Florida Resident Defrauds US Postal Service out of $1.5 Million
From Florida we get the sad tale of a fraud committed against the United States Postal Service. According to the Miami Herald we learn that Edwin Jim Garcia-Albarracin has been charged criminally for ripping off the USPS by making claims for damaged goods. He would by postal insurance for internet sales of goods and then make claims against that insurance for goods he mailed being damaged, when they were not. Apparently he did this to the tune of $1.5 Million before he was charged by the Feds.
No, this is not a record-shattering amount of money. Nor are we particularly surprised that somebody might try to pull a fast one on the Postal Service and make a few extra bucks ($1.5 million is more than few), but there are a few other things here we may want to watch.
First of all the prosecution for this kind of fraud on a criminal level may provide a worthwhile precedent for those of us making out False Claims Act Allegations. It would seem a fairly straight-forward matter, but this case may help us establish that yes, ripping off the Postal Service is ripping off government funds.
You would be surprised how difficult that issue once was in litigation. The entire False Claims Act had to be amended, because of a decision by John Roberts when he was on the DC Circuit, U.S. ex Rel. Totten v. Bombardier Corp., 286 F.3d 542 In which Roberts held, “Amtrak is not the Government.” Maybe not, but as a result of that ruling, care was taken to expand the reach of the False Claims Act. When the Act was amended in 2009 the definition of “Claim” was defined and it expanded liability beyond acts that specifically involved ripping off a government agency, which Amtrak was not according to Roberts, but to include situations when government funds were at issue, which would have made the difference. Now the Act defines a claim to include a situation when the money or property is to be spent or used on the Government’s behalf or to advance a Government program or interest, and when the United States Government and if the government provides any of the money…there can be liability, despite the fact that a government agency itself may not be directly involved.
So, now ripping off Amtrak would fall under the law, whereas before it was Amended Roberts ruled differently.
Most interesting to me is the whole idea that maybe the government is watching online sales and online marketing. This case involved Postal Service issues and they added wire fraud and money laundering counts which may be applicable in many of our cases as well.
We have seen almost nothing in the way of whistleblower litigation in this increasingly huge area of the marketplace. I doubt the really big players are leaving themselves open for online fraud, but there are so many players. You have to wonder about any online sales involving products paid for by a government health care program. What’s going on there. Customs duties not being paid would also be subject to False Claims Act litigation.
It’s always good to see the govenrment crack down on fraud. This defendant, if the allegations are true, was particularly brazen in his attempts to go after the Postal Service and of course, they can not allow somebody to lie to claim money against their insurance. Yet, this guy is probably not the only one using the mail and an online store to advance the fraud.
Maybe, this case will prove a harbinger of the government’s willingness to investigate the online market place and abuse of the postal system.