HOUSTON â€“ Neal Lim, former owner of one of the largest mail presort operations in the Houston area has been sentenced to prison for conspiracy to commit mail fraud and possessing and using counterfeit postage meter machines to affix counterfeit postage in his mass mailing businesses, United States Attorney JosÃ© Angel Moreno and United States Postal Inspection Service Inspector-in-Charge Gary Barksdale announced today.
U.S. District Judge Nancy F. Atlas sentenced Lim, 50, to a total of 14 years imprisonment at a hearing this afternoon. Upon handing down the sentence, Judge Atlas commented, â€œin 16 years on the bench, this is the most extensive fraud I have seen outside of securities fraud.â€ She characterized Limâ€™s scheme as â€œsophisticatedâ€ and a â€œgross, massive fraudâ€ necessitating the involvement of experts to analyze.
â€œJudge Atlas’ sentence is commensurate with the egregious nature of Lim’s criminal scheme,” said Barksdale. “It should send a strong message of the consequences of defrauding the U.S. Postal Service.”
Indicted on June 17, 2010, Lim was convicted of all seven counts charged – conspiracy to commit mail fraud, two counts of mail fraud and four counts of possession of counterfeit postage meter machines â€“ arising from a scheme to possess and use counterfeit postage meter machines to apply postage in excess of amounts actually paid to the USPS following a five-day trial in February 2011. The sentence includes a 14-year-term of imprisonment on the conspiracy and each of the mail fraud convictions as well as the five-year statutory maximum term of imprisonment on each of the possession of counterfeit meter convictions. The court has ordered Lim to serve the sentences concurrently.
Lim owned three companies – Gulf Coast Presort Inc., located at 1005 Ennis Street in Houston, one of the largest presort business in Houston; Mail Processing Center Inc., 10835 Seaboard Loop in Houston; and a satellite office located at 5940 N. Sam Houston Parkway East, Suite 315 in Humble, Texas. Lim purchased Mail Processing Center Inc. in 1992 and Lim had been the owner of Gulf Coast Presort Inc. since November 2002. The satellite office was opened in 2005. These businesses operated as third-party mailers and/or pre-sort bureaus that make money by doing big mass mailings for clients and getting discounts from the post office for sorting the mail. Clients of Limâ€™s companies included county offices, financial institutions and other area businesses.
Through a statistical mail sampling process, the U.S. Postal Service (USPS) determined that the amount of mail observed being processed by the USPS for Limâ€™s companies exceeded the amount of pre-paid postage available on the postage meter machines licensed to Limâ€™s companies, resulting in millions of lost revenue to the U.S. Postal Service (USPS) over a four-year period. Profits from Limâ€™s scheme represents the largest counterfeit postage loss in the history of the U.S. Postal Service and the greatest breach of security features of postage meter machines.
Limâ€™s scheme, along with five other co-defendants, involved creating counterfeit postage meter machines to print counterfeit postage on mass mail processed by his presort companies. Illegitimately obtained meters were modified so they would produce counterfeit postage. The businesses collected postage from their mailing customers but didn’t pay the post office. In addition to profits from the counterfeit postage, Limâ€™s businesses collected additional money for postal refunds from the post office for having pre-sorted the illegally-metered mail.
Limâ€™s five co-defendants previously pleaded guilty to conspiring to commit mail fraud and are pending sentencing. Four of the co-defendants face a maximum penalty of five years imprisonment and fines of up to $250,000. Charges against one of the co-defendants were dismissed following his death. The four co-defendants have been permitted to remain on bond pending their sentencing hearings currently scheduled for July and August.
In addition to the prison term, Judge Atlas also imposed a three-year-term of supervised release to begin following his release from prison, a $700 special assessment and further ordered Lim to pay restitution to the USPS in the amount of $16 million.
The court has ordered Lim to surrender himself into the custody of the U.S. Marshals Service in two weeks to await transfer to a Bureau of Prisons facility to be designated in the near future.
This case, investigated by the United States Postal Inspection Service and was prosecuted by Special Assistant United States Attorney Tammie Y. Moore and Assistant United States Attorney Bertram A. Isaacs.