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Financial Crimes
10/25/2012

Former Postal Service manager sentenced to more than 4 years on fraud and corruption charges

Defendant ordered to forfeit close to $6.5 million

OAKLAND, Calif. – A former Bay Area manager for the U.S. Postal Service (USPS) was sentenced Wednesday to 51 months in prison for wire fraud and conspiring to violate the federal conflict of interest statute by orchestrating a billing scheme involving a truck leasing company he operated with his wife.

Balvinder Singh Chadha, 45, of Union City, was also ordered to forfeit almost $6.5 million in restitution to the government. His wife and co-defendant, Jaspinder Kaur Chadha, was sentenced to three years' probation, including three months of home confinement.

The case is the result of a multi-year probe by the U.S. Postal Service Office of Inspector General's Major Fraud Investigations Division and U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).

Chadha, who pleaded guilty April 4, admitted that during the time he was employed as a manager of vehicle service operations at a USPS facility in Oakland he was also an investor in and de facto head of a company called Golden Pacific Logistics, Inc. (GPL) – established for the purpose of obtaining truck leasing contracts with the USPS unit Chadha managed.

"Our public servants occupy positions of trust. The integrity of our government requires them to consistently act in the public's interest and to never abuse that trust," said U.S. Attorney Melinda Haag. "Together with our partner agencies, my office will aggressively investigate and prosecute the small minority of public servants who violate the public's trust and exploit it for their own gain."

In July 2005, Chadha endorsed GPL during the procurement process for a USPS truck leasing contract that was ultimately awarded to GPL. Over the next four years, GPL billed USPS for trucks that were never leased, mileage that was never incurred, and servicing and maintenance costs that were never authorized under GPL's contract. Using his USPS position, Chadha authorized payments to GPL and requested at least 18 modifications to the original contract, which extended the length of the contract and increased the number of trucks authorized for leasing. All told, GPL billed and received close to $6.5 million, which included at least $4.4 million in fraudulent billing.

"As this sentence makes clear, there is a steep price to be paid when federal employees misuse their positions and violate the public's trust for their own personal gain," said Clark Settles, special agent in charge for HSI San Francisco. "The conduct exhibited by these defendants will not be tolerated and we will continue to work closely with our federal partners to investigate and bring to justice those who engage in such abuses."

Additionally, Chadha and his wife, who pleaded guilty March 28, admitted to conspiring to violate the federal conflict of interest statute, which prohibited Chadha, as a USPS employee, from participating in a contract in which he and his wife had a financial interest. The Chadhas admitted they engaged in a variety of measures to conceal Mr. Chadha's association with GPL and to create the appearance that Mr. Chadha and GPL had an arm's-length business relationship.

"The vast majority of postal employees would never think about abusing their positions for personal gain," said Joanne Yarbrough, special agent in charge for the U.S. Postal Service Office of Inspector General's Major Fraud Investigations Division.

Wednesday's sentence was handed down by U.S. District Court Judge Phyllis J. Hamilton. Balvinder Chadha, who remains free on bond, was ordered to self-surrender and begin serving his prison sentence Feb. 1, 2013. His wife was immediately placed on probation.