Revenue Protection Program US Postal Inspection Service

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Revenue Protection ProgramUS Postal Inspection
Service

• Mailers Technical Advisory Committee
• November 19, 2008

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Inspection Service Revenue Protection Program

• Protect USPS and ratepayer by ensuring protection
  against revenue fraud and loss
• Identify revenue loss vulnerability and
  prevention by performing risk assessments of
  revenue systems
• Ensure fair competitive environment for mailers
  via deterrence, detection and enforcement

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Inspection Service Revenue Protection Program

• FY 2008 Results
• Over 400 open investigations
• 52.5 million in losses identified
• 17 million recovered
• 90 prosecutions

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Historical Revenue Risk Areas

• By-Pass Mailings
• Bulk Mail Entry
• Mail circumvents verification and acceptance
• Mailing statement/payment information not
  recorded
• PVDS
• Additional volumes added post acceptance
• Altered Form 8125 at destination
• Collusion
• Bribery
• Gratuity

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Historical Revenue Risk Areas

• Postage Meters
• Tampering manipulation of mechanical meters
• Cloning stolen meter with altered serial number
• PC Postage
• Duplication photocopying of IBI
• Short Paid deliberate underpayment

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Historical Revenue Risk Areas

• Stamps
• Counterfeiting
• Retail Fraud
• Returned Checks non-sufficient funds, account
  closed
• Credit Cards Skimmed, ID takeover

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Historical Revenue Risk Areas

• Eligibility Fraud
• Non-Profit
• Must be authorized by USPS at non-profit rates
• Periodicals
• Must be authorized by USPS at periodical rates
• Presort
• Accurate sortation
• Correct postage
• Move Update
• Mailers must use approved Move Update method
• COA matches must be corrected

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Move Update Case History

• Case Example 1
• Whistleblower reveals deliberate noncompliance
• 6.2 million settlement based on lost automation
  discount
• 4.6 million to USPS
• 1.2 million to whistleblower
• Case Example 2
• Corporation reports non-compliance for 2
  subsidiaries
• 8 million settlement
• 5 million settlement

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Inspection Service Follow-up

• Established a Move Update non-compliance
  detection methodology using USPS technology
• Initiated investigative attention based on
  results