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Priority Males: Feds Charge North Jersey Pair With $6M Postage Scam

U.S. Postal Inspection Service
U.S. Postal Inspection Service Photo Credit: USPIS.GOV

The owners of a North Jersey company altered hundreds of thousands of labels intended for envelopes and slapped them on large boxes, deliberately short-changing the government by more than $6 million in postage, federal authorities said following their arrests.

Jack Koch, 44, of Elmwood Park, and Steven Koch, 43, of Pompton Lakes, were scheduled for video-conferenced first appearances before a federal magistrate judge Tuesday afternoon in Newark, U.S. Attorney Craig Carpenito said.

The elder Koch, who went by the name “Ismail Yilmaz,” and his brother, who used the alias “Selim Memis,” owned a high-volume e-commerce seller on Amazon known as Fresh N Clear, Carpenito said.

From this January until September, he said, the company bought 240,471 USPS Priority Mail postage labels, “almost all for flat rate envelopes,” then “altered those labels to send their merchandise in larger boxes at discounted rates.”

They “were able to perpetrate the fraud by removing the required USPS visual endorsement ‘FLAT RATE ENV’ from the postage label,” the U.S. attorney said.

The US Postal Service “requires the visual endorsement ‘FLAT RATE ENV’ to appear on all mail pieces sent using the ‘Flat Rate Envelope’ discounted rate,” he said.

This allows postal employees to “determine whether the appropriate postage was, in fact, paid, and that each mail piece sent using that discounted rate does, in fact, weigh 70 pounds or less and fit into the special USPS compact envelope,” Carpenito said.

The Koches "altered the postage labels in order to send large household items that would not ordinarily fit into a Flat Rate Envelope (such as cases of bottled water, laundry detergent, and cases of soda) at the discounted flat rate,” the U.S. attorney said.

By doing so, he said, they cost the U.S. Postal Service more than $6 million in revenue.

Carpenito credited inspectors of the U.S. Postal Inspection Service for making it a priority case now being handled in the courts by Assistant U.S. Attorney Perry Farhat of his Government Fraud Unit in Newark

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