California Woman Pleads Guilty to $150 Million Postal Fraud Scheme

A Southern California woman pleaded guilty to a postal fraud scheme in which she and her accomplice allegedly shipped over 30 million packages with counterfeit postage and caused USPS to incur over $150 million in losses.

The Alleged Parties Used Third-Party Postage Providers to Carry Out Their Postal Fraud Scheme

Per the U.S. Attorney’s Office, Lijuan “Angela” Chen, 51, and her accomplice, Chuanhua “Hugh” Hu, 51, ran a shipping operation in the City of Industry, east of downtown Los Angeles. The pair reportedly operated warehouses where they received imports from Chinese logistics and eCommerce businesses, then distributed parcels throughout the United States via USPS.

In 2020, the pair started using counterfeit shipping labels. Chen and Hu received parcels from vendors and allegedly applied fake shipping labels they printed through third-party postage providers before injecting the packages into the USPS network. Per officials, Hu allegedly fled the country after authorities became aware of the scheme and moved to China, where he continued creating counterfeit postage remotely. At the same time, Chen remained in the U.S. to oversee the warehouses.

Over roughly three and a half years, the pair allegedly shipped tens of thousands of packages with counterfeit postage per day. In a press release, the Justice Department wrote the following:

“From January 2020 to May 2023, Chen and Hu knowingly mailed and caused to be mailed more than 34 million parcels containing counterfeit postage shipping labels, which caused more than $150 million in losses to USPS.”

U.S. Postal Inspection Service Hones in on Counterfeit Postage Creators, Other Postal Crimes

The law enforcement arm of USPS, the U.S. Postal Inspection Service, investigated Chen and Hu’s postal fraud scheme (the USPIS also worked alongside Criminal Investigation teams from the Internal Revenue Service). In addition to investigating counterfeit postage schemes like Chen and Hu’s, the USPIS also investigates postal crimes such as mail and package theft, education mail fraud, identity theft, prohibited mail, money laundering, and more.

According to the DOJ’s press release, Chen was arrested in May 2023, and her sentencing hearing is scheduled for August 2nd. As part of her agreement, she pleaded guilty to one count of conspiracy to defraud the United States and one count of the use of counterfeit postage. If convicted, she could face up to five years in federal prison for each count.

Hu has also been “charged with one count of conspiracy to defraud the United States, three counts of passing and possessing counterfeit obligations of the United States, and one count of forging and counterfeiting postage stamps.”