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Jack Koch, 44, of Elmwood Park, and Steven Koch, 43, of Pompton Lakes, owned Fresh N Clear, a high-volume business that sold various household items online that were shipped o customers via the Postal Service, federal authorities said.
Over the course of several months in 2020, the company bought 240,471 USPS Priority Mail postage labels, “almost all for flat rate envelopes,” U.S. Attorney Philip R. Sellinger said.
The older Koch, who went by the name “Ismail Yilmaz,” and his brother, who used the alias “Selim Memis,” then “altered those labels to send their merchandise in larger boxes at discounted rates,” he said.
They perpetuated 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,” Sellinger noted.
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,” he 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 $3 million in revenue.
Rather than face trial, the brothers each pleaded guilty to mail fraud Monday in federal court in Newark.
U.S. District Judge William J. Martini scheduled their sentencings for July 19, 2022
Sellinger credited inspectors of the U.S. Postal Inspection Service’s Newark Division with the investigation leading to the pleas, secured by Assistant U.S. Attorneys Perry Farhat and Katherine Romano of his Government Fraud Unit in Newark.
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