LOS ANGELES – A woman from the San Gabriel Valley has pleaded guilty to orchestrating a massive scheme to defraud the United States Postal Service (USPS), causing losses exceeding $150 million. Lijuan “Angela” Chen, 51, of Walnut, admitted her guilt in federal court today, confessing to conspiracy to defraud the United States and the use of counterfeit postage. Chen has been in custody since her arrest in May 2023 and now faces significant penalties for her role in the elaborate fraud.
“This defendant engaged in a sophisticated fraud scheme that inflicted substantial financial harm on our nation’s postal service,” stated United States Attorney Martin Estrada. “Our office remains committed to pursuing fraudsters, ensuring they are held accountable, and delivering justice to all victims.”
According to her plea agreement, Chen, in collaboration with her co-defendant, Chuanhua “Hugh” Hu, 51, operated a package shipping business in the City of Industry from at least November 2019 to May 2023. Their company catered to China-based logistics businesses, offering shipping services that included U.S. Mail. To drastically cut costs, Hu initiated a scheme involving the creation and use of fraudulent postage. He began generating counterfeit Netstamps – legitimate postage purchased online and printed by users – to ship packages without paying the required fees.
As the investigation into his counterfeit postage activities intensified in November 2019, Hu fled the United States and relocated to China. From abroad, Hu refined his counterfeit postage operation, developing methods to evade detection, including a specialized computer program designed to fabricate fake postage shipping labels. Chen remained in the United States, managing the warehouses used to process and ship mail bearing the illicit postage.
Starting in 2020, Chen and Hu systematically applied counterfeit postage to mail presented to USPS for delivery. They received packages from China-based vendors and others, affixed shipping labels with seemingly valid postage, and then transported the parcels to USPS facilities for nationwide distribution. However, these shipping labels were fraudulent, often exhibiting red flags such as “intelligent barcode data” recycled from previously mailed packages. This barcode data, intended to verify postage payment, was being manipulated to deceive the postal service.
On a single day, October 25, 2022, Chen and Hu arranged the delivery of approximately 4,779 packages to USPS, all intended for shipment via U.S. Mail. This delivery alone contained numerous packages bearing counterfeit USPS Priority Mail postage meter stamps, highlighting the scale and brazenness of their operation.
Between January 2020 and May 2023, Chen and Hu knowingly mailed, or caused to be mailed, over 34 million parcels using counterfeit postage shipping labels. This massive volume of fraudulent mail resulted in losses exceeding $150 million for the USPS, representing a significant financial blow to the postal service.
As part of her plea agreement, Chen has consented to the forfeiture of substantial assets seized by law enforcement. These assets include funds from her bank accounts, insurance policies, and real estate holdings located in Walnut, Chino, Chino Hills, South El Monte, Diamond Bar, and West Covina, demonstrating the financial gains she accrued through her illegal activities.
“The Postal Service, along with the Postal Inspection Service, is dedicated to maintaining the security and trust that our customers expect,” stated Inspector in Charge Carroll Harris of the Los Angeles Division of the Postal Inspection Service. “Counterfeit postage fraud not only causes financial losses to the Postal Service but also to legitimate customers. Let this be a clear warning: the Postal Inspection Service will relentlessly pursue and dismantle such schemes, ensuring perpetrators are brought to justice.”
Special Agent in Charge Tyler Hatcher of IRS Criminal Investigation, Los Angeles Field Office, added, “Ms. Chen has today admitted to willfully and knowingly conspiring with Mr. Hu to defraud the United States Government. IRS:CI is committed to collaborating with our partners to safeguard taxpayer interests within the postal service and all government agencies.”
United States District Judge Josephine L. Staton has scheduled a sentencing hearing for August 2. At this hearing, Chen faces a maximum statutory sentence of five years in federal prison for each of the two counts to which she pleaded guilty.
Hu remains at large, believed to be a fugitive residing in China. He is charged with multiple felonies, including conspiracy to defraud the United States, passing and possessing counterfeit obligations of the United States, and forging and counterfeiting postage stamps.
It is important to note that an indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty beyond a reasonable doubt in a court of law.
The United States Postal Inspection Service and IRS Criminal Investigation conducted the investigation into this case. Assistant United States Attorneys James C. Hughes and Richard E. Robinson of the Major Frauds Section are prosecuting the case.
