When Pandemic Aid Turned into Postal Crime

She hurt her knee fleeing from a charging dog on her mail route. Unfortunately, for many mail carriers, this story is all too familiar and often ends with staying on the Postal Service’s rolls through workers’ compensation.

But this mail carrier in Miami, FL, wasn’t just injured after the dog incident. By the time our special agents flagged her in the system, she was the one doing damage.

You see, federal workers who receive workers’ compensation must report all income they’re bringing in from other jobs.

So, when our investigators saw she had applied for pandemic relief funds for a small business, they cracked open a case that would lead to deeper levels of egregious, collusive fraud.

The Small Business Administration (SBA) granted the mail carrier a Paycheck Protection Program (PPP) loan of over $20,000 intended to cover a business’ payroll when no money was coming in during the COVID-19 pandemic.

Meanwhile, the carrier was lying on her workers’ comp claims by omitting the fact she had recovered from her injury and was also selling meals and household essentials out of her home — a business she openly advertised on social media.

During an interview with our special agents, the mail carrier said a coworker had helped her fill out the loan application in exchange for $5,000, which, incidentally, is illegal.

Investigators soon found she wasn’t the only USPS employee who’d been helped with preparation services.

It turns out that “helpful coworker” — an employee turned mastermind — had also filled out a PPP loan application for a carrier technician totaling over $28,000.

The mastermind also helped the technician with her taxes, ballooning her returns from $3,000 to $28,000 one year and $30,000 the next in exchange for several thousand dollars (incidentally, also illegal).

She was crafty; she knew exactly what to write so tax forms and loan applications passed as legit and stayed under the radar.

Others also benefited from the fraud: a postal machine operator got a PPP loan of over $43,000; four people outside the Postal Service received a combined $165,000 in PPP loans; and a postal employee who left USPS to — get this — work for the SBA, received almost $1.3 million in PPP loans.

Not only did she steal from her employer and the very agency facilitating the loans, she also asked the SBA to forgive the loans.

Everyone in cahoots knew each other because they either worked together, were friends or dated each other.

The mastermind created fake businesses with fake employees and prepared all the forms on their behalf — even declarations about purported tax forms.

Private banks then processed the loan applications and, once approved, the SBA disbursed the funds to each alleged business owner.

Who forked the bill?

None other than Uncle Sam.

Because of this joint investigation with the Department of Labor OIG and the SBA OIG, the Postal Service terminated the collusive employees, and all eight co-conspirators were criminally charged. The combined sentences totaled over 15 years in federal prison, with the mastermind getting the longest sentence of five years. The fraudsters were also ordered to pay a combined restitution of over $2 million.

Fraud hurts every taxpayer. If you suspect someone of pandemic relief fraud, please report it to the Pandemic Response Accountability Committee’s Hotline. And if you suspect or know of workers’ compensation fraud involving Postal Service employees or contractors, please report it to our Hotline.

"When Postal Service employees conspire to defraud federal programs, they’re stealing from the American public. Our special agents will always hold those who betray that trust accountable."

– Tammy L. Hull,
Inspector General, U.S. Postal Service

For further reading:

Department of Justice (via uspsoig.gov), Ringleader of Payment Protection Program Fraud Scheme Sentenced to Five Years in Prison, Former SBA Employee from South Florida Headed to Federal Prison After Defrauding COVID-19 Relief Programs, Four South Florida Residents Charged with PPP and Mortgage Fraud