Inspection Service Revenue Protection Program1|

Revenue Protection ProgramUS Postal Inspection Service

Mailers Technical Advisory CommitteeNovember 19, 2008

Inspection Service Revenue Protection Program2|

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 AreasBy-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

Inspection Service Revenue Protection Program8|

Move Update Case HistoryCase 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