Oregon Contractor Pleads Guilty to Paying $465,000 in Kickbacks for U.S. Postal Service Repair Work

Status: Guilty plea; sentencing pending. Zagaryuk has been convicted by his guilty plea. The co-conspirator is not named in the sources, and AFNS is not naming him.

The plea

Ilya Zagaryuk, 40, of Damascus, Oregon, pleaded guilty to conspiracy to pay kickbacks (DOJ).

• The payments: between May 2022 and February 2024, he paid $465,347.75 to a co-conspirator at a USPS prime contractor.
• What he got: the contractor steered more than 475 repair projects at postal facilities to his firm. The facilities are in Oregon, Idaho, Wyoming, Montana and Washington.
• How it was hidden: inflated estimates and invoices hid the payments.

Details from the plea agreement

The Oregonian reported these details from the plea agreement:

• A Portland job: Zagaryuk sent a $29,788 estimate for a Portland facility. The accomplice replied, "Put it at 34K and change, 5K will be comms." He then wrote, "Wife wanted a new car," with a photo of a Maserati.
• The phone: after Zagaryuk learned of the investigation in February 2024, the accomplice told him to "wipe" his phone. He didn't.

Penalties

• Prison and fine: he faces up to five years in prison and a $250,000 fine.
• Restitution: he agreed to pay $465,347.75 to USPS, jointly and severally with co-defendants.
• Custody: he is out of custody pending sentencing. No date had been set as of Oct. 27.

The investigation

The USPS Office of Inspector General and FBI Sacramento investigated the case. The DOJ Antitrust Division's Procurement Collusion Strike Force is prosecuting it, and court documents were filed in Sacramento.

Why it matters for Americans

The Postal Service's repair budget comes from postage and the public. Kickbacks inflate what it pays for that work.