San Gabriel Valley woman pleads guilty in $150M USPS counterfeit postage fraud

A woman from San Gabriel Valley has admitted to defrauding the United States Postal Service (USPS) out of more than $150 million by using counterfeit postage for shipping tens of millions of parcels. Lijuan “Angela” Chen, 51, from Walnut, pleaded guilty to one count of conspiracy to defraud the United States and one count of use of counterfeit postage. She has been in federal custody since her arrest in May 2023.

“This defendant participated in a fraud scheme that caused massive losses to our nation’s postal service,” said United States Attorney Martin Estrada. “My office will continue to focus on holding fraudsters accountable and bringing justice to victims everywhere.”

Chen's plea agreement reveals that she and her co-defendant, Chuanhua “Hugh” Hu, 51, owned a package shipping business in the City of Industry. The company shipped packages via U.S. Mail for China-based logistics businesses. To avoid postage costs, Hu created false and counterfeit postage by printing duplicate Netstamps purchased online.

In November 2019, aware that law enforcement was investigating his activities, Hu fled to China where he developed methods for fabricating counterfeit postage labels undetected. Chen stayed in the U.S., managing warehouses used for mailing items with fake postage.

Starting in 2020, Chen and Hu began using counterfeit postage on mail presented to USPS for delivery. They received parcels from China-based vendors and others, applied fraudulent shipping labels showing purportedly paid postage, then transferred these parcels to USPS facilities nationwide. The labels often included recycled "intelligent barcode data" from previously mailed packages as evidence of paid postage.

For instance, on October 25, 2022, Chen and Hu transported approximately 4,779 packages bearing counterfeit USPS Priority Mail meter stamps to USPS for shipment.

Between January 2020 and May 2023, they knowingly mailed over 34 million parcels with counterfeit postage labels causing more than $150 million in losses to USPS.

As part of her plea deal, Chen agreed to forfeit funds seized from her bank accounts and properties located in Walnut, Chino Hills, South El Monte, Diamond Bar, West Covina among other places.

“The Postal Service and the Postal Inspection Service will continue implementing measures to preserve security,” said Inspector Carroll Harris from the Los Angeles Division of the Postal Inspection Service. He warned fraudsters about ongoing efforts against such schemes.

“Ms. Chen has admitted today that she conspired with Mr. Hu to defraud the United States Government willfully and knowingly,” said Special Agent Tyler Hatcher from IRS Criminal Investigation's Los Angeles Field Office.

United States District Judge Josephine L. Staton scheduled an August 2 sentencing hearing where Chen faces up to five years in federal prison per count.

Hu remains a fugitive believed to be residing in China facing charges including conspiracy against the United States and counterfeiting obligations like stamps.

The investigation was conducted by the United States Postal Inspection Service alongside IRS Criminal Investigation with Assistant U.S Attorneys James C Hughes & Richard E Robinson prosecuting this case.