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Postal worker health fraud rises as mail volume falls

For seven years, postal worker Colette Lee collected nearly $250,000 in federal benefits after telling the government she was disabled as a result of a work-related injury.

What the Baltimore woman didn't disclose was a medical history that included injuries in four auto crashes that occurred before she claimed benefits under the Federal Employees Compensation Act.


Lee, 49, faces sentencing in U.S. District Court in Baltimore in February after pleading guilty last month to a single count of making a false statement to obtain those benefits. She could face a maximum sentence of five years.

"This case is an insult to taxpayers and honest government employees," said Maryland U.S. Attorney Rod J. Rosenstein.


Lee's scheme is part of a broader increase in health care fraud in the U.S. Postal Service, according to its inspector general, even as employment, the volume of mail and the number of new claims for benefits have dropped.

The Office of the Inspector General says its agents opened 693 cases in which health care fraud was alleged in fiscal year 2013 and 592 in fiscal 2012. The inspector general said those cases brought the Postal Service $51.9 million in medical and disability judgments and prevented $289.7 million in future losses.

In Lee's case, federal prosecutors showed that she withheld information about her medical condition from the time she was hired by the Postal Service in 2003. Not only did she conceal her history of injuries in crashes, but also that she had been in physical therapy and had undergone CT scans.

Lee first submitted a disability claim in 2007 and followed it up with three more over the next 21/2 years. Between 2007 and January 2014, she collected lost wages and other benefits from the government, she said in the plea agreement. Lee also admitted that she received food stamps illegally from 2010 to 2012 and failed to disclose that she was receiving those benefits.

Lee declined, through her public defender, to comment.

According to the agreement, Lee was interviewed by officials in 2012 about her claims of inability to work and denied having been injured before she began working for the Postal Service. She said at the time of the interview that she could not open her car door or steer with her right hand, that she needed breaks every 20 to 25 minutes, and that she couldn't shop without assistance or play with her son.

Lee was already under surveillance by agents of the inspector general. Between December 2010 and February 2014, agents say, they saw her shopping, playing and driving without breaks or help and with full use of her right hand.

As part of her agreement, Lee agreed she owes the government $245,000 for the illegally obtained benefits and food stamps.


The postal inspector general has reported similar cases across the United States.

A former letter carrier in Oregon was sentenced in January to five years' probation and ordered to pay $31,000 in restitution after investigators found she was running a day care center and maid service while receiving federal workers' compensation for injuries that supposedly prevented her from reaching, lifting and driving. Agents said they saw children being dropped off and picked up at her home and observed her driving on many occasions.

A California letter carrier who was receiving workers' compensation was found to be concealing his work and income as a certified massage therapist. He pleaded guilty in state court to insurance fraud and was sentenced to four days in the county jail and three years of probation. He was also ordered to pay more than $40,000 in restitution.

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Rosenstein said the Lee case is one of the tiny fraction of employee fraud cases investigated by the inspector that are referred for prosecution. He said the extent of the fraud and its duration make the case the most egregious he's seen.

Rosenstein said the Postal Service appears to have more disability fraud problems than other agencies. He attributed this to the size of the agency and the amount of physical labor and driving involved.

"The nature of the work lends itself more to disability claims," he said.


A spokesman for the National Association of Letter Carriers declined to comment.

Rosenstein said he has not seen evidence that such fraud is pervasive through the federal government. He said conduct such as Lee's does a disservice to federal workers.

"It certainly is an affront to them to have someone milking the system and making everybody else look bad," he said.