USPS uses data analytics to keep fraud in check

With about 600,000 employees and more than 150 million delivery points, the U.S. Postal Service is vulnerable to internal fraud and theft. As a result, the agency is turning toward data and data analytics more than ever before.

Mark Pappaioanou, a deputy special agent in charge and the Chief Data Officer in the USPS Inspector General’s Office, said data analytics can help identify patterns of bad acts. It comes in handy when the OIG is undertaking its roughly 4,000 investigations and 150 audits per year.

“The Postal Service delivers more than 5 billion parcels a year to 157 million delivery points. That’s more than 14 million parcels a day,” he said as part of Federal Monthly Insights: Data and Analytics Month. “So the data that the postal service uses to manage this network can also be leveraged for our various investigative purposes, either narcotics investigations or mail theft investigations. Or they assist in audits to help drive to efficiencies or other recommendations.”

Before joining the OIG, Pappaioanou was a USPS special agent in Houston working on mail theft and narcotics investigations. Most of his work concerned health care providers and workers compensation programs. Over time, he developed a subject matter expertise in workers compensation and health care provider fraud, picking up on the signs of illicit behavior, and he moved to the OIG to oversee other experts.

“We have a really interesting set up here at the Postal OIG,” he said on Federal Drive with Tom Temin. “We decided that a multidisciplinary approach is by far the best so what we do is we have subject matter experts from either our office of investigations or our office of audit. They’re integrated into a team of investigative analysts and then computer scientists that work on a specific functional area.”

Most of the data is related to pick-up and delivery addresses, weight, the type of mail used. The subject matter experts can ask what specific questions or occurrences to look for in the data.

With audits, Pappaioanou said his office has used data analytics to make recommendations to USPS to prevent future problems, such as when they found criminal activities among a number of postal facilities that, rather miraculously, would always have perfect financial counts.

“We’re leveraging our data to help build a tool that will help us identify suspicious employees who may be assisting in drug trafficking,” he said. “We analyze the Postal Service data and look for various indicators to help us focus on specific employees or routes where those suspicious parcels are being either delivered or disappearing.”

Direction from Capitol Hill is motivating USPS to study the role it may be playing in narcotics trafficking and the opioid crisis. To do so, Pappaioanou said they are using some off-the-shelf software as well as custom-made in-house tools.

“We have a number of computer scientists on each team who have the ability to write code that can help us create kind of customized work that we use, depending on what the business question is that we’re looking for or into,” he said.

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