A stunning case of fraud has come to light, involving a San Gabriel Valley woman who defrauded the U.S. Postal Service of over $150 million. The intricate scheme unfolded over several years and involved counterfeit postage, tens of millions of packages, and a web of deception.
Masterminds Behind the Postal Service Scheme
At the center of this elaborate scheme were Lijuan “Angela” Chen and Chuanhua “Hugh” Hu. Their collaboration spanned several years and involved meticulous planning to exploit vulnerabilities within the USPS system. The depth of their involvement and the scale of the fraud highlight the audacity and cunning of the individuals involved.
Hu’s Involvement
Hu, also aged 51, played a crucial role in the execution of the scheme. His expertise in creating counterfeit postage stamps was instrumental in facilitating the fraudulent activities. Together with Chen, he contributed to the planning and implementation of the elaborate operation.
In November 2019, knowing that law enforcement was investigating him, Hu fled to China. After fleeing, he developed ways to make counterfeit postage and avoid detection. He created a computer program to fabricate counterfeit postage labels. Chen stayed in the United States and managed the warehouses used to ship mail with fake postage.
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Starting in 2020, Chen and Hu began using counterfeit postage on packages they sent to USPS for delivery. They received parcels from China-based vendors, applied fake shipping labels, and arranged for the parcels to be sent across the nation. The labels were fraudulent and often included recycled “intelligent barcode data” from previously mailed packages.
On October 25, 2022, they sent a delivery of approximately 4,779 packages to USPS, many with counterfeit USPS Priority Mail postage meter stamps. From January 2020 to May 2023, they mailed over 34 million parcels with fake postage labels, causing more than $150 million in losses to USPS.
Flight to Avoid Capture
As authorities began to close in on their illicit activities, Hu made the decision to flee the country, seeking refuge in China. This strategic move allowed him to evade arrest and continue his fraudulent activities from abroad, complicating efforts to bring him to justice.
To conceal their illegal activities, Chen and Hu operated a postal package shipping business in the City of Industry. This legitimate front provided cover for their fraudulent endeavors, allowing them to carry out their scheme under the guise of lawful business operations within the postal system.
Under the pretext of legitimate business operations, Chen and Hu engaged in the creation of counterfeit postage stamps. Hu’s expertise in producing fake postage stamps enabled them to affix these counterfeit stamps to tens of millions of packages, enabling them to evade postage fees and maximize their profits.
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Red Flags in the Scheme
Despite their efforts to conceal their fraudulent activities, the counterfeit labels used by Chen and Hu contained several glaring red flags. Notably, the inclusion of recycled “intelligent barcode data” from previously mailed packages raised suspicions and ultimately led to the unravelling of their elaborate scheme, highlighting vulnerabilities within the postal system.
Hu’s decision to flee to China marked a significant development in the case. Despite being aware of the investigation, he chose to evade capture and continue his fraudulent activities from abroad, exacerbating the challenges faced by authorities in prosecuting those involved in the scheme.
Chen’s Guilty Plea
In the face of overwhelming evidence, Chen ultimately pleaded guilty to her role in the scheme. Her admission of guilt underscores the seriousness of the charges against her and highlights the extent of her involvement in the fraudulent activities that defrauded the USPS of a staggering amount.
Legal Proceedings
With Chen’s sentencing hearing scheduled for August 2, the legal proceedings surrounding the case are poised to reach a critical juncture. The potential penalties she faces, including up to five years in federal prison for each count, underscore the gravity of the charges brought against her.
Hu’s Status as a Fugitive
Meanwhile, Hu remains a fugitive, believed to be residing in China. Despite facing charges related to conspiracy, passing counterfeit obligations, and forging postage stamps, his whereabouts remain unknown, complicating efforts to apprehend him and bring him to justice.
Investigative Efforts
The investigation into this elaborate fraud was conducted meticulously by teams from the U.S. Postal Inspection Service and IRS Criminal Investigation. Their diligent efforts in uncovering the extent of the fraud highlight the importance of robust investigative measures in combating sophisticated criminal schemes.
The case involving Lijuan Angela Chen and Chuanhua Hugh aka “Hu” reveals the alarming extent of fraud within the postal system. While Chen awaits sentencing after pleading guilty, Hu remains at large. This case underscores the need for tighter security measures and cooperation among law enforcement agencies to prevent such schemes in the future.
