A Maxton, NC, repair contractor has agreed to pay $1 million in a civil settlement for allegedly inflating the cost of repairs at several Postal Service facilities.
Special agents from the Postal Service’s Office of Inspector General, or OIG, were using a proprietary data analytics tool to check contracts for possible fraud when it flagged the company and its owner.
Investigators found fake invoices with inflated work hours; travel miles billed as labor; forged or altered USPS employee signatures; inflated equipment costs; and a lack of disclosed subcontractors.
The special agents subpoenaed the company owner. During their questioning, his story unraveled, and the evidence of alleged fraud mounted. The Postal Service terminated its contracts with the company the next day.
The U.S. Attorney’s Office for the Eastern District of North Carolina charged the owner under the False Claims Act, which allows the federal government to recover up to three times the alleged amount of money falsely obtained — plus penalties for each false claim.
The owner denied the allegations but settled the case out of court by agreeing to pay $1 million to resolve the fraud claims.
The OIG investigation prevented an additional $3.6 million in future fraudulent payments to the company.
“The Postal Service OIG will continue to aggressively investigate companies that engage in activities designed to defraud the Postal Service’s contracting process,” said Kevin Cloninger, executive special agent in charge. “This settlement demonstrates that our special agents, along with the United States Attorney’s Office, will pursue contractors that overcharge the government and enrich themselves at the expense of USPS customers.”
The OIG recently highlighted the case on its website.
If you suspect or know of contract fraud against the Postal Service, report it to the OIG hotline. Your tip could be eligible for the OIG’s Reward for Information Program.
