Logistics operators that rely on the U.S. Postal Service for last-mile delivery of international parcels should tighten postage verification after a major counterfeit postage scheme resulted in more than $150 million in losses to USPS, according to a FreightWaves report.
Lijuan “Angela” Chen, 53, of the Los Angeles area, was sentenced last week to two years and six months in federal prison and ordered to pay more than $158 million in restitution, the report stated. Chen pleaded guilty in April 2024 to conspiracy to defraud the United States and use of counterfeit postage. The sentencing follows a scheme that ran from at least November 2019 to May 2023.
Scheme Details: Counterfeit Netstamps and 34 Million Parcels
According to FreightWaves, Chen and co-defendant Chuanhua “Hugh” Hu owned and operated a package shipping business in the City of Industry, California, that helped China-based logistics companies ship packages through the U.S. mail system. Hu created false and counterfeit postage by printing duplicate and counterfeit Netstamps — stamps purchased online from third-party vendors and printed onto adhesive paper.
When law enforcement began investigating in November 2019, Hu fled to China and developed new methods to fabricate counterfeit postage, including a computer program for generating fake shipping labels. Chen remained in the United States to manage the warehouses used to ship mail bearing counterfeit postage.
Starting in 2020, the pair affixed counterfeit postage to parcels received from China-based vendors and others. They applied shipping labels showing postage purportedly paid, then arranged for the parcels to be transferred to USPS facilities for nationwide delivery. The labels frequently included recycled “intelligent barcode data” from previously mailed packages — a red flag noted in court documents.
On October 25, 2022, for example, Chen and Hu tendered a shipment of about 4,780 packages to USPS, multiple of which bore counterfeit USPS Priority Mail postage meter stamps. From January 2020 to May 2023, more than 34 million parcels containing counterfeit postage were mailed, resulting in over $150 million in lost revenue for the Postal Service.
Affected Trade Lanes and Modes
| Aspect | Detail |
|---|---|
| Origin | China-based logistics companies |
| Entry point | Los Angeles area (City of Industry warehouses) |
| Delivery mode | USPS last-mile (Priority Mail, etc.) |
| Volume | >34 million parcels over ~3.5 years |
| Loss | >$150 million USPS revenue |
| Red flag | Recycled intelligent barcode data on labels |
The scheme primarily impacted the China-to-U.S. e-commerce parcel lane, using USPS for final delivery. No air or ocean freight specifics were mentioned, but logistics operators consolidating parcels from China for USPS injection should be aware of similar fraud risks.
Implications for Shippers and Operators
Freight forwarders, 3PLs, and last-mile carriers that tender parcels to USPS should verify postage authenticity and audit barcode data for recycling patterns. The case underscores the need for compliance programs that detect counterfeit postage, as USPS may increase scrutiny on high-volume mailers, particularly those handling parcels from China. According to FreightWaves, Hu remains a fugitive in China, charged with conspiracy, forgery, and counterfeiting postage stamps. Operators should also ensure their vendors and subcontracted logistics partners use legitimate postage sources to avoid legal exposure.
Watch List
- USPS enforcement: Possible increased monitoring of intelligent barcode data and postage verification for high-volume shippers.
- Fugitive status: Hu remains at large in China; any future extradition or further indictments could reveal additional co-conspirators or operational methods.
- Industry response: Potential adoption of digital postage authentication tools by logistics companies to prevent similar fraud.
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