Recently, the U.S. Department of Justice obtained a temporary restraining order prohibiting two Chinese logistics companies and their executives from using the United States Postal Service (USPS) to ship parcels. The department accused them of colluding with Chinese sellers to send a large volume of international packages with counterfeit postage labels, exploiting the USPS system and causing significant economic losses.
Counterfeit postage labels are altered, copied, or forged barcodes and labels that deceive the postal system into believing that postage has been paid, thus evading shipping fees. This scam is common in cross-border e-commerce logistics and has resulted in significant financial losses for the USPS. A similar case was reported by our newspaper in 2019, where a Chinese proxy shopper in Flushing exploited loopholes in an online postage platform to forge barcode payments, defrauding over $110,000 in postage and sending out over 13,000 packages in three years, illustrating that such tactics are not new.
The case was jointly announced by Joseph Nocella, the Eastern District of New York federal prosecutor, and Edward Gallashaw, acting head of the United States Postal Inspection Service (USPIS) on May 21. They identified the defendants as YDH Express, Inc. in Queens, New York, YDH Int’l Inc. in Los Angeles, and their co-operator Yizhao Hou (also known as Harvey Hou). The government alleges that they received numerous customer packages from China, affixed counterfeit postage labels, and shipped them through USPS across the United States, deceiving USPS for extended periods.
Last Thursday, a civil lawsuit was officially filed in the Eastern District of Brooklyn federal court by the federal government, invoking the Prohibition of False Claims Act and the False Claims Act to prohibit fraudulent activities and seek triple damages and civil fines. On May 16, a temporary restraining order was issued, banning the defendants from using USPS to send any packages.
Court documents revealed that since at least 2022, Hou and his companies, with one or more accomplices, have shipped thousands of packages with counterfeit labels on behalf of Chinese online sellers. Despite USPS flagging these labels as fake and refusing to deliver them at least eight times, with Hou and his employees signing termination agreements thrice pledging not to repeat the offense, the fraudulent activities persisted. The court found sufficient grounds to believe that the defendants’ illegal activities had not ceased and, if not promptly halted, could cause “irreparable harm” to USPS.
On August 10, 2022, USPIS inspectors and an analyst interviewed Hou at the YDH Express warehouse in New York. Hou claimed that YDH Express, operated solely as a logistics company, with labels printed by Chinese online sellers, handled transportation through customs brokers in Chicago and New York, and international wire transfers went to his bank account in New York.
While denying knowledge of label counterfeiting, Hou confirmed running two other related businesses, YDH Int’l Inc. in Los Angeles and Jupiter Warehouse Distribution Inc. He mentioned five to six Chinese customers using his eVS account to print postage labels. However, USPIS pointed out that these labels used deactivated MID codes, not matching legal labels for eVS accounts.
Subsequent investigations led to Hou signing another voluntary termination agreement, admitting to sending mail with “counterfeit labels causing USPS losses” and pledging to use only legal postage labels in the future. Nevertheless, he failed to provide the requested list of Chinese customers to USPIS.
In September 2022, the U.S. Department of Justice issued a Civil Investigative Demand (CID) to Hou, requesting YDH’s relevant business documents. His lawyer responded that YDH only provided customs clearance and transportation services, claiming to have terminated cooperation with implicated customers in September. However, Hou’s provided customer list included only three individuals whose collaboration ended after October 31.
Between December 2022 and February 2023, USPIS revisited the YDH Express warehouse in New York thrice, confirming its clearance. However, on March 31, 2023, during a USPIS inspection of the YDH Int’l warehouse in Los Angeles, seven packages were found with counterfeit postage labels. Despite analyst verification, all seven labels were counterfeits, and warehouse staff acknowledged after being informed that the packages should not be sent to USPS.
On October 23, 2023, USPIS discovered 270 packages with counterfeit postage labels in New York, with CBP subsequently seizing 8,684 undelivered parcels. On April 3, 2024, USPIS found 170 packages with counterfeit labels at the YDH Express warehouse, while CBP detained 58 boxes still in transit.
CBP records revealed that from 2022 to date, YDH Express and YDH Int’l had received hundreds of shipping parcels, with over 100 in March 2025 alone. Despite YDH Int’l being a California registered company, some shipments were still sent to the YDH warehouse in New York, indicating continued involvement in illicit label distribution.
Although YDH Int’l abruptly closed its Los Angeles warehouse in 2025, CBP records showed ongoing parcel reception at major U.S. ports such as Los Angeles and New York. U.S. authorities believed that YDH’s actions were attempts to evade surveillance, yet evidence indicated that their fraudulent activities persisted, inflicting sustained damages on USPS.
Prosecutor Nocella emphasized, “Postal services provide essential services to the American public, and we will not tolerate overseas malefactors plundering USPS revenues with false postage stamps.” He expressed gratitude to USPIS and CBP for their investigative assistance. Gallashaw, the head of USPIS’s New York section, stated that “Hou appeared to be solely interested in profiteering, ignoring the losses suffered by USPS. We will utilize all resources to trace the origin of counterfeit stamps and continue protecting American trust in the postal system.”
Should the public become aware of any mail fraud, postage forgery, or misuse of the USPS system, they can contact the nationwide toll-free USPIS hotline at 877-876-2455 or report related crimes on the official website link http://uspis.gov/report.