Four former Postal Service employees in Miami have been sentenced to prison for defrauding the federal government out of $2 million in COVID-19 pandemic relief payments.
This case began as a workers’ compensation investigation. A letter carrier who injured her knee while running from a dog on her route was receiving workers’ compensation payments, but she failed to notify the Postal Service when her knee healed.
She also didn’t report the income she was receiving from her side business of selling meals and clothing out of her home.
Special agents with the Postal Service’s Office of Inspector General, or OIG, discovered that the carrier applied for and received a $20,000 Paycheck Protection Program, or PPP, loan from the Small Business Administration. Such loans were intended to cover payroll expenses when business owners weren’t making sufficient money during the pandemic.
The letter carrier told agents that a co-worker had helped her fill out the loan application. This triggered a joint investigation with the Labor Department and Small Business Administration OIGs.
Postal Service OIG special agents learned that this same co-worker helped a second employee get a $43,000 PPP loan; a third employee get a $28,000 PPP loan and cheat on her income tax returns; and a fourth employee get $1.3 million in PPP loans.
She charged each co-worker substantial fees for her services and helped another four people outside the Postal Service receive a combined $165,000 in fraudulent PPP loans.
Special agents said this employee knew exactly what to write on the loan applications and tax forms to make everything look legitimate. She created fake businesses and email accounts for her co-workers so they could apply for the loans, and she prepared all the necessary paperwork — including tax declarations. Banks then processed the loan applications and the Small Business Administration disbursed the funds directly to the alleged business owners.
The Postal Service fired all of the employees who were involved. Four of them were charged, tried and sentenced — along with four non-USPS co-conspirators — to a combined 15 years in federal prison. The employee who masterminded the scam received the longest sentence — five years.
They were also ordered to pay $2 million in restitution.
“When Postal Service employees conspire to defraud federal programs, they’re stealing from the American public,” said USPS Inspector General Tammy Hull. “Our special agents will always hold those who betray that trust accountable.”
The OIG recently highlighted the case on its website.
If you know of a USPS employee committing workers’ compensation fraud, report it to the OIG. Report suspected pandemic relief fraud to the Pandemic Response Accountability Committee’s Hotline.
