Attorney General Bonta Announces 72 Felony Convictions in Organized Criminal Postal Theft and Bank Fraud Scheme

OAKLAND - California Attorney General Rob Bonta today announced the felony convictions of 72 individuals involved in a widespread mail theft and postal fraud operation that resulted in the theft of nearly $6 million from hundreds of people. The defendants - who operated out of multiple counties across California, including Los Angeles County and San Bernardino County - allegedly altered stolen checks, deposited them into bank accounts, then quickly withdrew money from ATMs before the banks discovered the checks were forged. Following a complex multi-jurisdictional investigation - led by the United States Postal Investigation Services Mail Theft/Violent Crimes Team, with assistance from the California Department of Justice's E-Crimes Unit, and local law enforcement - the defendants were indicted by a grand jury on charges of conspiracy to commit grand theft by false pretenses, forgery, and grand theft, with an aggravated white collar crime allegation. Of the 72 defendants who obtained felony convictions, 25 pled to prison sentences. Depending on the level of culpability and other sentencing factors, sentences range from between 16 months to eight years in prison.

"The California Department of Justice will not stand idly by when Californians are victimized by organized criminal fraud: Today's announcement of 72 felony convictions is proof that we will hold fraudsters accountable," said Attorney General Bonta. "I am thankful to our local and federal law enforcement partners for their work in this investigation. The California Department of Justice will continue to use every tool in our toolbox to tackle organized crime and fraud."

The scheme was carried out by an organized criminal enterprise, and postal employees were recruited to assist with stealing checks from the mail. The suspects allegedly began the postal fraud and check washing operation in 2018 and used hundreds of accounts at major banking institutions to carry out their crimes, which victimized more than 750 Californians. Investigators believe the stolen money was used to fund other criminal operations.

As part of the scheme, stolen and altered checks were deposited through bank accounts, and defendants withdrew the money before the bank discovered the checks were altered. Individuals were recruited to "sell" their bank accounts for use in the scheme to earn quick money. Some defendants participated in the theft of mail and the "washing" of checks. A check is washed by using solvent to erase the payee section of the check. A forger would wash the check and replace the payee with the name of another conspirator. The "new" payee would open a bank account for the purposes of the fraud. The check would be deposited in the account, and since the check was real and written off of a real account it would clear. In many instances the conspirators were able to withdraw thousands of dollars from a single account. When the fraud was discovered, the known fraud accounts were closed.

California Department of Justice's Special Prosecution Section prosecuted this case. The prosecution is the culmination of a years-long investigation by the U.S. Postal Inspection Service, with assistance from 34 teams from local, state and federal agencies. The bulk of the arrests were made during an enforcement sweep across the counties of Los Angeles and San Bernardino. Operation "Checks in the Mail" comprised 16 teams from the Los Angeles County Sheriff's Department and eight teams from the U.S. Postal Inspection Service, in addition to teams from the Los Angeles Police Department, Bakersfield Police Department, Hermosa Beach Police Department, Homeland Security Investigations, U.S. Marshals, California State Parole Agents, Los Angeles County Probation, Long Beach Police Department, and the Los Angeles Department of Children and Family Services.