A Los Angeles-area woman was sentenced last week to two years and six months in prison and fined by a federal court for using counterfeit postage to ship tens of millions of parcels from China, causing more than $150 million in losses to the U.S. Postal Service.
Lijuan “Angela” Chen, 53, pleaded guilty in April 2024 to conspiracy to defraud the United States and use of counterfeit postage. In addition to her prison sentence, she was ordered to pay more than $158 million in restitution.
According to her plea agreement, from at least November 2019 to May 2023, Chen and co-defendant Chuanhua “Hugh” Hu owned and operated a package shipping business located in the City of Industry, helping China-based logistics companies ship packages through the U.S. mail system.
To avoid the cost of postage, Hu created 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.
Prosecutors said that in November 2019, Hu, knowing that law enforcement was investigating his use of counterfeit postage, fled the United States and moved to China. There, he 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 that she and Hu used to ship mail bearing counterfeit postage.
Starting 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. The shipping labels were fraudulent and frequently included, among other red flags, “intelligent barcode data” recycled from previously mailed packages, according to court documents. Intelligent barcode data is used in some postage shipping labels to evidence the payment of required postage for the shipped item.
On Oct. 25, 2022, for example, Chen and Hu tendered a shipment to the USPS with about 4,780 packages for delivery to individual addresses. The shipment included multiple packages bearing counterfeit USPS Priority Mail postage meter stamps.
From January 2020 to May 2023, Chen and Hu mailed more than 34 million parcels containing counterfeit postage shipping labels, resulting in more than $150 million in lost revenue for the Postal Service.
Hu remains a fugitive in China. He was charged with conspiracy, forgery and counterfeiting postage stamps.
Click here for more FreightWaves/American Shipper stories by Eric Kulisch.
Write to Eric Kulisch at ekulisch@freightwaves.com.
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