Online Vendor Sentenced in $5 Million Postage Fraud Scheme

SAN DIEGO ­– Cuong H. Nguyen was sentenced in federal court today after pleading guilty to a conspiracy to engage in a wide-ranging postage counterfeiting, forging, and tampering scheme that, over the course of multiple years and more than 160,000 packages, deprived the U.S. Postal Service (“USPS”) of approximately $5 million of postage due and owing.

Special Agents from U.S. Postal Inspection Service, IRS Criminal Investigation, and the Financial Investigations and Border Crimes Task Force (the “FIBC”—a multiagency Task Force based in San Diego and Imperial Counties, funded by the Treasury Executive Office of Asset Forfeiture)—led the investigation. As he admitted at the sentencing hearing before Hon. Cynthia A. Bashant, Cuong digitally altered, counterfeited, forged, and tampered with various “postage evidencing systems”—i.e., postage meters. These postage meters are intended to expedite the delivery and shipment of USPS packages by allowing mailers to purchase and affix postage labels in advance of depositing them into the mail.

In sentencing Mr. Nguyen, Judge Bashant said, “The USPS provides a valuable service. Fraudulent acts like this will prevent us from having the postal service in years to come.” Nguyen primarily used the postage evidencing system known as Click-N-Ship® when sending packages of beverages and food products from his businesses in San Diego. When the USPS received the packages with labels that Nguyen and others had altered, forged, and counterfeited, they paid much less to the USPS than was owed, but the packages—approximately 162,221 between 2015 and 2019—were delivered anyways.

Acting U.S. Attorney Randy S. Grossman said, “I commend the work of the USPIS, IRS-CI, and the FIBC for unraveling this complex web of digital crime. This is a great example of how the U.S. Attorney’s Office will continue to work collectively with our law enforcement partners to pursue the most challenging investigations as we protect our nation’s resources, including the U.S. Postal Service.”

“With the U.S. Postal Service delivering almost 150 billion pieces of mail annually scammers mistakenly believe they can hide and profit from postage fraud,” stated Inspector in Charge Carroll N. Harris III of the U.S. Postal Inspection Service Los Angeles Division. “The U.S. Postal Inspection Service has over 246 years of defending the nation’s mail system. We remain steadfast in exposing scammers. Today’s sentencing reaffirms the commitment Postal Inspectors have in holding criminals accountable and ensuring the public trust in the mail.”

“Mr. Nguyen perpetrated a complex postal fraud scheme and enriched himself with funds stolen from the United States,” said Special Agent in Charge Ryan L. Korner of IRS Criminal Investigation’s Los Angeles Field Office. “IRS Criminal Investigation is proud to lead the FIBC and to work with our law enforcement partners to root out financial frauds and to protect our country’s critical infrastructure.”

As a result of the conspiracy, Nguyen underpaid $5,127,712.88 in postage to the USPS, resulting in net profits to Nguyen, his businesses, and others of $862,374.00. His sentence of 3 years’ probation includes the obligation to forfeit $862,374.00, as profits, proceeds, and property obtained directly or indirectly from the conspiracy.

DEFENDANT                                               Case Numbers 21-CR-1131-BAS                                          

Cuong H. Nguyen                                           San Diego, CA                        Age: 37

SUMMARY OF CHARGES

Criminal Conspiracy – Title 18, U.S.C., Section 371

Maximum penalty: Five years in prison, forfeiture, and $250,000 fine

AGENCIES

United States Postal Inspection Service

IRS Criminal Investigation—Financial Investigations and Border Crimes Task Force


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Nguyen underpaid $5,127,712.88 in postage and receives a sentence of 3 years’ probation and forfeit $862,374.00

Sounds like he out like a bandit. Oh, that’s right he is one!

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