The indictment Monday of U.S. Technologies Inc. chief executive C. Gregory Earls highlights one of the federal government's most often overlooked weapons against corporate crime: the U.S. Postal Inspection Service.
A federal grand jury charged Earls with securities, wire and mail fraud, alleging that he diverted $15 million from investors to his own purposes, including establishing trusts for his children and paying off earlier investors.
Earls, 58, has denied the charges. He is due to appear in U.S. District Court in Manhattan next Tuesday.
Much of the grand jury's decision was based on evidence gathered by Ann Marie Williamson and fellow postal inspectors. Federal prosecutors often turn to the Postal Inspection Service, one of the nation's two oldest law enforcement services, when their cases involve fraud through the mail and when the larger agencies with more diverse responsibilities -- such as the FBI -- are otherwise engaged.
The postal inspectors often take on issues before they become high-profile. They brought some of the early cases against crooked health care providers; they tackled identity theft when local police departments were not interested in it; in the 1980s, they were part of the team that went after Michael Milken.
The work of the 300 postal inspectors is largely overshadowed by that of the FBI and the U.S. attorneys. When President Bush convened his task force on corporate fraud last summer, he left the postal inspectors out. The White House changed that after a team of postal inspectors arrested the chief executive of Adelphia Communications Corp. on charges that he and his sons had looted the nation's sixth-largest cable television company. John, Michael and Timothy Rigas are scheduled to go on trial in January.
"They are the mouse that roared when it comes to white-collar crime. They only have a few dozen people in a place like New York and they have the impact of hundreds," said Jim Comey, the U.S. attorney for Manhattan, whose office is prosecuting Earls and the Rigases.
Nationwide, postal inspectors handled 3,355 fraud cases last year, arresting 1,634 people, up slightly from the previous year. Among them were five people associated with Adelphia. They have about 100 open investigations into what Chief Postal Inspector Lee R. Heath classifies as corporate fraud.
Prosecutors often turn to the much larger FBI for high-profile cases because it has many more offices around the country and can assign large numbers of highly skilled investigators to unravel complicated schemes. But the Securities and Exchange Commission and some federal prosecutors say there are advantages to using postal inspectors, particularly because they give corporate crime cases top priority.
"If you have a really good FBI agent, there are a world of cases you can do that lots of people think are sexier than these document-intensive cases. If you are a postal inspector and really good, these are the best cases you are going to get. The creme de la creme of the Postal Inspection Service does securities and health fraud," a federal prosecutor said, speaking on the condition that he not be named.
Prosecutors also said the Postal Inspection Service's smaller structure can work in its favor. For instance, when a witness in an East Coast case turns out to be in Texas, they said, the FBI often requires the lead agent to send someone stationed in Texas to interview the witness. But the lead postal inspector would simply get on a plane and do the interview, providing better continuity, they said.
Comey noted that postal inspectors are more likely to follow a case "until the last dog dies" rather than moving on to other matters.
Heath said that kind of continuity is deliberate particularly since the FBI reassigned some of its white-collar crime specialists to anti-terrorism duties.
"The other agencies may shift priorities on the fly. The FBI may shift to terrorism, or, for the Secret Service, protection is number one. For us, if someone is assigned to a case, they will pursue it to the very end," Heath said.