Woman pleads guilty in $150 million counterfeit stamp scheme
LOS ANGELES – A Los Angeles County woman, who was accused of using counterfeit stamps to ship tens of millions of parcels, pleaded guilty Friday to defrauding the United States Postal Service (USPS) out of more than $150 million.
Lijuan “Angela” Chen, 51, a resident of Walnut, pleaded guilty to one count of conspiracy to defraud the United States and one count of use of counterfeit postage. Chen has been in federal custody since her arrest in May 2023.
A US Postal Service (USPS) logo is pictured on a mail box in the Manhattan borough of New York City, New York. FILE PHOTO/REUTERS/Carlo Allegri
“This defendant participated in a fraud scheme that caused massive losses to our nation’s postal service,” said United States Attorney Martin Estrada in a statement. “My office will continue to focus on holding fraudsters accountable and bringing justice to victims everywhere.”
According to her plea agreement, from November 2019 to May 2023, Chen and her co-defendant, Chuanhua “Hugh” Hu, 51, owned and operated a package shipping business located in the City of Industry. This company provided shipping services, including the shipping of packages via US Mail, for China-based logistics businesses.
To avoid the cost of postage, Hu began creating 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.
In November 2019, knowing that law enforcement was investigating his use of counterfeit postage, Hu fled the US and moved to China. After fleeing to China, Hu developed ways to make counterfeit postage and avoid detection, such as a computer program for fabricating counterfeit postage shipping labels. Chen remained in the US and managed the warehouses that she and Hu used to ship packages using 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.
According to court documents, the red flags raised by fake postage included the reuse of “intelligent barcode data” already applied to other mailed packages. Those data are used to prove the labels have been paid for prior to shipping.
From January 2020 to May 2023, Chen and Hu mailed more than 34 million parcels using counterfeit postage, which caused more than $150 million in losses to USPS.
As part of her plea agreement, Chen has agreed to forfeit funds that law enforcement seized from her bank accounts, insurance policies and real estate in Walnut, Chino, Chino Hills, South El Monte, Diamond Bar and West Covina.
Hu, who is believed to be a fugitive residing in China, is charged with one count of conspiracy to defraud the United States, three counts of passing and possessing counterfeit obligations of the United States, and one count of forging and counterfeiting postage stamps.
