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Postal Inspectors Nab Amazon Sellers for Alleged Fraud

USPS
Postal Inspectors Nab Amazon Sellers for Alleged Fraud

The government accused two Amazon sellers of altering postage labels resulting in a $6 million loss to the USPS. The US Attorney’s Office charged the men by complaint with one count each of theft of government funds and one count each of postage stamp fraud.

The government alleged that the defendants purchased Flat Rate Envelope postage labels and removed the required USPS visual endorsement “FLAT RATE ENV” from the postage label and applied the altered labels to larger boxes.

“They altered the postage labels in order to send large household items that would not ordinarily fit into a Flat Rate Envelope (such as cases of bottled water, laundry detergent, and cases of soda) at the discounted flat rate,” the government charged.

According to the complaint, the Amazon business purchased approximately 240,471 USPS Priority Mail postage labels from January – September 2020, almost all at Flat Rate Envelope.

The complaint further alleged that on September 22, 2020, law enforcement officers executed a search warrant at the merchant’s warehouse, “where they discovered 225 Priority Mail parcels,” and it alleged that 223 of those parcels were affixed with fraudulently altered postage labels.

The government’s cooperating witness allegedly told law enforcement that “if an item could not fit into a flat rate envelope, the Defendants directed Cooperating Witness-1 to manipulate the postage label by removing the visual endorsement” to avoid paying the full amount of postage required for their packages.

In the complaint, a Postal Inspector with the US Postal Inspection Service explained how Amazon sellers purchase shipping labels through the “Amazon Transportation for Merchants” system, known to sellers as Buy Shipping:

“One type of ePostage that USPS offers through Amazon is Amazon Transportation for Merchants (“ATFM”). The ATFM program as signs each participating retailer a unique Customer Reference Number (a “CRN”), which the retailer uses to purchase postage through Amazon. The Retailer can then apply that postage, in the form of a printed label, to the retailer’s shipments to Amazon customers. Amazon periodically uses the CRN to compute the total postage purchased by each retailer, aggregates all retailers’ total postage purchases into a single file, and submits that file electronically to USPS. USPS then deducts the total postage amount from an Amazon account with USPS.

“Each ATFM postage label bears a unique USPS delivery confirmation number and barcode carrying information associated with the particular ATFM retailer. For example, the delivery confirmation number is linked to the retailer’s CRN, the mailing date, the class of mail, the postage amount, and the parcel’s weight. Thus, every ATFM postage label can be linked back to a specific Amazon merchant.”

The government noted in its press release that “The charges and allegations in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.”

You can find the press release on the USAO site on Justice.gov.

Ina Steiner on EmailIna Steiner on LinkedinIna Steiner on Twitter
Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.

4 thoughts on “Postal Inspectors Nab Amazon Sellers for Alleged Fraud”

  1. Seems like it would encourage small time mail label fraud as it took 240K+ altered labels for 1 business to get caught. Sounds like USPS is sorely incompetent and needs to investigate their own fraud inspectors if this much theft occurs.

  2. USPS should also investigate their overpaid, union protected thugs about the physical abuse of packages that were left at their mercy by naive, trusting customers.

  3. By the same token, how about investigating the hundreds of dollars I have to dispute every year on erroneous APV adjustments?? 4 lbs on a 9″x12″ tyvek envelope??

  4. Funny how USPS employees shrug their shoulders and say “Not my job, I am not working any harder than I can …” and let it pass on. But then, why break a sweat in a protected job position?

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