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Postal Service scandal: Feds uncover stolen meds, embezzled funds — and 48,288 hoarded letters

U.S. Postal Service delivery trucks. (Andrew Harrer/Bloomberg)

Cellphones lifted from packages.

Veterans’ medications that never made it to their patients.

Nearly 50,000 pieces of undelivered mail that a Postal Service worker simply let accumulate in her home.

Federal authorities have found more than two dozen cases of mail theft and related crimes in Southern California as part of a sweep targeting corruption and criminal activity affecting the U.S. Postal Service, the U.S. attorney’s office of the Central District of California announced last Friday.

In all, federal prosecutors charged 33 defendants in 28 cases with offenses including mail fraud, conspiracy, embezzlement and making false statements. The defendants ranged in age from 23 to 73, and most cases involved Postal Service employees, the attorney’s office said.

In a statement, the Postal Service condemned the actions of those who had been charged while defending the integrity of the “overwhelming majority” of its employees. The already beleaguered federal agency has been debating for years its financial future and how its services should evolve in an increasingly digital world.

“The mail system plays an important role in our country’s commerce and social communication. Maintaining its integrity is vital,” U.S. Attorney Eileen M. Decker said in a statement. “Mail theft across Southern California has increased recently, which is significant since this type of crime tends to be a precursor to other crimes, like identity theft and drug offenses. As a result, we are stepping up enforcement activities, including dealing aggressively with corruption within the Postal Service.”

Many of the cases, made public last week, showed a range of fraudulent activity that pervaded many levels of the agency.

In one case, the defendant, Jarol Garcia, was a former mail handler who previously served as local area president of the Mail Handlers Union. The attorney’s office said Garcia stole mobile phones from packages going through the Moreno Valley Delivery Distribution Center, where he worked. Garcia would then trade the phones on a website; at one point, he allegedly possessed at least 166 mobile phones he had stolen from the mail, according to an indictment.

One defendant, Nicole Elwood, allegedly stole mail and packages that contained medications, including some sent from the U.S. Department of Veterans Affairs to veterans, the attorney’s office said. She was charged with theft of mail by a postal employee. It was unclear what happened to the medications.

Several defendants were charged with mail theft or with dumping mail altogether. In the most extreme instance of this from the sweep, postal carrier Sherry Naomi Watanabe was charged with delaying the mail after investigators found “approximately 48,288 pieces” of mail stashed in her Los Angeles-area home, according to a plea agreement. The mail was supposed to have been delivered to customers on Watanabe’s route in Placentia, Calif., court documents said.

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Another case charged mail carrier Norman A. Muschamp with conspiracy to commit access-device fraud and to steal mail. The indictment alleged that Muschamp was part of a conspiracy to use information belonging to identity-theft victims to order prepaid PayPal debit cards mostly sent to fake addresses on his route.

Muschamp then allegedly obtained PayPal debit cards from the mail and delivered them to co-conspirators in exchange for cash, the attorney’s office said, adding that investigators think the scheme caused hundreds of thousands of dollars in losses.

Still other cases had nothing to do with letters or packages.

One 73-year-old former mail handler was charged with a misdemeanor over fraudulent mileage reimbursements. Another former contract driver was charged with conspiracy to steal government property, the attorney’s office said. The driver’s alleged crime? Siphoning about 385 gallons of fuel from contractor trucks.

The sweep comes amid years of debate about the future of the financially rocky USPS. Talk of cutting delivery service back from six days to five has repeatedly been floated, then pulled back.

In the first quarter of fiscal 2016, the USPS reported a quarterly net profit for the first time in almost five years. The agency’s $307 million in net income for the first quarter was a $1.1 billion turnaround from its $754 million net loss during the same period a year earlier.

However, in the spring, the USPS cut the price of its postage stamps for first-class mail by two cents, a move that means a $2 billion annual loss for the agency and which triggered more questions about how the Postal Service would make up for the lost income.

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On its website, the U.S. Postal Inspection Service maintains a list of mail-related fraudulent schemes that consumers should look out for. Not mentioned is the possibility that one’s mail could be compromised by a Postal Service employee.

“The criminal charges filed against these Postal Service employees are very concerning,” Postal Service spokesman Dave Partenheimer told The Washington Post in an email.

Partenheimer said he could not comment on the specific cases because some were under investigation.

However, “we can state that this type of alleged behavior within the Postal Service is neither tolerated nor condoned,” Partenheimer told The Post. “Moreover, the Postal Service can proudly state that the overwhelming majority of the Postal Service’s more than 636,000 employees are honest, hard-working and trustworthy individuals who would never engage in criminal behavior.”

Most of the defendants were charged in indictments that were returned by federal grand juries last week, the attorney’s office said.

Those charged as part of the sweep will be arraigned in U.S. District Court in Los Angeles, Santa Ana and Riverside, the attorney’s office said.

As for the hoarded mail found during the investigation, the U.S. Postal Service Office of Inspector General said it would preserve the mail as evidence for as long as needed — then have the letters delivered to their original destinations.

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