Two post office executives in Tokyo were involved in a scheme of stealing a large volume of uncanceled sheets of stamps used for bulk mail and selling them to discount ticket shops and pocketing 540 million yen ($5 million) in cash.

Although those sheets must be canceled and trashed, the executives apparently took advantage of slipshod handling of the stamps, which escaped being postmarked.

Japan Post Co. of the Japan Post Group fired the two executives last year but didn’t publicly disclose the thefts, which occurred at the Shiba and Kanda post offices in Tokyo.

The stamp sheets sold to the shops have not been recovered and were apparently sold by the shops and put into circulation.

The scandal apparently drove Japan Post to end its paying for bulk mail through the use of large sheets of stamps.

In an interview with The Asahi Shimbun, one of the two fired executives admitted that he believes that there are other employees who have committed similar thefts.

The executives took advantage of the bulk mail system. Instead of having to put stamps on each envelope and postcard, customers paid by cash or large sheets of stamps, equivalent to the postal fees.

Those sheets of stamps are brought to post offices when customers, typically businesses, send a large amount of mail all at once, and are provided with a discount.

Under company rules, the stamps must be postmarked after they are used. Then, they are required to be shredded at the post office's general affairs division.

According to sources, there were instances when stamp sheets were brought to post offices, staffers in the mail division thought “those are to be shredded anyway” so they didn't bother to postmark them. Then they took them to the general affairs division for disposal.

SHIBA POST OFFICE, KANDA POST OFFICE

A man in his 40s who was chief of the general affairs division in the Shiba Post Office in Tokyo’s Minato Ward stole those uncanceled stamp sheets and converted the stamps into cash from discount ticket shops. The total amounted to about 140 million yen for three years between fiscal 2014 and fiscal 2016.

At that time, the man was responsible for oversight of shredding the stamps.

As there was no monitoring of the shredding process, the executive was able to steal them.

Moreover, a man in his 50s who was deputy manager of the mail division at Kanda Post Office in Tokyo’s Chiyoda Ward, also took sheets of uncanceled stamps before they were sent to the general affairs division. The amount totaled about 400 million yen between fiscal 2014 and fiscal 2016.

TAX BUREAU DISCOVERS THEFT

The Shiba Post Office theft case was discovered in March 2018 during an investigation by the Tokyo Regional Taxation Bureau of Japan Post.

Japan Post launched an in-house investigation and also discovered the Kanda Post Office theft, which was also discovered by the bureau’s tax investigation.

The two executives returned the full amount they were paid by the ticket shops to Japan Post before they were terminated and escaped prosecution.

The tax bureau decided that the 540 million yen in total should be reported as Japan Post corporate income.

The bureau apparently also told Japan Post it failed to report income of almost the same amount for the three years until March 2017 (fiscal 2016).

Japan Post announced in June 2018 that it would completely abolish paying for bulk mail using large sheets of stamps from January 2019.

Cash payments are still allowed for bulk mail.

Several sources said, “This measure was in response to the wrongdoings by the Shiba and Kanda post offices.”

However, Japan Post itself has not publicly disclosed the theft cases.

An official of Japan Post’s public relation office said, “It is true that improper treatment of stamps occurred in the Shiba Post Office.”

Regarding the Kanda Post Office case, the official declined to comment on the matter, saying, “I have no idea about it.”

As for the undeclared income that was pointed out by the tax bureau, the official said, “We dealt with the tax in a proper way.”

SCANDAL HAD MAJOR IMPACT

As for ending the payment by sheets of stamps, Japan Post only emphasized it was making mail processing more efficient.

However, a Japan Post executive said, “The fraud forced the system to be completely abolished. That scandal had such a major impact.”

The executive added angrily, “Even if the money was returned, theft is theft.

“I can’t believe that Japan Post doesn’t disclose the fraud involving such a huge amount of money. They tried to hide it although it might only be the tip of the iceberg.”

In an interview with The Asahi Shimbun, the fired Shiba Post Office executive agreed that others in the post office are committing similar acts.

“I just kept it (the money)," he said. "But I think there are definitely other people who are doing the same thing for fun and for other reasons.”

(This article was written by Yuta Hanano and Ryota Kyuki.)