A direct mail lettershop and its production manager bilked the U.S. Postal Service out of millions of dollars by falsifying reports and using them to obtain refunds on postage, according to court documents.
Mastersort, of Santa Ana, CA, agreed to pay $3 million in restitution after pleading guilty last fall to two counts of mail fraud.
The firm’s former production manager, Jayprakash Dhanak, pleaded guilty to one count. He is likely to receive a maximum of 33 months in prison and may face a fine of up to $2.5 million when he is sentenced later this month, according to his attorney Edward Ord.
A disagreement remains over the exact amount of the loss to the USPS, and that could affect the sum paid by Dhanak, Ord said.
The U.S. Postal Inspection Service, which began investigating the case early in 1997, is unsure of when the scheme began, but is sure that it ended around April of that year.
According to the indictment, the defendants used the internal identification numbers of their customers to manipulate the amounts of metered and permit mail sorted at the facility, and then submitted false reports to the postal service for refunds and deductions.
Mastersort employees, acting on the instructions of Dhanak and his wife Leela, utilized a number of tactics to pull this off, the indictment alleged.
For example, mail was
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