A U.S. Postal Service Office of Inspector General investigation into a North Carolina contractor's suspicious invoicing has saved the Postal Service more than $3.6 million in future fraudulent payments.
The Office of Investigations, which routinely monitors Postal Service contracts for possible fraud using proprietary data analytics tools, flagged the contractor's invoicing and subpoenaed its owner, according to the OIG.
During an interview, the owner's story unraveled, revealing deliberate fraud. Special agents presented evidence that he submitted fake invoices with inflated work hours, billed travel miles as labor, and forged or altered signatures from postal employees.
To inflate equipment costs, the owner claimed rental equipment as company owned. He also failed to disclose subcontractors and billed supervisor hours for his staff to oversee subcontractors at work.
Just a day after the interview, the Postal Service cut ties with the contractor, which settled out of court for $1 million with federal authorities. The investigation prevented almost $3.67 million more in future fraudulent payments.
"The USPS OIG will continue to aggressively investigate companies that engage in activities designed to defraud the Postal Service's contracting process," said Kevin Cloninger, Executive Special Agent in Charge. "This settlement demonstrates that our special agents, along with the United States Attorney's Office, will pursue contractors that overcharge the government and enrich themselves at the expense of USPS customers."
The OIG asks anyone who suspects or knows of contract fraud against the Postal Service to report it to its Hotline.