Trucking Company Vice President Pleads Guilty to Orchestrating United States Postal Service Contract Fraud
Ariana Farjado Orshan, U.S. Attorney for the Southern District of Florida, and Steven Stuller, Deputy Special Agent in Charge, U.S. Postal Service Office of Inspector General (USPS OIG) announced that Alexei Rivero, 46, of Miami, Florida, pled guilty yesterday before U.S. District Judge Darrin P. Gayles, to a two-count wire fraud indictment, in violation of Title 18, United States Code, Section 1343 (Case No. 18-CR-20452). Sentencing has been scheduled for August 23, 2019. At sentencing Rivero faces a maximum possible statutory sentence of up to 20 years in prison.
According to documents filed with the court and statements made during the plea, Rivero was the vice president of Florida Carrier & Brokerage Service Inc. (“Florida Carriers”), a licensed and bonded freight trucking company in Miami, Florida. Between March 2011 and September 2013, Florida Carrier was the supplier on twenty-two Highway Contract Route agreements with the U.S. Postal Service. A Highway Contract Route is a route of travel serviced by a postal contractor to move bulk mail over highways between designated postal facilities. Rivero dealt with the U.S. Postal Service to facilitate these contracts. The bids included costs to be paid to drivers hired to service the contracts. These costs include fringe benefits, as well as estimated payroll taxes for social security, workers compensation, federal unemployment compensation and state unemployment compensation.
The terms and conditions of the highway contract route contracts also incorporated the McNamara-O’Hara Service Contract Act (“SCA”). The SCA covers contracts and bid specifications in excess of $2,500, entered into by federal agencies, the principal purpose of which is to furnish services through the use of service employees. The SCA provides covered service workers the right to receive from federal contractors no less than the wage rates and fringe benefits found prevailing in the locality, as provided in wage determinations issued by the Department of Labor.
According to the court record, to facilitate the contract fraud Florida Carrier did not pay, on behalf of its drivers, the contracted costs for payroll taxes. In addition, they did not provide fringe benefits to drivers, as represented to the U.S. Postal Service. In addition, contrary to the U.S. Postal Service requirements, Florida Carriers had not hired some of these drivers as employees, but instead as independent contractors. Florida Carrier provided it drivers with Forms 1099 rather than Forms W-2.
“Yesterday’s guilty plea reflects the importance and impact of our continuing efforts to protect the rights of workers hired to perform services under government contracts,” said U.S. Attorney Arian Fajardo Orshan. “Companies that profit from doing business with federal agencies have a duty to provide workers with fringe benefits and pay the requisite tax obligations. Those who engage in deceptive and fraudulent behavior fueled by greed will continue to be investigated and prosecuted in a federal court of law.”
“We are gratified to have contributed to this investigation and applaud the exceptional work by the United States Attorney’s Office for both protecting the contracting process and overall program costs,” said Steven Stuller, Deputy Special Agent in Charge, USPS OIG. “Along with our law enforcement partners, the USPS OIG will continue to aggressively investigate those who would engage in fraudulent activities designed to defraud the Postal Service.”
U.S. Attorney Fajardo Orshan commended the investigative efforts of USPS OIG. This case is being prosecuted by Assistant U.S. Attorney Lois Foster-Steers.