LOS ANGELES (CN) — A Southern California woman pleaded guilty Friday to charges she defrauded the U.S. Postal Service out of more than $150 million by using counterfeit postage to ship tens of millions of packages.
Lijuan “Angela” Chen, 51, who was arrested this past May, pleaded guilty to conspiracy to defraud the United States and to the use of counterfeit postage, according to a statement from the U.S. attorney's office in Los Angeles. She faces as long as five years in prison.
Chen and her co-defendant Chuanhua “Hugh” Hu, who has fled to China and is considered a fugitive, ran a shipping business in the City of Industry, an industrial enclave east of downtown LA. They operated warehouses where they received daily shipments from Chinese logistics and e-commerce businesses, which they sent by U.S. mail throughout the country.
However, rather than paying for legitimate postage, Hu printed counterfeit Nestamps, postage that can otherwise be bought legally online from third-party vendors. In late 2019, Hu became concerned that law enforcement was after him and he fled to China where he developed a computer program to create counterfeit postage shipping labels.
Chen, meanwhile, stayed in California and managed the warehouses they used to distribute packages for their clients bearing counterfeit postage.
Prosecutors say Hu and others working with him set up web portals where their customers could order the counterfeit PC Postage for their shipments. The customer then affixed the barcode they received through Hu's computer programs and shipped their products by airmail to Chen's warehouses in LA County.
At the warehouses, the barcodes were scanned and Hu's computer program would generate the counterfeit postage label to have it delivered by the U.S. Postal Service.
On a daily basis Chen's business would take tens of thousands of packages to USPS distribution centers. The packages with the counterfeit postage were stacked in huge "gaylord" bulk boxes with the top layer consisting of "altered" counterfeit postage rather than "duplicate" counterfeit labels in an effort to avoid detection.
Between January 2020 and May 2023, Chen mailed 34 million packages with counterfeit postage, according to her plea agreement, causing over $150 million in losses to the Postal Service.
“This defendant participated in a fraud scheme that caused massive losses to our nation’s postal service,” U.S. Attorney Martin Estrada said. “My office will continue to focus on holding fraudsters accountable and bringing justice to victims everywhere.”
As part her plea deal, Chen has agreed to forfeit the unspecified amount of money in bank accounts seized by federal prosecutors. She also agreed to forfeit a dozen real estate properties in the San Gabriel Valley east of LA.
Chen's attorney didn't immediately respond to a request for comment on her plea.
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