Postal inspector in lottery scam unit admits role in $330K theft

A former federal agent whose job was to investigate lottery scams targeting seniors has agreed to plead guilty after prosecutors accused him of stealing more than $330,000 in cash from the very victims he was supposed to protect. The alleged scheme lasted for years and involved nearly 2,000 intercepted packages, according to court records.

Scamming the people he's supposed to be protecting

Scott Kelley, 52, of Pembroke, Massachusetts, is a former U.S. Postal Inspector at the Boston Division headquarters of the U.S. Postal Inspection Service, the law enforcement arm of the Postal Service. He was a federal law enforcement officer who was authorized to carry a firearm, make arrests, and execute search warrants.

In 2015, Kelley became the Team Leader of the Mail Fraud Unit, which is responsible for investigating lottery and other scams that targeted senior citizens and other vulnerable populations.

According to court records, Kelley allegedly used deceptive emails to trick postal employees into redirecting packages that a U.S. Postal Inspection Service algorithm had identified as likely coming from scam victims. Kelley allegedly did this between January 2019 and August 11, 2023.

According to prosecutors, Kelley requested that about 1,950 packages be intercepted and sent to him. Once Kelley received the packages, he allegedly opened the ones that appeared or felt like they contained cash and stole the money inside. He laundered the cash and then failed to report it to the Internal Revenue Service.

Seven victims identified

According to the indictment, authorities were able to identify seven victims who were scammed into mailing cash in boxes that Kelley allegedly intercepted and opened. In total, Kelley allegedly stole over $330,000 in cash from the boxes mailed out by these elderly victims.

Officials say the average age of the victims was 75, with the oldest victim being 82. These victims mailed between $1,400 and $19,100 cash in the boxes. One of the victims has passed away after Kelley was indicted.

According to authorities, Kelley allegedly used the stolen cash to pay for a pool patio, a granite countertop for his outdoor bar, lighting for his pool and bar, expenses for a Caribbean cruise, and escorts.

Guilty plea entered

Kelley has now agreed to plead guilty to 44 counts of a 45-count indictment returned by a federal grand jury in Boston.

Specifically, Kelley has agreed to plead guilty to:

• Five counts of wire fraud.
• Five counts of mail fraud.
• Five counts of mail theft by a postal officer.
• 23 counts of money laundering.
• One count of structuring to evade reporting requirements.
• Five counts of filing false tax returns.

For these charges, Kelley faces the following possible sentences:

• Wire fraud – Up to 20 years in prison, up to three years of supervised release, and a fine of up to $250,000 for each charge.
• Mail fraud – Up to 20 years in prison, up to three years of supervised release, and a fine of up to $250,000 for each charge.
• Theft by a postal officer – Up to 10 years in prison, up to three years of supervised release, and a fine of up to $250,000 for each charge.
• Money laundering – Up to 20 years in prison, up to three years of supervised release, and a fine of up to $500,000, or twice the value of the property involved in the transaction, for each charge.
• Structuring to evade reporting requirements – Up to five years in prison, up to one year of supervised release, and a fine of up to $250,000.
• Filing false tax returns – Up to three years in prison, up to one year of supervised release, and a fine of up to $100,000 for each charge.

Sentences will be imposed by a federal district court judge based upon the U.S. Sentencing Guidelines.

Enjoy playing the lottery, and please remember to play responsibly.