Oregon Contractor Pleads Guilty in USPS Kickback Scheme

A contractor from Oregon has pleaded guilty to conspiring to commit an offense against the United States by paying more than $465,000 in illegal kickbacks related to U. S. Postal Service (USPS) facilities repair contracts.

Ilya Zagaryuk, 40, of Damascus, Oregon, admitted to the charges in the U. S. District Court for the Eastern District of California.

According to the Justice Department, Zagaryuk owned a company that contracted and subcontracted to perform repair services on dozens of USPS facilities across Oregon, Idaho, Wyoming, Montana, and Washington. From May 2022 to February 2024, Zagaryuk paid his co-conspirator, an employee of a prime contractor on USPS projects, over $465,000 in kickbacks. These payments were made as a reward for directing additional work to Zagaryuk's company.

The co-conspirators allegedly inflated contracting documents, including estimates and invoices, to build in funds for the kickbacks that were not based on legitimate repair work costs. This scheme allowed them to pocket the extra funds at the expense of the USPS.

Zagaryuk faces a maximum penalty of five years in prison and a fine of up to $250,000. He has also agreed to pay restitution of $465,347. 75 to the USPS, which he will be jointly and severally liable for with his co-defendants.

The actual sentence will be determined by a federal district court judge after considering the U. S. Sentencing Guidelines and other statutory factors.

The U. S. Postal Service Office of Inspector General and the FBI Sacramento Field Office are investigating the case.

The prosecution is being handled by Assistant Chiefs Christopher Carlberg and Jeremy Goldstein, Trial Attorney Anne Veldhuis for the Antitrust Division’s San Francisco Office, and Assistant U. S. Attorney Dhruv Sharma for the U.

S. Attorney’s Office for the Eastern District of California.

The case is part of a broader effort by the Justice Department to combat procurement fraud. In November 2019, the department established the Procurement Collusion Strike Force (PCSF) to address antitrust crimes and related fraudulent schemes that impact government procurement and funding at all levels. The PCSF encourages whistleblowers to report information about antitrust and related offenses, offering potential rewards for original information that leads to criminal fines or recoveries of at least $1 million.

Associate Attorney General Stanley E. Woodward Jr. emphasized the importance of prosecuting those who cheat the government out of fair prices, stating that such collusion harms the USPS and ultimately the American taxpayer.

Acting Deputy Assistant Attorney General for Criminal Enforcement Daniel W. Glad highlighted the threat to public confidence posed by criminals who build kickbacks into government contracts.

U.S. Attorney Eric Grant for the Eastern District of California reiterated the commitment to uncovering procurement fraud and ensuring that public money is spent honestly and lawfully. Executive Special Agent in Charge Kevin Cloninger of the USPS Office of Inspector General affirmed the agency's dedication to aggressively investigating companies that defraud the USPS contracting process.