Vendor pleads guilty in bribery, kickback scheme with postmaster

A Connecticut vendor pleaded guilty Wednesday in a bribery and kickback scheme involving the Danbury postmaster that cost the U.S. Postal Service over $800,000, federal officials said.

Michael D. Lutz, 26, of Seymour pleaded guilty to conspiracy to commit honest services wire before U.S. District Judge Stefan R. Underhill in Bridgeport, according to the U.S. Attorney’s office.

According to court records, Ephrem D. Nguyen was the postmaster of the Danbury Post Office with responsibilities that included “supervising the maintenance and repair of all equipment, facilities and vehicles assigned to the post office.” Lutz was the general manager for a company, identified as “Vendor-1” in court documents, which provided vehicle maintenance and repair services for the Danbury Post Office.

In November 2020 Nguyen reportedly required that all vehicle maintenance and repair work be performed by Vendor-1, even though he knew another vendor already had a contract with the Danbury Post Office, court records showed. Nguyen then reportedly demanded that Vendor-1 provide free vehicle maintenance and repairs for himself, one of his children, a U.S. Postal Service employee and an employee of Nguyen’s personal business.

In 2022 Nguyen reportedly solicited and received $90,000 from Lutz in cash bribes, which Lutz paid from Vendor-1’s proceeds, according to court records. In exchange for the bribes Nguyen authorized USPS funds to overpay Vendor-1 for vehicle maintenance and repairs, which he characterized as a “raise.”

“Between approximately January 2022 and February 2023, Nguyen used USPS credit cards to pay Vendor-1 approximately $1.1 million, approximately $260,000 of which was for legitimate maintenance and repair work,” federal officials said.

According to court records, the USPS lost approximately $843,271.32 though the scheme Nguyen between Lutz.

Lutz is released on bond pending his sentencing, which is scheduled for May 16. The charge carries a maximum term of 20 years in prison, the U.S. Attorney’s office said.

On Oct. 13, 2023, Nguyen pleaded guilty to one count of honest services wire fraud. He also admitted that he “embezzled more than $80,000 from the USPS by using his USPS credit cards to rent vehicles for the personal use of himself and others, and that he approved more than $8,000 in fraudulent travel expense reimbursement claims for a co-worker,” according to the U.S. Attorney’s office.

Nguyen is currently released on a $100,000 bond and living in Massachusetts as he awaits sentencing, the U.S. Attorney’s office said.