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United States Files Civil Complaint Against Internet-based Consumer Electronics Vendor Alleging Violations of the False Claims Act

FOR IMMEDIATE RELEASE
June 18, 2012

Defendants Allegedly Underpaid Postage on Mass Mailings

Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Ronald J. Verrochio, Inspector-in-Charge of the New York Office of the United States Postal Inspection Service, announced today the filing of a civil complaint in federal court in Brooklyn against Yall Inc., a Brooklyn-based Internet vendor of consumer electronics, and its principal, Hang Feng (“Nick”) Wu, for knowingly underpaying postage on massive amounts of mail, causing millions of dollars in losses to the United States Postal Service.

Yall does business through various websites, including Yallstore.com and the online auction and shopping website eBay.com. Yall sells accessories, peripherals and replacement parts such as batteries, protective cases, AC adapters, and cables for laptops, cell phones, digital cameras and handheld game consoles, among other popular electronics items.

The complaint alleges that the defendants shipped tens of thousands of underpaid mail pieces per week to consumers across the nation and around the world and that they knowingly failed to weigh the mail before presenting it to the Postal Service for mailing, while representing that their mail was paid in full.

“The defendants’ fraud was deceptively simple, yet reaped significant benefits over time,” said United States Attorney Lynch. “By consistently underpaying postage, while maintaining that they were meeting their obligation to pay proper postage, the defendants shorted the Postal Service of literally millions of dollars. Making false statements and failing to pay proper postage interferes with the Postal Service’s effort to deliver the mail and impairs its financial viability. In these difficult economic times, we will hold businesses and business owners accountable for underpaying postage and will ensure that the Postal Service is protected from abuse.”

“The Postal Inspection Service will not tolerate misuse of the mail system from those who seek to gain an unfair competitive advantage over others by not paying the required postage to the U.S. Postal Service,” said Postal Inspector-in-Charge Verrochio.

The claims in the United States’ complaint are allegations only; there has been no determination of liability. The United States’ case is being handled by Assistant United States Attorney Ameet B. Kabrawala.



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