LOS ANGELES
Officials stated that a San Gabriel Valley woman pleaded guilty Friday to defrauding the United States Postal Service (USPS) out of more than $150 million by using counterfeit postage to ship tens of millions of parcels.
Lijuan “Angela” Chen, 51, of Walnut, pleaded guilty to conspiracy to defraud the United States and one count of use of counterfeit postage. Chen has been in federal custody since her arrest in May 2023.
According to her plea agreement, this allegedly happened: From November 2019 to May 2023, Chen and her co-defendant, Chuanhua “Hugh” Hu, 51, owned and operated a package shipping business in the City of Industry.
This company provided shipping services for China-based logistics businesses, including shipping packages via U.S. Mail
To avoid the cost of postage, Hu began creating false and counterfeit postage to ship packages by printing duplicate and counterfeit Netstamps – stamps that may be purchased online from third-party vendors and printed onto adhesive paper.
In November 2019, knowing that law enforcement was investigating his use of counterfeit postage, Hu fled the United States and moved to China.
After fleeing to China, Hu developed ways to make counterfeit postage and avoid detection, such as a computer program for fabricating counterfeit postage shipping labels.
Chen remained in the United States and managed the warehouses she and Hu used to ship mail bearing counterfeit postage.
In 2020, Chen and Hu began affixing counterfeit postage to mail they presented to USPS for delivery.
Chen and Hu received parcels from the China-based vendors and others, applied shipping labels showing postage purportedly paid, and then arranged for the parcels to be transferred to USPS facilities to be shipped across the nation.
According to court documents, the shipping labels were fraudulent and frequently included “intelligent barcode data” recycled from previously mailed packages, among other red flags.
Intelligent barcode data is used in some postage shipping labels to evidence the payment of required postage for the shipped item.
For example, on October 25, 2022, Chen and Hu were transported to USPS a delivery of approximately 4,779 packages to be shipped via U.S. Mail.
This delivery included multiple packages bearing counterfeit USPS Priority Mail postage meter stamps.
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.
As part of her plea agreement, Chen has agreed to forfeit funds that law enforcement seized from her bank accounts, insurance policies, and real estate in Walnut, Chino,
Chino Hills, South El Monte, Diamond Bar, and West Covina.
“Ms. Chen has admitted today that she conspired with Mr. Hu to defraud the United States Government willfully and knowingly,” said Special Agent in Charge Tyler Hatcher, IRS Criminal Investigation, Los Angeles Field Office. “IRS:CI will work tirelessly with our partners to protect taxpayer interests in the postal service and other government agencies.”
U.S. Judge Josephine L. Staton scheduled an Aug. 2 sentencing hearing. Chen faces up to five years in federal prison for each count.
Hu, who is believed to be a fugitive residing in China, is 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.
The defendants are presumed innocent unless proven guilty.
The U.S. Postal Inspection Service and IRS Criminal Investigation investigated this matter.
Assistant U.S. Attorneys James C. Hughes and Richard E. Robinson of the Major Frauds Section are prosecuting this case.