Postage stamps, records manipulation, and a clandestine call to report suspicions. It has the makings of a good series to binge watch on a rainy weekend.

Instead, it’s a recent audit report on improving the controls around stamp stock at postal retail outlets. And it started with a call to our Hotline to report suspicious transactions involving stolen stamps from a Louisiana postal station.

Our initial investigation confirmed that a U.S. Postal Service manager with access to postage stamp inventory was selling unit reserve stock – stamp-related and philatelic products that had not been assigned to areas within the unit – on eBay at reduced prices. We discovered the unit’s stock reserve was abnormally large for an operation of its size. The manager’s position allowed him to circumvent controls and manipulate data records to avoid detection. As a result, he sold postage stamps valued at more than $636,000 and pocketed the cash. (He was caught, sentenced to prison, and ordered to repay all he stole.)

The case prompted our audit on USPS controls designed to address unit reserve stamp stock accountability for all 35,000 postal retail units. We found the controls were not always adequate or used effectively. Management did not thoroughly monitor and manage units with excess or excludable stamp stock. (Excess stock is stamps greater than the unit’s authorized limit, and excludable means Christmas, philatelic, or redeemed stock.)

We also found management didn’t review orders that exceeded authorized stock limits as required or monitor units that place more than the maximum-allowed three stock orders a month. USPS agreed with our recommendations focused on tightening existing controls and instituting new ones, such as requiring approval for stamp stock orders that exceed authorized dollar and number limits and requiring witnesses to verify stock shipments. source

Press Release from US Attorney’s Office

Former Manager of North Kenner Post Office Sentenced To 30 Months for Stealing More Than $630,000 in Postal Stamps

May 30, 2019
NEW ORLEANS – United States Attorney Peter G. Strasser announced today that RYAN S. CORTEZ, age 47, of Des Allemands, Louisiana, was sentenced today for Misappropriation of Postal Funds.

According to court records, special agents with the U.S. Postal Service, Office of Inspector General (“USPS-OIG”) were notified by PayPal and eBay regarding significant quantities of U.S. Postal stamps being sold by CORTEZ on eBay.  A subsequent investigation by Postal OIG revealed that, as manager, CORTEZ had increased the North Kenner Post Office’s reserve stamp stock by more than $600,000.  Subpoenaed records from CORTEZ’S Regions Bank account revealed substantial deposits, including more than $58,000 in a one-month period in the summer of 2018.

During their investigation, Postal OIG agents determined CORTEZ withdrew thousands of dollars on a regular basis at the Harrah’s Casino in New Orleans.  Harrah’s records revealed CORTEZ lost over $667,000 since 2011 and lost over $220,000 in 2017.  Postal records indicate CORTEZ earned an annual salary of $70,818.

On October 10, 2018, Postal OIG special agents executed a federal search warrant issued by a federal magistrate judge at CORTEZ’s residence in Des Allemands. Agents found evidence linking CORTEZ to the ordering of the stamps from the Stamp Fulfillment Center thus increasing the reserve stamp stock for the North Kenner Post Office.  During the search of the Post Office, Postal OIG special agents advised CORTEZ of his Miranda rights and told him that they wanted to discuss financial issues with the Post Office.  CORTEZ admitted to Postal agents that he had stolen stamps from the North Kenner Post Office and sold them on eBay. When asked to estimate the dollar amount of stamp stock that had been stolen, CORTEZ responded, “Hundreds of thousands.” CORTEZ claimed he began selling stamps on eBay in 2015. CORTEZ said he was addicted to gambling and the money obtained from the illegal sale of stamps was to support his gambling addiction.  CORTEZ confirmed he manipulated stamp stock counts by using another supervisor’s password to access the computer system. As a result, existing internal controls failed to detect the theft of these stamps.

In total, Postal records reveal that CORTEZ stole over $630,000 in U.S. stamps and sold them on eBay.  According to Postal authorities, CORTEZ’s illegal activities constitute one of the largest internal Postal thefts by a Postal Service employee in the history of the U.S. Postal Service.

United States District Court Judge Barry W. Ashe sentenced CORTEZ to 30 months imprisonment, followed by three (3) years of supervised release, and ordered CORTEZ to pay restitution in the amount of $856,801.41.

U.S. Attorney Peter G. Strasser praised the work of the U.S. Postal Service, Office of Inspector General.  The prosecution of this case is being handled by Assistant U.S. Attorney Brian M. Klebba, Supervisor of the Financial Crimes Unit.

Former USPS Manager of Louisiana Post Office Pleads Guilty To Stealing Over $630,000 in Stamps

Louisiana USPS manager Charged with Misappropriation of Postal Fund

Louisiana USPS manager stole over $630K worth of stamps, sold them on eBay