducive to the safety of postal employees and customers. Security provided by PPOs is augmented with unarmed, contract security guards at certain Postal Service facilities.
In the past fiscal year, contract guards replaced PPOs at fixed-post locations, such as employee and vehicle entrances, to increase flexibility and mobility for PPOs, who must respond promptly to serious incidents. Using a mix of armed and unarmed guards has improved resource deployment overall.
In FY 2006, the U.S. Postal Inspection Service conducted reviews of 370 postal facilities chosen from a statistically valid sample representing large, medium, and small facilities. The reviews took into consideration risk factors such as the crime index against property and people for an area; risks from the areas surrounding facilities, such as nightclubs and bars; the history of crimes in or against the facilities; whether proper procedures are followed regarding access control; whether employees wear ID badges; and whether lock combinations are changed after employees leave. Countermeasures such as proper fencing in good condition, intrusion-detection systems, closed-circuit TV cameras, proper locks in good condition, security signage, and security force presence were also evaluated. After an initial review, Postal Inspectors provided each facility manager with a complete report, including recommendations for cost-effective solutions to reduce risks for the facility and provide a more secure environment for employees and the mail. Inspectors conducted a follow-up review at each facility to ensure corrective measures were taken. As a result of Inspection Service recommendations, overall Facility Risk Rating Model scores were reduced by 38 percent and high-risk facility scores were reduced by 24 percent.
Observations of Mail Conditions
At the request of the Postal Service’s Chief Operating Officer, the U.S. Postal Inspection Service conducted Observations of Mail Condition (OMC) reviews in FY 2006. In planning meetings with postal managers, Postal Inspectors determined that upcoming OMCs would focus on the security of Postal Service employees and assets in addition to conditions for First-Class Mail, Priority Mail, Periodicals, Standard Mail, and mail-transport equipment. Over the past fiscal year, Inspectors adjusted weekly schedules for OMCs based on changes in customer-mailing cycles and ongoing analyses of program results.
The Deputy Postmaster General and Chief Operating Officer developed process indicators, known as 24-Hour Indicators, to ensure mail was delivered on time. To provide independent feedback and timely results, OMCs conducted by Postal Inspectors included mail conditions for specific process indicators.
Inspectors held meetings with Postal Service managers at areas, districts, and processing and distribution centers to discuss OMC objectives. Inspectors also met with facility managers or their designees following each week’s observations to share information from the reviews and, as appropriate, develop plans for corrective action.
The OMCs evaluated the security of employees and assets, verified the reporting integrity of certain line items in the Mail Condition Reporting System and Customer Service Daily Reporting System, identified excess rotary locks at some facilities, and observed mail- processing volumes and workhours.
Postal Inspectors performed OMCs at 1,035 postal and contractor facilities in every Postal Service area and all districts. In FY 2006, Inspectors issued 17 weekly OMC reports to the Chief Operating Officer. The reports identified 669 security deficiencies significant enough for special attention by the Chief Operating Officer, and 115 deficiencies related to operational issues.
Key security concerns identified by Inspectors as improvement opportunities throughout FY 2006 included issues related to Registered Mail, facility access, vehicle access at facilities, facility keys, ID badges, and personal belongings on the workroom floor.
Postal Inspectors focused on the security clearance status of highway contract route employees in FY 2006, reviewing selected routes at each of the 80 postal districts to ensure compliance with such regulations as employment eligibility, drug screening, and criminal-history checks. The routes were reviewed at the beginning of the fiscal year and again at fiscal year-end to determine the rate of compliance and improvement. Of the 390 routes examined, full compliance improved from 48 percent to 71 percent.
Staff at the Postal Inspection Service’s Security Investigation Service Center at Memphis, TN, process security clearances for all Postal Service employees and contractors. In FY 2006, staff processed approximately 63,000 clearance requests and denied more than 800 of the requests.
Postal Inspectors must respond to a wide array of man-made and natural disasters that can affect postal operations across the country. The disasters may range from truck or train accidents, which may expose mail to security hazards, to raging floods or tropical storms that can destroy mail, close postal facilities, and endanger employees. Postal Inspectors respond immediately to the scene of the incident and provide security guidance to postal managers, ensuring that infrastructures are secure and operational and that postal employees are safe from harm.
In one case from FY 2006, Postal Inspectors from the New York Division worked with personnel from the Postal Service’s Albany District on June 30, 2006, in an attempt to recover more than 30,000 pieces of First-Class Mail from a submerged tractor-trailer in a tributary of the Susquehanna River. The mail was on its way from northern New York to the New England area when the truck fell into a 150-foot wide chasm that cut across Interstate 88 as a result of flash flooding. The driver of the truck was ejected from his vehicle and killed. Following the accident, the tractor-trailer floated toward the Susquehanna and lodged against a bridge a quarter mile from the accident scene, where it was recovered two days later. Postal Inspectors and other officials were unable to salvage the mail, not only because of its water-sodden condition but due to the possibility of contamination by chemicals, manure, or other elements found in floodwater. Postal Inspectors ensured the mail was kept secure and that no confidential or financial information was exposed until the decision was made to destroy it. Mail recovery personnel ensured that accountable mail records were updated and mailers were notified of the losses within days of the incident.
During Employee Appreciation Day at the Santa Clarita, CA, Processing and Distribution Center in May 2006, a Postal Police Officer fingerprinted a postal employee’s child as part of a child-safety program.
At the request of the Postal Service's Chief Operating Officer, Postal Inspectors conducted Observations of Mail Condition reviews in FY 2006 that focused on the security of Postal Service employees and assets, in addition to conditions for mail and mail-transport equipment.
Child Exploitation via the Mail
Postal Inspectors arrested 250 suspects and identified and stopped 58 child molesters in FY 2006 as part of the U.S. Postal Inspection Service’s continuing efforts to rid the U.S. Mail of child pornography. Inspectors also rescued 93 children from sexual abuse and exploitation. In the past fiscal year, Inspectors initiated 291 new investigations involving child exploitation, and 734 other investigations are ongoing.
In February 2006, the Attorney General announced Project Safe Childhood, a Department of Justice initiative aimed at preventing the exploitation of children through the Internet. Project Safe Childhood was formalized in May with the publication of a brochure that provides guidance for federal prosecutors, law enforcement groups, and other partners in the fight to protect children. Because nearly all cases of child exploitation investigated by Postal Inspectors involve the Internet as well as the U.S. Mail, the Postal Inspection Service was asked to join with the Department of Justice in this important initiative. The Inspection Service is a full partner in Project Safe Childhood and will continue to apply its expertise to mail-related cases while working with U.S. Attorneys and other law enforcement agencies.
Deliver Me Home is a joint program of the National Center for Missing and Exploited Children (NCMEC), the U.S. Postal Inspection Service, and the Postal Service. Postal Inspectors and other law enforcement officers use the program as a tool for investigating cases of abducted or missing children. Combining agency resources increases the chances that an abducted, lost, or missing child will be found and safely delivered home. In the past fiscal year, Deliver Me Home was successful in locating 20 missing children, bringing the total to 49 children located since the program began in September 2004. Integral to Deliver Me Home are the missing children flyers. Postal Inspectors dispatch flyers to targeted ZIP Codes to alert communities and seek information that may help locate a missing or abducted child.
Following are examples of child exploitation investigations conducted by Postal Inspectors in FY 2006.
- Postal Inspectors arrested a man in Vallejo, CA, in December 2005 for attempting to receive child pornography in the mail. Although he was a senior deacon and elder of his church, he admitted to Inspectors that he had been sexually abusing two of his three daughters since they were four years old. He persuaded the girls’ mother to participate in the daily molestation. Inspectors also learned the 66-year-old man had recently attempted to persuade his 37-year-old daughter to enter into a sexual relationship with him and her 15-year-old daughter. In April 2006, he pled guilty to distributing and receiving child pornography and was sentenced to 22 years in federal prison.
- Frank Cheatham Baird of Birmingham, AL, was sentenced in June 2006 to 100 years in federal prison for possessing and distributing child pornography, enticing a minor, and traveling to engage in illicit sexual contact with a minor. Postal Inspectors discovered that Baird, a photographer under investigation by police for business-licensing violations, used the mail to send undeveloped film and images of child pornography to a film-processing company in Seattle, WA. The photos documented Baird’s sexual abuse of minor females. Inspectors have identified several of Baird’s victims as a result of the investigation.
- Postal Inspectors arrested David Waser and his wife Judy, of Newark, OH, in July 2006 on a federal warrant for illegally receiving child pornography in the mail. The Wasers were identified during the course of an Inspection Service undercover operation. A 57-year-old ordained minister and youth group leader, Waser initially denied having any sexual contact with children. However, following a polygraph exam administered by an Inspector, Waser admitted he had inappropriately touched 25 to 50 females from 10 to 12 years of age on thousands of occasions over the past 30 years. Extensive efforts are underway to identify Waser’s victims.
Obscenity in the Mail
The U.S. Postal Inspection Service has been charged with investigating the mailing of obscene matter for more than a century. Today, the Internet is perhaps the most-used venue for advertising obscene material and introducing it into American homes. From the Internet, obscenity can easily reach young children, exposing them to graphic and oftentimes violent, sexually oriented matter. While adult obscenity is advertised on the Internet, obscenity dealers frequently use the U.S. Mail to deliver products to their customers in violation of federal law.
The Postal Inspection Service continues its work with the Attorney General’s Obscenity Prosecution Task Force in Washington, DC, an effort dedicated to investigating and prosecuting obscenity cases. The task force comprises attorneys from the Department’s Child Exploitation and Obscenity Section, Asset Forfeiture and Money Laundering Section, Organized Crime and Racketeering Section, and Computer Crimes and Intellectual Property Section. It draws investigative support from the U.S. Postal Inspection Service and other federal and local law enforcement agencies. A Postal Inspector on the task force targets obscenity dealers who attempt to use the U.S. Mail to distribute their products in violation of the postal obscenity statute. Potential cases are referred to Inspection Service offices for further investigation and prosecution. Examples of obscenity cases investigated by Postal Inspectors in FY 2006 follow.
- Following an investigation by Postal Inspectors in Dallas, TX, Clarence Gartman and Brent McDowell, operators of the Web site “forbiddenvideos.com,” were convicted following a federal trial in March 2006 of using the U.S. Mail to distribute obscene matter, including videos depicting rape and torture. Gartman and McDowell were sentenced in July to 34 months and 30 months in prison, respectively.
- Robert Waldow, of Greenbelt, MD, pled guilty in September 2006 to distributing obscene material through the U.S. Mail. Waldow came to the attention of Postal Inspectors during a previous obscenity investigation in Montana. He ran a Web site that offered illegal videos depicting bestiality and rape. Waldow is facing a maximum sentence of 60 months in prison and a fine of $250,000.
- Danilo Croce, a Brazilian owner of Lex Multimedia, was arrested by Postal Inspectors in Orlando, FL, in September 2006 after disembarking from an airplane that arrived in the United States. A federal fugitive, Croce had fled to Brazil after being indicted in 2004 for operating several Web sites that sold obscene videos via the U.S. Mail. The Department of Justice’s Attorney General Obscenity Task Force assisted the Southern District of Florida in prosecuting the case.
Illegal Drugs and Trafficking
The U.S. Postal Inspection Service interdicts mailings of illegal drugs and drug proceeds and investigates organized narcotic distribution groups to protect employees and customers from the violence related to drug trafficking and to preserve the integrity of the U.S. Mail. In FY 2006, Postal Inspectors, often working with other law enforcement officials, arrested 853 suspects for drug trafficking and 85 suspects for money laundering via the U.S. Mail. Inspectors’ investigations also resulted in the seizure of approximately four tons of illegal narcotics found in the mail, as well as more than $6.8 million in cash and monetary instruments, 21 firearms, and five vehicles.
Following are examples of investigations conducted by Postal Inspectors related to illegal drugs seized from the mail during FY 2006.
- Postal Inspectors in Missouri arrested Scott Boone and Shirley Rukcic in August 2005 for conspiracy to distribute more than 50 pounds of methamphetamine and illegally launder drug proceeds. Inspectors began the investigation in September 2003 after a routine money-laundering analysis revealed significant activity by Boone and his California source of supply, Luis Palacios. They identified Shirley Rukcic, a practicing criminal defense attorney in St. Louis, as a key co-conspirator. Boone and others made “structured” purchases of more than 325 Postal Service money orders, totaling more than $300,000, and used more than 80 Express Mail parcels to ship the money orders to Palacios or co-conspirators in California. In May 2005, Inspectors from Los Angeles and St. Louis executed a search warrant at Palacios’ California home and arrested him for narcotics trafficking and money laundering. An indictment in July charged Palacios, Boone, Rukcic, and five co-conspirators with meth trafficking and money laundering. Inspectors seized $15,000 in cash and obtained a forfeiture count targeting an additional $300,000. Palacios was convicted in Missouri on August 1, 2006, on all counts and awaits sentencing of 30 years to life in prison. Six others have pled guilty and are awaiting sentencing, and one suspect is negotiating a plea deal.
- In April 2006, Postal Inspectors in Cleveland, OH, identified the mailer of a parcel sent from Las Vegas that contained nearly 2.5 kilos of cocaine. Working with Inspectors in Las Vegas, NV, they identified 40 earlier, similar mailings, which eventually led to the identification of an estimated 15 to 20 kilos of cocaine and several hundred thousand dollars worth of drug proceeds. Two suspects were indicted. Inspectors arrested one man in Cleveland on April 6, and the other in Las Vegas on May 4.
- In July 2006, Postal Inspectors, agents from the FBI, IRS and DEA, and investigators from the San Bernardino West End Narcotics Enforcement Team and Bureau of Narcotic Enforcement arrested three suspects in Southern California for conspiracy to distribute meth and commit money laundering. The investigation began two years earlier after Inspectors intercepted $10,000 in cash in the mail and identified several suspects who were major suppliers of meth to the East Coast. The investigation identified drug shipments, transactions, and suspected “meet” locations. Eight search warrants were obtained and simultaneously executed at locations in Southern California, where Investigators seized more than one pound of crystal meth, a handgun, a bulletproof vest, packing materials, and other evidence. Several suspects cooperated with the government and provided additional evidence, resulting in another 30 arrests and convictions.
May 25, 2006, marked the first day of issue of the new AMBER Alert Stamp. The stamp honors a program dedicated to the rapid recovery of abducted children. AMBER, an acronym for America’s Missing: Broadcast Emergency Response, was used in commemoration of nine-year-old Amber Hagerman, who was kidnapped in 1996. At a ceremony in the Great Hall of the U.S. Department of Justice, Postmaster General Jack Potter stated, “If this stamp can help inform even one citizen of the AMBER Alert program, it can make a difference in the safety of a child.” U.S. Postal Inspectors, in partnership with the National Center for Missing and Exploited Children, contributed to the development of the new stamp.
The Intelligence Group continued to assert itself as a valuable asset of the U.S. Postal Inspection Service during FY 2006. Group staff analyzed data sets to provide investigative leads on mail theft, identity theft, and child exploitation cases for Postal Inspectors across the country. Other group members responded to requests for information related to case activity and money order investigations, and continued to monitor security issues that could impact the U.S. Postal Service. Maintaining a tactical focus, the Intelligence Group began incorporating new strategic approaches to further develop and enhance the agency’s information systems. Intelligence Group staff worked with several Inspection Service and Postal Service groups to implement, enhance, and test information systems on case development activities for Inspectors at divisions, other National Headquarters groups, and the financial industry. New products developed by the Intelligence Group, such as the Debit Credit Money Order System and the Revenue Exception Database, continue to be upgraded based on ongoing needs. The Debit Credit Money Order System uses retail transaction data from the Postal Service to identify products purchased with fraudulent debit or credit cards. Livescan, a digital fingerprint scanning technology, captures clear, inkless prints and has quickly proven to save costs and expedite security clearances. All of these improvements were deployed to divisions over the past fiscal year.
As part of an investigative strategy targeting revenue fraud in 2006, the Intelligence Group worked on developing and administering the Revenue Exception Database System. The system comprises modules that give users access to data exception information related to mail acceptance and postage payment systems, and that may reveal illegal activity.
The Intelligence Group continues to assist Postal Inspectors on money-laundering investigations through various proactive measures. In one instance in May 2006, Inspectors requested that the group compile Suspicious Activity Reports and Currency Transaction Reports associated with a specific surety and fidelity bonding business. Research conducted with the Financial Crimes Enforcement Network (FinCEN) identified more than $2.7 million in structured U.S. Postal Service and commercial money order transactions. The Postal Service filed reports reflecting that more than $1.7 million worth of deposits had been made to an account associated with the business. Further research revealed that a New York bank had filed 328 Currency Transaction Reports, totaling more than $9.9 million, for the business.
Staff members also assisted Inspectors in the International Affairs Group and at various divisions, FBI agents, and Interpol agents in cases involving cybercrime. Research conducted by group members, for example, led to the arrest in January 2006 of four men from Lagos, Nigeria, who allegedly were responsible for selling and “passing” counterfeit Postal Service money orders. They targeted customers of eBay auctions through spamming. Losses to consumers are estimated at more than $55 million.
Consumer Education, Fraud Prevention, and Legislative Liaison
The mission of the Liaison Group is to communicate the law enforcement, security, and crime-prevention achievements of the U.S. Postal Inspection Service to the public, Congress, the U.S. Postal Service, the law enforcement community, and the media. Through consumer-protection campaigns, educational publications, video productions, and congressional liaison, Postal Inspectors and support staff from the Liaison and Fraud and Asset Forfeiture groups work to increase public awareness, especially among older Americans, about how to protect themselves from fraud and avoid becoming victims.
U.S. Postal Inspection Service staff at Chicago, Ft. Worth, Seattle, and Charlotte hosted four Consumer Fraud Forums in FY 2006. The forums promote awareness of the Postal Inspection Service’s consumer-fraud programs, allow for information-sharing on national and local fraud schemes and trends, and foster working relationships among local law enforcement and consumer-protection agencies to strengthen fraud awareness across the country.
2006 National Consumer Protection Week
Postal Inspectors joined other federal, state, and local consumer-protection agencies during National Consumer Protection Week in February 2006 to educate the public about how to avoid becoming victims of cross-border fraud schemes.
A press event to kick-off the campaign was held at the Canadian Embassy in Washington, DC, and included speakers from the Postal Inspection Service, Royal Canadian Mounted Police, Ontario Provincial Police, Canada’s Competition Bureau, and the FTC. An Inspection Service-produced consumer-awareness DVD, Nowhere to Run: Cross Border Fraud, was distributed to 34,000 Post Offices and more than 18,000 police chiefs’ and sheriffs’ offices, consumer-protection agencies, state Attorneys General offices, and state AARP chapters. Full-page black and white ads were placed in 27 national newspapers, including four Spanish-language newspapers, with an estimated readership over two days of 38 million. Campaign messages were added to a postal employee paycheck stuffer distributed to approximately 600,000 employees, and an article was published in the February edition of The Police Chief magazine containing prevention tips and the free DVD.
The Postal Inspection Service sponsored radio traffic reports in the Washington, DC, area, and a 10-second radio message was distributed to approximately 41 radio stations, which aired the message more than 200 times. Postal Inspectors took the campaign messages to local, grassroots levels by participating in more than 100 events. As part of the campaign and in support of Canada’s Fraud Prevention Month, ads were also developed and placed in seven Canadian newspapers, including a French-language newspaper.
Internet-Fraud Awareness and Prevention
The Postal Inspection Service partnered with representatives of the FBI, Internet Crime Complaint Center (IC3), National White Collar Crime Center, FTC, Merchants’ Risk Council, Monster.com, and Target to educate the public about Internet fraud and how to be aware of such scams and protect themselves and their personal information from the reach of Internet scam artists. During the campaign, a free consumer-education and fraud-prevention DVD, Web of Deceit, produced by the Inspection Service was released and distributed to 34,000 Post Offices and over 18,000 police chiefs’ and sheriffs’ offices, consumer-protection agencies, state Attorneys General offices and state AARP chapters. A joint law enforcement agency and industry Web site at www.LooksTooGoodToBeTrue.com was developed to educate consumers through fraud prevention and awareness. The Web site was announced at a press event at the National Press Club on October 31, 2005. Magazine ads and newspaper and radio spots were distributed and each magazine included a Web site banner ad and links to the site.Campaign message inserts were placed in stamp fulfillment orders, and a full-page ad was placed in the October issue of The Police Chief magazine.
Hispanic Outreach and Law Enforcement Workshops
In FY 2006, the Postal Inspection Service sponsored five joint FTC-Postal Inspection Service Hispanic Outreach and Law Enforcement Workshops. The sessions were in Cleveland, Las Vegas, Los Angeles, San Diego, and New York to help Hispanic consumers recognize, avoid, and report fraud.
Nowhere to Run: Cross-Border Fraud illustrates how the Internet, combined with international phone calls, makes it easy for fraudsters to work from anywhere in the world. This DVD presents the story of how U.S. Postal Inspectors created task forces with Canadian law enforcement partners to stop “long-distance” scams.
All the King’s Men: Picking Up the Pieces shows how fraud schemes victimize millions of Americans each year, leaving many people financially devastated. The story advises people of the laws that can protect victims and the services and support available to them.
Web of Deceit: Internet Fraud discusses telemarketing and mail fraud scams now being conducted from cyberspace. The story depicts a scammer who uses the Internet to victimize unsuspecting consumers around the world—until he gets caught in his own web of deceit. The DVD provides tips on what to be aware of to avoid fraud when doing business over the Internet.
Information for Postal Employees and Customers
Liaison Group staff offer consumer-fraud tips, fraud alerts, wanted and reward posters, and other special features on its Web site, www.usps.com/postalinspectors, including these services:
- Online reporting of suspected incidents of mail theft.
- Online reporting of suspected mail fraud.
- Information and an online application for those interested in pursuing a career as a Postal Inspector.
In FY 2006, Liaison Group members issued updates of several brochures; in particular, a new edition of Publication 146, A Postal Inspection Service Guide for Law Enforcement. Staff also wrote and published a new brochure, Publication 278, U.S. Postal Inspection Service: A Guide for the U.S. Congress, to assist congressional staff in securing information on the agency’s services. All publications are available online for viewing and printing at its Web site.
A U.S. Postal Inspection Service investigation of charities using deceptive direct-mail fundraising, which enticed donors by falsely claiming they were “pre-selected winners” of a sweepstakes, resulted in a civil settlement agreement with the charities. The agreement required the charities to furnish the Postal Inspection Service with a list of the victim donors. The Inspection Service will use the list to distribute a consumer-education and fraud-prevention message to victims with warnings about charity fraud. The message was mailed via an oversized postcard to nearly 235,000 donors identified from the lists.
Liaison Group staff met with congressional aides on Capitol Hill throughout the fiscal year on a number of issues that could potentially impact the U.S. Postal Inspection Service, including changes to Titles 18 and 39 related to the mailability of tobacco and the screening of U.S. Mail placed on commercial passenger flights. Group members also met with congressional staff concerning the transition of functions to the Office of Inspector General and workforce changes affecting Postal Inspection Service personnel.
Postal Inspectors joined the Federal Trade Commission to organize two educational seminars for Capitol Hill staff on how to work with constituents victimized by financial crime, including identity and telemarketing fraud.
Testimony Before the House Energy and Commerce Subcommittee on Oversight and Investigations
Deputy Chief Inspector William Kezer and Assistant Inspector in Charge Raymond Smith testified before the House Energy and Commerce Subcommittee on Oversight and Investigations on May 3, 2006, as the subcommittee held the second in a series of six hearings on Child Pornography through the Internet, referencing the Postal Inspection Service several times. The subcommittee oversees crimes committed over the Internet. Chairman Joe Barton (R-TX) of the full House Committee on Energy and Commerce opened the second hearing by noting “…this is probably the most important investigation of all the investigations we’ve got going on at all the other committees. Child pornography is the most pernicious thing that’s affecting our society, and we need to root it out. We need to put an end to this Internet child pornography system that’s growing like a weed in our society.”
At the conclusion of the hearing, lawmakers were visibly moved by the testimonies of law enforcement witnesses, in particular that of AIC Smith, who shared with members some portions of a letter he received from a former child victim.
Staff from the Liaison Group tracked legislation relevant to the U.S. Postal Inspection Service in FY 2006. Group members reviewed new bills, attended congressional hearings, met with congressional staff, and monitored the progress of several pertinent legislative items to stay abreast of current issues affecting the agency.
Child Protection and Safety Act
Sex crime offenders will face tougher mandatory minimum prison sentences, and it will be easier to track them under the new Adam Walsh Child Protection and Safety Act signed into law on July 27, 2006. That day marks the 25th anniversary of the abduction of six-year-old Adam Walsh, slain son of John Walsh, a victims’ rights advocate and host of “America’s Most Wanted.” The 64-page bill took more than three years to reach the President’s desk. The legislation requires states to maintain offender registries on the Internet that are accessible to the public, directs the Department of Justice to maintain a national database of offenders, and makes the failure to register with the database a felony. The act additionally includes these new provisions:
- Stiff, new mandatory minimum sentences of “not less than 30 years for certain child sex crimes.”
- Warrantless searches may be conducted at any time by law enforcement officials with reasonable suspicion of a violation of probation or unlawful conduct.
- The creation of Project Safe Childhood, which integrates federal, state, and local efforts to investigate and prosecute child exploitation cases, including the Internet Crimes Against Children task forces; and for localized training and awareness programs. The Postal Inspection Service continues to play a significant role in interagency task forces, and will be a key participant in Project Safe Childhood.
Identity Theft and Data Breach Notification
Despite widespread expectations to the contrary, none of the federal bills introduced in 2005 and related to requirements for data breach notification by private-sector firms gained passage in FY 2006.
In May 2006, President Bush directed the Postmaster General and 16 other agency heads to form the first national Identity Theft Task Force. Following announcements by several government agencies in June of major breaches of personal data, Congress held multiple hearings on identity theft, personal data security, and security breach notification, and several new bills on the public-sector management of personal data were introduced.
Competing interests among banking, consumer, and general business groups combined with legislative backlogs led few to expect passage in 2006. Postmaster General Jack Potter directed the Postal Inspection Service to represent the U.S. Postal Service on the Identity Theft Task Force. Input from Postal Inspectors working with staff from the Postal Service’s Privacy Office was incorporated into the task force proposals released in September. The following day, Office of Management and Budget (OMB) issued task force recommendations for all agencies, including the requirement that all government agencies use U.S. Mail to notify citizens of data security breaches.
Inspector in Charge Chris Giusti led a congressional briefing for Capital Hill staff on the Postal Inspection Service’s role on the Department of Justice’s Katrina Fraud Task Force. Before a group of Senate staffers representing the Homeland Security and Governmental Affairs Committee, INC Giusti highlighted FEMA fraud cases led by the Postal Inspection Service. One notable investigation initiated in Portland, OR, is described on page 8 of this report.
The Postal Inspection Service also participated in a number of congressional town-hall events across the country, including at Roanoke, VA, San Francisco, CA, and the Upper Peninsula of Michigan, where Postal Inspectors worked with district and state staff to educate constituents on ways to prevent being victimized by consumer and identity fraud.
Postal Inspectors and Postal Police Officers from the Los Angeles Division sponsored a Recruitment and Safety Fair during the Chinese Chamber of Commerce’s Chinese New Year’s Festival in February 2006. Inspectors handed out brochures to educate the Chinese community about mail fraud and identity theft, and also provided information about careers with the U.S. Postal Inspection Service. The agency pursues Inspector- candidates with diverse skills, including fluency in various foreign languages. The Postal Inspection Service Web site features more detailed information on recruitment.
Postal Inspectors from the Denver Division hosted an information-exchange meeting with public information officers and officials from more than 30 Colorado safety agencies in August 2006. Inspectors explained how they work with other local and state agencies in investigations involving emergency responses, powder incidents, mail theft, postal vehicle accidents, mail fraud, and postal vandalism. Agency officials were also given a tour of the Denver Processing and Distribution Center’s biohazard detection system. Shown above is Denver Division Inspector in Charge Kathleen Roberts, who promoted the idea that “teamwork benefits the Postal Service and our communities.”
The International Affairs Group of the U.S. Postal Inspection Service undertook a number of initiatives in FY 2006 to improve the safety, security, and reliability of international mail products for the U.S. Postal Service. The group has a two-fold mission: conducting international criminal investigations under the jurisdiction of the Postal Inspection Service and U.S. Postal Service, and conducting global postal security initiatives through the Postal Security Action Group of the Universal Postal Union (UPU).
Formed in 1990, the group comprises Postal Inspectors assigned to the U.S. Postal Service’s National Headquarters; the Interpol U.S. National Central Bureau in Washington, D.C.; at the Interpol General Secretariat in Lyon, France; at the International Bureau–Universal Postal Union (UPU) in Berne, Switzerland; and the International Airport Mail Center in Miami, FL, and in Los Angeles, CA.
International Affairs Inspectors act as liaisons with postal, police, and customs officials, as well as U.S. embassies throughout the world, to maintain high-quality mail service and security for the 190 member countries of the UPU. Chaired by the Chief Postal Inspector, the Postal Security Action Group comprises 78 member and 27 observer countries, as well as 10 international organizations concerned with postal and aviation security. The Postal Security Action Group meets biannually in Berne, Switzerland, to address such topics as aviation security, international mail theft, bioterrorism, international Nigerian organized crime, revenue security, drugs and money laundering via the mail, eCommerce security, and strategies for preventing mail losses.
Postal Security Action Group (PSAG)
Since 1997, the International Affairs Group has coordinated more than 50 mail quality assurance and airport security reviews in countries around the globe. The reviews are designed to evaluate mail security procedures at airports and international offices of exchange, and identify opportunities to improve the security of mail service worldwide. Review teams identify best practices in the industry and share their findings through the PSAG and UPU Restricted Unions. The reviews also help postal administrations improve the security of international mail and allow team members to establish a professional network of airport coordinators, operations personnel, and stakeholders at all major international airports.
International Affairs Inspectors work closely with postal security experts from PSAG working groups and member postal administrations to conduct the International Airport Quality Assurance and Airport Security Reviews. PSAG identified 12 major international airports, which serve as mail hubs, to be on a three-year airport security review cycle. The airports are located in five major regions of the world, including Asia Pacific, Latin America, Europe, North America, and Africa. In FY 2006, Inspectors coordinated and conducted reviews in Hong Kong; Manila, Philippines; Frankfurt, Germany; and the Dominican Republic.
International Affairs Inspectors were also responsible for coordinating the eMARIA program and training, an international mail-loss reporting system, for the United States and four major world regions. Inspectors use eMARIA to quantify and identify losses of outbound, inbound, and transiting international mail. It supports Postal Inspection Service efforts to boost customer confidence by identifying international mail-loss trends, high-risk airports, and high-risk air travel routes for U.S. Mail.
The Postal Security Action Group and the UPU-Bucharest Congress have deemed eMARIA to be the official database of international mail irregularities and urge all 190 UPU member countries to use it. During FY 2006, Postal Inspectors conducted training for postal security, information technology, and postal employees in the United States; certain Europe countries; Asia Pacific; and Central and South America. Inspectors analyze data from eMARIA and inform teams at International Service Centers of any concerns related to incoming and outgoing international mail.
ETOE Reviews: Securing the Postal Service ‘Brand’
Extraterritorial offices of exchange (ETOEs) are commercial postal businesses not affiliated with the U.S. Postal Service. They are owned by operators working outside their own national territories to draw business from other markets.
ETOEs mostly service large-scale business mailers in major cities around the world. ETOE operators have access to Postal Service equipment due to their function as mail consolidators. Unfortunately, ETOEs have used postal equipment for their products even when the products were not consigned to the Postal Service. This has created confusion among postal employees and airport personnel who process, expedite, and protect U.S. Mail. ETOE operators do not follow the mail security practices of the U.S. Postal Service. Following the September 11, 2001, terrorist attacks, personnel background-screening, facility security reviews, and the Aviation Security Program of the Postal Inspection Service have allowed the Postal Service to obtain security clearances needed to airlift mail. The Postal Service brand and its products are put at risk when unscreened ETOE items are placed in postal equipment. Moreover, possible harm could occur to airlines or countries receiving unscreened items.
International Affairs Inspectors conducted interdictions in FY 2006 to recover mail transportation equipment illegally used by operators to transport outbound ETOE items internationally from the United States. The U.S. Postal Equipment Security Review was intended to prevent outgoing ETOE items from leaving the country in Postal Service equipment and to recover such equipment, the illegal use of which could undermine air transportation and postal security. Since Inspectors began reviewing ETOE operations in FY 2005 through FY 2006, they have recouped several million dollars worth of equipment for the Postal Service.
In FY 2006, International Affairs staff coordinated security reviews at ETOE facilities not previously registered or identified in New York, Pennsylvania, Michigan, Maine, and New Jersey. Inspectors determined that ETOE operators in New York and New Jersey had violated U.S. Department of State policy by consigning non-Postal Service dispatches to highway contractors using postal equipment. Follow-up reviews at other ETOE facilities in FY 2006 determined that, since FY 2005, ETOEs had stopped using postal equipment. To ensure this policy is maintained, Postal Inspectors trained representatives of the Transportation and Security Administration and U.S. Customs and Border Protection on how to identify ETOE products.
As a result of the work of the International Affairs Group, the U.S. Postal Service in FY 2006 established for the first time a policy that it will not transport ETOE items. Further, the International Affairs Group assisted the U.S. Department of State in developing a policy, to be enforced by the Transportation Security Administration, that establishes civil penalties for ETOEs that improperly use UPU international postal documentation.
Postal Inspectors Help Keep Military Mail Safe
Inspectors from the International Affairs Group helped prepare a contract solicitation to transport mail from the United States to members of the military in the combat zones of Iraq, Kuwait, and Afghanistan. Postal Inspectors traveled to Bahrain to work with the U.S. Military Postal Service Agency. They reviewed the safety and security of mail being handled at Bahrain, which is an international mail hub, and the transit of the mail to 10 military outposts. Inspectors also assisted in reviewing security proposals related to the Postal Service’s solicitation for flights from the United States to Bahrain.
Protecting Postal Money Orders from International Attack
Postal Inspectors in the International Affairs Group monitored the Carder Portal Web site that was being used by Nigerian suspect Peter Nosa to sell counterfeit Postal Service money orders to site members. On January 26, 2006, Postal Inspectors from International Affairs and the New York Division worked with cybercrime investigators of the Nigerian Economic and Financial Crime Commission to arrest Nosa and two others in Lagos, Nigeria.
Inspectors determined that Nosa belonged to several credit card and Internet fraud criminal forums, which he operated from a family-owned cyber café in Lagos. He worked with conspirators in Europe and the Middle East to distribute counterfeit financial instruments, conduct credit card fraud, and launder illegal proceeds. After the Trust and Safety offices of eBay informed Inspectors that Nosa was responsible for more than $50 million in fraudulent auctions, Inspectors traveled to Lagos and presented evidence of Nosa’s criminal activities to the Nigerian Economic and Financial Crime Commission. As a result, Nosa was arrested under Nigerian law for distributing counterfeit financial instruments, forgery, conspiracy, and resisting arrest.
International Affairs staff developed and implemented training for Nigerian law enforcement officers and postal officials during several trips to Lagos. The training informed key leaders in Nigeria, including its postmaster general and the head of the Nigerian Financial and Economic Crime Commission, of counterfeiting problems in their country that impact the United States.
Throughout the past fiscal year, the International Affairs Group received requests for assistance from the U.S. Postal Service to address “spoof” postal money order certifications. Inspectors determined that Nigerian criminals were sending e-mails to victims in the United States, asking them to cash what were purportedly Postal Service money orders, but were, in fact, worthless counterfeits. Victims then received a “spoof” e-mail, supposedly from the Postal Service, certifying that the counterfeits, identified by serial number, were legitimate postal money orders. Victims were instructed to cash them and electronically transfer the funds to the Nigerian contact. International Affairs Group Inspectors worked with Internet service providers to shut down more than 1,200 e-mail accounts being used to distribute spam related to U.S. Postal Service money orders.
Working with International Partners to Secure Mexico’s First Vote Abroad
International Affairs Inspectors worked closely with officials of Mexican SepoMex to coordinate the security of inbound registered mail dispatches from Mexico to U.S. gateway cities. Postal Inspectors at each city were on hand to meet registered mail dispatches from Mexico at plane side and escort the sacks to the mail-processing plant. U.S. Postal Inspectors also traveled with their Mexican counterparts to Mexico City to jointly review security operations and meter processing for outbound ballots. The Mexican Federal Electoral Institute obtained a special permit from the U.S. Postal Service, allowing a meter imprinter outside the United States for this project.
The U.S. Postal Inspection Service coordinated a visit from SepoMex and the Mexican Federal Electoral Institute to the Postal Service’s International Service Center in Los Angeles to review procedures on returning absentee ballots. The review focused on operations and security provided for absentee ballots during Mexico’s first-ever vote abroad campaign. Mexican SepoMex officials advised that approximately 81 percent of the absentee ballots that were completed and mailed to the United States from Mexico were properly returned without incident or irregularities.
Protecting Postal Service Business Mailers and U.S. Citizens
The International Affairs Group made major strides over the past fiscal year in halting cybercrime affecting U.S. Postal Service products. Postal Inspectors have been in the forefront in fighting such criminal tactics and protecting the Postal Service from attack.
In FY 2006, the International Affairs Group identified more than 20,000 fraudulent mailings made through the Postal Service’s online shipping service, Click-N-Ship.® The scheme resulted in losses to the Postal Service of more than $1 million in International Global Express Mail postage in the first eight months of 2006. A number of major online merchants and credit card companies, as well as large-scale mailers, were also targeted by this scheme. Other cyber attacks against the Postal Service included spam e-mails and phishing, which target U.S. citizens.
In February 2006, the International Affairs Group joined other law enforcement officials and multi-national corporations in Operation GoldPhish, an event organized by Interpol. Under this initiative, the International Affairs Group partnered with the FBI to disseminate information to law enforcement agencies in 20 countries on more than 400 cybercrime subjects. Law enforcement officials from Russia, Ukraine, Lithuania, and Latvia participated in the event.
Partnership with the FBI’s National Cyber Forensic and Training Alliance
A joint project of the International Affairs and the Intelligence groups involved working with the FBI at the National Cyber Forensic and Training Alliance. As technology continues to evolve, businesses the world over have become increasingly dependent on the Internet. Criminals have followed the same path, expanding their illicit activities to the virtual world.
The increase in computer technology has resulted in new forms of attacks on personal, corporate, and governmental security. Fighting such attacks requires a collaborative approach to identify threats and devise solutions that effectively detect and combat them. As the Postal Service expands its eCommerce business, it faces greater criminal threats in this arena.
In early 2006, an FBI terrorism legal attaché in the United Kingdom requested assistance from the Postal Inspection Service’s International Affairs and Intelligence groups in his investigation of funding related to the July 7, 2005, London terrorist bombings. The New Scotland Yard-based investigation disclosed financing tied to the identity takeover of U.S. citizens by Internet-based criminal networks. Postal Inspectors determined that the suspects involved in the bombings had purchased more than $20,000 in postage with stolen credit cards to move millions of dollars worth of high-tech merchandise and survival equipment.
On April 7, 2006, a letter to the Postal Inspection Service from FBI Director Robert S. Mueller III, stated his recognition of the “United States Postal Inspection Service for having the foresight and initiative to partner with the FBI to combat the growing cybercrime problem.” Director Mueller cited Inspectors’ work as greatly contributing to the arrest of more than 40 people in 15 countries and affirmed that the shared intelligence initiative between the FBI and Postal Inspection Service has been “immeasurable … in identifying more than 800 persons in 40 countries engaged in cybercriminal activity.” According to Mueller, these efforts have “bridged intelligence gaps between the FBI and other law enforcement agencies, as well as private industry.”
As a result, the Department of Justice asked the Postal Inspection Service to participate in a number of significant cybercrime support activities. In particular, Inspectors were invited to participate in the International Practical Conference on the Fight Against Cyber Crime and Cyber Terrorism. Inspectors from the International Affairs Group represented the Inspection Service at this “G8” meeting in April 2006 in Moscow, Russia.
The lessons learned and partnerships developed by the International Affairs Group also led to the Universal Postal Union’s first Identity Management and Communications Security Forum hosted by Stanford University in September 2006. Experts from Microsoft, Visa, eBay, American Express, CipherTrust, and other major businesses discussed using the resources of the world’s postal systems to improve eCommerce security. Recommendations from this forum will affect the objectives of the UPU’s Postal Security Action Group and the Electronic Service Groups.
The International Affairs Group assumed the Assistant Directorship of the Economic Crimes Division at Interpol’s U.S. National Central Bureau in Washington, DC, in December 2004. Since that time, group Inspectors have reviewed more than 3,900 cases to identify mail-related fraud, money laundering, child exploitation, and other crimes with a mail nexus for referral to Inspectors at field locations. The Assistant Directorship is responsible for managing agents from the U.S. Secret Service, U.S. Immigration and Customs Enforcement, Internal Revenue Service, the Environmental Protection Agency, and U.S. Postal Inspection Service, as well as six Department of Justice analysts and an intern.
Since Postal Inspectors began reviewing ETOE operations in FY 2005 and through FY 2006, they have recouped several million dollars worth of equipment for the Postal Service. Illegal use of Postal Service equipment also could undermine air transportation and postal security measures.
U.S. Postal Inspectors assist law enforcement officers and postal officials in West African countries to identify and seize international mail, destined for the United States, containing counterfeit financial instruments. More than 70 percent of the dollar value of the seized items were counterfeit traveler’s or bank checks, and were mailed from Nigeria, Ghana, Togo, and Benin.
Postal Inspectors from the International Affairs group coordinated a visit from SepoMex and the Mexican Federal Electoral Institute to the Postal Service’s International Service Center in Los Angeles to review procedures on returning absentee ballots. Mexican SepoMex officials advised Inspectors that approximately 81 percent of the absentee ballots that were completed and mailed to the United States from Mexico were properly returned without incident or irregularities. Shown (l to r) are: SepoMex Manager of Marketing Claudia Mortera Cabrera, Postal Service International Affairs Specialist Guadalupe Contreras, SepoMex Manager of International Affairs Jorge Aldana, International Affairs Postal Inspector Rafael Nunez, Pitney Bowes Major Accounts Representative Miguel Huitron, a LePoste Representative, and the SepoMex Manager of the Airport Office of Exchange Gregorio Santos.
Forensic Laboratory Services
FY 2006 saw the start of the transformation of Forensic Laboratory Services with the authorized closing of three field laboratories in Memphis, Chicago, and New York, and the assignment of Forensic Computer Analyst positions at each of the 18 divisions of the Postal Inspection Service.
Beginning in July 2006, all requests for laboratory services related to questioned documents, fingerprints, physical evidence, chemistry, and photography were sent to the National Forensic Laboratory at Dulles, VA. Despite the transition, Forensic Analysts and Examiners at the four laboratories continued to support investigations requiring scientific and technical expertise. They completed more than 2,700 examinations, which resulted in the identification of 902 suspects, 249 of whom were identified through the automated fingerprint identification systems (AFIS). Inspector-Program Managers and Forensic Computer Analysts at seven Digital Evidence units completed another 722 submissions. Laboratory personnel provided expert testimony on 23 occasions related to examinations and analyses of evidence obtained from Postal Inspection Service criminal investigations.
The growing sophistication of criminals has been widely observed in forensic evidence, which not only has increased in quantity but also in complexity. In one case, the revelation of how a particular fraud scheme was able to go undetected for years required state-of-the-art instrumentation that had been acquired by the laboratory only within the past two years. Examiners used the relatively new Ribbon Analysis Workstation (RAW III) to view the contents of a typewriter ribbon, which contained entries on company checks used in the scheme. A Video Spectral Comparator 5000 aided analysts in identifying areas of the corresponding checks that had been altered, and a comparison microscope matched entries on the checks with those on the ribbon. An examination of handwriting identified the suspects in the investigation as having endorsed and written the checks.
After Postal Inspectors seized approximately $400,000 in cash in a money laundering case, Forensic Examiners used Physical Developer chemical processing, a costly and somewhat cumbersome process, to locate possible latent prints. Five weeks of processing resulted in 62 latent prints on the currency. The suspects, who had previously denied any knowledge of the money, all retained attorneys when confronted with the fingerprint evidence.
Cases involving digital evidence show the extent that computers and other electronic devices are used in mail fraud, mail theft, and child pornography. It was not unusual this past year for members of the Postal Inspection Service’s Digital Evidence Unit to assist in searches that required obtaining evidence from computer servers, desktop and laptop computers, external hard drives, USB devices, CDs, and DVDs, all of which totaled terabytes of data.
Also in FY 2006, Forensic Laboratory Services staff provided in-service training for five Basic Inspector Training classes. Analysts delivered two days of lecture and assistance at mock crime scenes for each class. Laboratory staff also provided in-service training at a week-long Crime Scene Processing School to enhance Inspectors’ skills in the areas of evidence collection and preservation.
A Forensic Latent Print Analyst at the National Forensic Laboratory in Dulles, VA, uses a dye called gentian violet to process packaging seized in a controlled substance investigation. Forensic staff use an array of techniques to develop latent fingerprints on porous and non-porous evidence.
Critical Incident Responses
In the wake of Hurricane Katrina’s devastation in September 2005, responses by the Postal Inspection Service to areas of Louisiana, Mississippi, and Alabama were hampered by logistics in securing command and housing facilities for Postal Inspectors. Staff from Technical Services stepped in with a supply of lightweight, rugged, rapid-deployable, and modular tactical-shelter units capable of operating in any climate. The units provided not just shelter, but also power, lighting, and cooling, allowing Inspectors to restore communications and secure Postal Service assets, employees, and the U.S. Mail.
In conjunction with this project, the Postal Inspection Service procured GPS devices for all Postal Inspectors. Because most street signs were destroyed by the hurricanes, the GPS devices aided Inspectors in quickly locating postal facilities that needed to be evaluated for security and contamination. Inspectors may also use the devices during responses to critical incidents, such as robberies or physical assaults, and for other investigative activities.
Mail-Screening Training for Department of State
At the request of the U.S. Department of State, the Postal Inspection Service worked with staff at the agency’s Bureau of Overseas Buildings Operations in Vilnius, Lithuania, to inspect their first Modular Mail Screening Facility (MMSF). An Inspector examined the MMSF, performed a mail security review, and trained mailroom personnel on proper security procedures, mail-screening techniques, improvised explosive device theory and recognition, and X-ray image interpretation.
The Postal Inspection Service also partnered with the Department of Defense’s Technical Support Working Group in FY 2006 to expand the Inspection Service’s own mail-screening processes. The collaboration resulted in a design for a new mobile unit of a mail-screening platform that will screen for explosives, as well as for biological, nuclear, and radiological threats.
National Law Enforcement Control Centers
The Postal Inspection Service’s National Law Enforcement Control Centers (NLECCs) are located in Dulles, VA, and Ft. Worth, TX. The two facilities monitor the agency’s national law enforcement radio network and intrusion-detection systems at Postal Service facilities. They provide after-hours emergency phone coverage for all Postal Inspection Service offices and give Postal Inspectors access to law enforcement and intelligence information. Additional measures to enhance security for postal employees and facilities are in the planning stages.
Both NLECC facilities have identical functionality and can support the full load of the entire country should one center’s operations fail. In case of an electrical outage, the centers are protected by uninterruptible power supplies that provide at least one hour of backup power, plus a diesel generator that can accommodate an extended outage. The facilities meet the Underwriters Laboratory safety specifications for central station monitoring.
NLECC is proving to be especially useful in apprehending burglars. During FY 2006, four suspects were apprehended at the scene of the crime as a result of NLECC's state-of-the-art burglar alarm monitoring and dispatch technology.
Postal Inspector-Polygraph Examiners played vital roles in solving armed robberies, registered remittance thefts, embezzlements, identity thefts, burglaries, counterfeit money order cases, insurance fraud, burglaries, workers’ compensation fraud, military mail theft, and child exploitation through the mail. In one instance, a pastor in Ohio admitted after a polygraph exam that, over the past 37 years, he had engaged in 1,200 to 3,000 separate instances of sexual contact with girls 10 to 12 years of age. Prosecution is pending.
Polygraph examinations also helped resolve a series of armed robberies that took place between 1999 and 2002 involving postal truck drivers in Atlanta, GA. Losses from three of the robberies exceeded $86,000. After taking a polygraph exam, one letter carrier (who Inspectors had developed as a suspect) provided details on the robberies, the disposition of registered mail, and the location of the firearm he used in the robberies.
Two National Law Enforcement Control Centers are monitored by Postal Inspection Service staff at Ft. Worth, TX, and Dulles, VA, who use a radio network and intrusion-detection systems to safeguard postal facilities.
Office of Counsel
The Chief Postal Inspector of the U.S. Postal Inspection Service is responsible for handling Privacy Act and FOIA requests for Inspection Service records. The Chief Postal Inspector has designated the Office of Counsel, Freedom of Information-Privacy Act (FOIA-PA) Unit with the authority to process and respond to all such requests for records.
The Freedom of Information Act is a federal statute created by Congress in 1966 to give the public greater access to federal agency records. It provides that any person has the right to request access to these records, unless the records are protected from disclosure by any of nine exemptions contained in the law. The Privacy Act of 1974 gives individuals access to records about themselves. A Privacy Act request must have an original written statement declaring, under penalty of perjury, that requestors are who they say they are, or be accompanied by a notarized statement of their identity.
The FOIA Unit processes and reviews voluminous records each year for release to requesters. In FY 2006, the unit processed and closed 475 FOIA requests. In addition to daily processing tasks, FOIA staff receive high-profile requests that require coordination with the Postal Service’s Records Office, office of Media Relations, and Law Department.
A key measure of success for FOIA-PA staff is ensuring that privacy protections are not compromised when releasing information. Executive Order 13,392, issued by President Bush in December 2005, presents new challenges. Its purpose is to ensure that appropriate agency disclosure of information is consistent with the goals set forth in Title 5, section 552 of the United States Code. The order comprised 27 potential improvement areas for FOIA personnel at federal agencies to review and make necessary changes, as well as designating each agency to establish a Chief FOIA Officer, a FOIA Public Liaison, and a FOIA Service Center with a requester line.
For questions about FOIA related to crimes involving the mail or to check on the status of a request, call the FOIA Service Center at 703-292-3944, or write to:
Chief Postal Inspector
U.S. Postal Inspection Service
475 L’Enfant Plaza SW, Rm. 3100
Washington, DC 20260-2100
The U.S. Postal Inspection Service’s Investigative Support Group provides a wide range of functions, including a human resource service center, employee development, executive resources and leadership development, workforce strategic planning, organizational research and assessment, and Postal Inspector recruitment activities. Its staff develops information used in planning, implementing, and evaluating strategic human resource programs. The group’s vision statement is “to build a workforce equal to none through determination, passion, persistence, and commitment to excellence.” Significant activities from FY 2006 follow.
In support of the Postal Service’s Strategic Transformation Plan and succession process, Investigative Support Group staff continued to administer the Postal Inspection Service’s Corporate Succession Planning process. Four candidates enrolled in the Advance Leadership Program, and group staff employed the 360º Assessment Instrument to train 12 Assistant Inspectors in Charge, as well as Career Leadership Program participants.
Investigative Support Group staff were pre-certified for the Postal Inspection Service’s Senior Executive Services, which is the equivalent of the Postal Service’s Pay-for-Performance process. This allowed the Inspection Service to implement significant features of a federal compensation system, which awards the highest pay to the highest performing executives. In addition, the Inspection Service Performance Evaluation System (ISPES), an electronic version of the Pay-for-Performance program, was implemented. ISPES uses a five-phase approach to improve executive performance through planning, developing, monitoring, evaluating, and rewarding performance.
The Investigative Support Group developed competency models in FY 2006 for three key employee groups of the Postal Inspection Service: Inspection Service Operations Technicians, Administrative Support Specialists, and Forensic Analysts. The models set career paths for professional, technical, and administrative support employees of the Inspection Service and support the Investigative Support Group’s five-year strategic plan. The models also will be used in developing and validating selection measures.
As part of the Postal Service’s Transformation Plan initiatives, Inspection Service groups critically evaluated operations and processes for field and headquarters units. The goal was to streamline and improve processes, as well as reduce redundancies and costs. The result was a new organizational structure based on a law enforcement mission that reduces employee complement and expenses, while remaining responsive to changing conditions in the business environment. Investigative Support Group staff oversaw this intensive project.
The Office of Recruitment organized an effort by recruiters at division offices to sponsor information exchanges nationwide for more than 2,500 candidates interested in competing to become Postal Inspectors. The sessions were designed to give recruiters a firsthand look at candidates early in the process and, at the same time, provide candidates with a realistic preview of a career as a U.S. Postal Inspector. Approximately 144 candidates were hired from six Basic Inspector Training classes held in FY 2006.
Also in FY 2006, the Office of Recruitment produced a video, “Women in Federal Law Enforcement: A Personal Perspective,” for the 2006 Women in Federal Law Enforcement (WIFLE) Conference. WIFLE honored the Chief Postal Inspector by presenting him with an Executive Director’s Award in recognition of his outstanding contributions to women in federal law enforcement.
Career Development Division
The Career Development Division (CDD) of the U.S. Postal Inspection Service provides basic training for candidate Postal Inspectors, in-service refresher and specialized courses for all Inspection Service personnel, and certification for threat-management instructors. Located at the William F. Bolger Center for Leadership Development in Potomac, MD, the CDD campus offers the advanced features of an elite law enforcement training program with a dormitory, full dining amenities, classrooms, a fitness center, and firearms facilities.
Inspector candidates undergo 12 weeks of scenario-based training that covers investigative techniques, defensive tactics, firearms, legal matters, search and seizure tactics, arrest techniques, court procedures, postal operations, and a detailed study of the federal laws over which the Postal Inspection Service has jurisdiction. Training focuses on problem-solving abilities, critical thinking, and cognitive skills. All candidate Inspectors must successfully complete academic, firearms, and practical exercises to graduate from the program. Upon successful completion, new Postal Inspectors participate in six months of formal, post-basic training designed and monitored by CDD and provided at an assigned Postal Inspection Service site. From November 2005 through September 2006, CDD successfully graduated five Postal Inspector classes.
CDD provided training for 1,965 Postal Inspection Service employees in FY 2006, which represented 107 offerings of 36 courses. Hazwoper training in biohazard-detection systems was also provided by the agency.
In FY 2006, CDD also conducted its first training for General Analysts, a position established during the past fiscal year. A total of 131 newly hired General Analysts participated in the eight-day program at Bolger Center. The multi-phase curriculum for the new Postal Inspection Service position addresses three critical areas: investigative analysis, asset forfeiture, and victim-witness coordination. Prior to attending the training, all General Analysts completed a series of online modules related to spreadsheet and database software, such as that needed for the Inspection Service’s Financial Crimes Database. An introductory online training program, developed specifically for the General Analyst by a team of subject-experts, was posted on an Intranet Web site in August 2006.
U.S. Postal Inspection Service Criminal Statistics for FY 2006
Type of Investigation Arrests Convictions*
Mail Theft 5,060 4,625
(includes theft and possession of stolen mail)
Miscellaneous External Crimes 251 217
(includes counterfeit and contraband postage, vandalism, and arson)
Miscellaneous Employee Crimes 1 3
(includes theft of postal property and sabotage of equipment)
Hazardous Material 11 17
(includes biological, chemical, nuclear, and radiological material)
Bombs, Threats, Hoaxes, and Explosive Devices 54 61
Dangerous Mail 88 75
(includes firearms and weapons, intoxicants, extortion, and false documents)
Assaults and Threats 395 256
(includes threats and assaults against on-duty postal employees)
Robbery 67 47
Burglary 129 115
Mailing of Controlled Substances 851 1,059
(includes narcotics, steroids, drug-related proceeds, and drug paraphernalia)
Employee Narcotics Cases 0 1
(includes employees and non-employees selling narcotics on postal property)
Mail Fraud 1,299 1,198
Child Exploitation, Mailing of Obscene Matter, and Sexually Oriented Advertisements 250 281
Financial and Expenditure Investigations 206 198
Workers’ Compensation Fraud 18 22
Revenue Investigations 80 50
TOTAL 8,760 8,225
*Convictions may be related to cases from prior reporting periods.
U.S. Postal Inspection Service Jurisdiction and Laws
Postal Inspectors enforce more than 200 federal laws in investigations of crimes that may adversely affect or fraudulently use the U.S. Mail, the postal system or postal employees. The list below describes some of our most important areas of jurisdiction.
Assaults (18 USC 111 & 1114)
The protection of Postal Service employees is one of our most important responsibilities. Inspectors promptly investigate assaults and threats that occur while postal employees are performing official duties or as a result of their employment.
Bombs (18 USC 1716)
Although a rare crime, the mailing of bombs is given one of our highest investigative priorities due to the severe impact it can have on postal customers, employees and operations.
Burglary (18 USC 2115)
The Postal Service experiences about 300 burglaries each year. Inspectors have minimized losses through the use of security equipment and facility design.
Child Exploitation (18 USC 1470, 2251, 2252, 2253, 2254, 2422, 2425)
The Postal Inspection Service has long been recognized as the leading federal law enforcement agency in the effort to combat the production and distribution of child pornography and other crimes exploiting children through the mail and, when it involves the mail, over the Internet.
Controlled Substances (21 USC 841, 843 & 844)
Postal Inspectors initiate investigations related to transporting and distributing narcotics through the mail or at postal facilities.
Counterfeit Stamps, Money Orders & Related Crimes (18 USC 500, 501, 503 & 1720)
Postal Inspectors preserve public confidence in the mail by pursuing individuals who forge, alter or counterfeit postage stamps, postal money orders and other stamp products. The Inspection Service helps train postal employees to recognize bogus postal money orders.
Destruction, Obstruction & Delay of Mail (18 USC 1700, 1701, 1702 & 1703)
The Postal Inspection Service upholds federal statutes aimed at securing customers' mail, including those related to the desertion, obstruction, delay or destruction of mail. Postal Inspectors demonstrate their resolve by implementing mail security processes to ensure that customers receive their mail intact and free from outside interference.
Electronic Crimes (18 USC 1029, 1030, 1037, 1343, 2701)
Inspectors protect postal customers from fraud schemes and other crimes that may occur online and involve the misuse of the mail or of the Postal Service. This includes using or selling stolen or counterfeit access devices, such as credit card numbers; using protected computers without proper authority or exceeding authorized access; using computer communications in a scheme to defraud; using a false identity when sending commercial e-mails to mislead or deceive recipients, as with spam; and unauthorized access to communications that are stored electronically via a communications service.
Extortion (18 USC 873, 876 & 877)
Postal Inspectors investigate extortion and blackmail when demands for ransoms or rewards are sent through the U.S. Mail. Inspectors also strictly enforce laws prohibiting mail that contains threats of kidnapping, physical injury, or injury to the property or reputations of others.
Forfeiture (18 USC 981 & 982)
Postal Inspectors use criminal and civil forfeiture statutes, when appropriate, to seize assets associated with criminal acts.
Identity Fraud (18 USC 1028)
The Postal Inspection Service is a leading federal law enforcement agency in the investigation of identity takeovers.
Lotteries (18 USC 1301, 1302 & 1303; 39 USC 3005)
Postal Inspectors protect consumers by strictly enforcing all laws related to importing, transporting and mailing lottery tickets. Under the false representations and lottery statute (3005), Inspectors are authorized to instruct postmasters to withhold from delivery and return to sender any mail that violates the law.
Mail Fraud (18 USC 1341, 1342 & 1345; 39 USC 3005 & 3007)
The Postal Inspection Service is committed to protecting postal customers from misuse of the mail. Inspectors place special emphasis on mail fraud scams related to advance fees, boiler rooms, health care, insurance, investments, deceptive mailings and other consumer frauds, especially when they target the elderly or other susceptible groups.
Mail or Mailbox Destruction (18 USC 1705)
The Postal Inspection Service is committed to ensuring the safety of the nation's mail by securing letter boxes or other receptacles for U.S. Mail. To this end, Postal Inspectors aggressively pursue individuals who willfully or maliciously injure or destroy such receptacles.
Money Laundering (18 USC 1956 & 1957)
Postal Inspectors aggressively investigate criminals who attempt to conceal the proceeds of illegal acts through monetary transactions. Inspectors identify and seize criminals' assets, denying violators the proceeds of their crimes.
Obscenity & Sexually Oriented Advertising (18 USC 1461, 1463 & 1735; 39 USC 3010)
Postal Inspectors follow court-established guidelines to uphold obscenity standards, which prohibit "obscene, lascivious, indecent, filthy or vile" mailings. Customers who wish to halt mailings of sexually oriented advertisements or similar solicitations may complete and submit a Postal Service Form 1500, available at Post Offices.
Robbery (18 USC 2114)
Postal Inspectors respond promptly to robberies of postal employees and postal contractors. Inspectors focus on preventing robberies through the use of security equipment and improved postal procedures.
Theft of Mail (18 USC 1708 & 1709)
Postal Inspectors invest significant resources into the investigation of mail theft by criminals.
For assistance with postal-related problems of a law enforcement nature, contact your nearest U.S. Postal Inspection Service division.
PO Box 16489
Atlanta GA 30321-0489
495 Summer St Ste 600
Boston MA 02210-2114
PO Box 3000
Charlotte NC 28228-3000
433 W Harrison St Rm 50190
Chicago IL 60669-2201
1745 Stout St Ste 900
Denver CO 80299-3034
PO Box 330119
Detroit MI 48232-6119
Ft Worth Division
14800 Trinity Blvd Ste 600
Ft Worth TX 76155-2675
650 N Sam Houston Pky West
Houston TX 77067-4336
Los Angeles Division
PO Box 2000
Pasadena CA 91102-2000
3400 Lakeside Dr 6th Fl
Miramar FL 33027-3242
PO Box 509
Newark NJ 07101-0509
New York Division
PO Box 555
New York NY 10116-0555
PO Box 7500
Philadelphia PA 19101-9000
1001 California Ave
Pittsburgh PA 15290-9000
St. Louis Division
1106 Walnut St
St Louis MO 63199-2201
San Francisco Division
PO Box 882528
San Francisco CA 94188-2528
PO Box 400
Seattle WA 98111-4000
10500 Little Patuxent Pkwy 2nd Fl
Columbia MD 21044-3509
Published by the U.S. Postal Inspection Service
475 L’Enfant Plaza SW
Washington, DC 20260-2170
Lee R. Heath
Chief Postal Inspector
Paul J. Trimbur,
Inspector in Charge
Debbi Baer, Editor
Martin Communications, Inc.
For more information on the U.S. Postal Inspection Service, visit our Web site at: www.usps.com/postalinspectors