Two NJ Amazon sellers charged with $6 million U.S. Postal Service scam

Nicholas Katzban
NorthJersey.com

A pair of business partners who sold home goods through Amazon face federal charges in a scam that cost the United States Postal Service $6 million in reduced shipping fees, U.S. attorneys allege. 

Jack and Steven Koch used flat-rate shipping labels, which they doctored to fit on oversized packages of goods the two sold through Amazon, according to a statement released Tuesday by U.S. Attorney Craig Carpenito.

Operating as Fresh N Clear LLC out of Wood-Ridge, the Kochs ordered flat-rate labels from USPS, which are intended for items that weigh less than 70 pounds and can fit inside specifically sized envelopes printed by the Postal Service, attorneys said.

After removing the phrase "FLAT RATE ENV" from the specially priced labels, the Kochs, or their employees, would place those altered labels on packages of household goods, such as cases of soda or laundry detergent, which could never fit inside a flat rate envelope, attorneys said.

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Postal workers became suspicious of Fresh N Clear in February when they noticed the flat-rate endorsement missing from a package mailed for $7.15 that should have cost $98.38, if priced by weight and shipping distance, according to a copy of the federal complaint.

U.S. Postal Inspector Patrick Boyle said the Kochs had been successful in running the scam since 2018.

Of the 225 packages prepared for shipment that officers discovered in the Fresh N Clear warehouse during a September raid, 223 are believed to have featured fraudulent labels.

The Kochs appeared before a federal judge Tuesday on charges of stealing government funds and postage stamp fraud and could face up to five years in prison, if convicted.

Nicholas Katzban is a breaking news reporter for NorthJersey.com. For unlimited access to all the major news happening in North Jersey, subscribe here. To get breaking news directly to your inbox, sign up for our newsletter.

Email: katzban@northjersey.com 

Twitter: @nicholaskatzban