Contractor Pleads Guilty to Paying Kickbacks Related to U.S. Postal Service Facilities Repair Contracts

A contractor pleaded guilty to conspiring to commit an offense against the United States by paying over $465,000 in kickbacks. 

The defendant, Ilya Zagaryuk, 40, of Damascus, Oregon, owned a company that contracted and subcontracted to perform facilities repairs on dozens of U.S. Postal Service facilities in Oregon, Idaho, Wyoming, Montana, and Washington. 

According to documents filed in the U.S. District Court for the Eastern District of California in Sacramento, California, from May 2022 to February 2024, Zagaryuk paid his co-conspirator, who was an employee of a prime contractor on U.S. Postal Service projects, over $465,000 in illegal kickbacks as a reward for the co-conspirator directing additional work to Zagaryuk and his company. The co-conspirators intentionally inflated contracting documents, including estimates and invoices, to build in funds for the kickbacks that were not based on legitimate repair work costs.

“Collusion that harms the U.S. Postal Service, and ultimately the American taxpayer, is illegal and will not be tolerated,” said Associate Attorney General Stanley E. Woodward Jr. “This Department of Justice is committed to prosecuting those who would cheat the U.S. government out of fair prices to line their own pockets, and in this prosecution, we have done just that.”

“Zagaryuk and his co-conspirator conspired to inflate subcontracts to build in a split between themselves,” said Acting Deputy Assistant Attorney General for Criminal Enforcement Daniel W. Glad of the Justice Department’s Antitrust Division. “They did this countless times and cheated the U.S. Postal Service out of honest contracting and invoicing. Criminals who build kickbacks into government contracts threaten the public’s confidence in government institutions and will be held accountable.”