SACRAMENTO, California — A contractor pleaded guilty on Tuesday, October 27, in federal court in Sacramento to conspiring to commit an offence against the United States by paying more than $465,000 in kickbacks on U.S. Postal Service facilities repair contracts, the U.S. Attorney's Office for the Eastern District of California announced.
Source: U.S. Attorney's Office, Eastern District of California, Oct 27, 2026
The defendant is Ilya Zagaryuk, 40, of Damascus, Oregon. According to the Justice Department, Zagaryuk owned a company that contracted and subcontracted to perform facilities repairs on dozens of U.S. Postal Service facilities in five states: Oregon, Idaho, Wyoming, Montana and Washington.
Source: U.S. Attorney's Office, Eastern District of California, Oct 27, 2026
According to documents filed in the U.S. District Court for the Eastern District of California in Sacramento, from May 2022 to February 2024 Zagaryuk paid his co-conspirator — an employee of a prime contractor on Postal Service projects — more than $465,000 in illegal kickbacks as a reward for the co-conspirator directing additional work to Zagaryuk and his company.
Source: U.S. Attorney's Office, Eastern District of California, Oct 27, 2026
How the scheme worked, according to court documents
The co-conspirators intentionally inflated contracting documents, including estimates and invoices, to build in funds for the kickbacks that were not based on legitimate repair work costs, the Justice Department said. In other words, the paperwork itself was padded so the kickback money was hidden inside the price the Postal Service paid.
Source: U.S. Attorney's Office, Eastern District of California, Oct 27, 2026
MLex, reporting the Justice Department statement the same day, summarised the plea the same way: Zagaryuk pleaded guilty to one count connected to a kickback scheme that inflated maintenance contracts with the Postal Service, with over $465,000 paid to the co-conspirator. The two accounts agree on the defendant, the amount, the period and the inflated-documents method.
Source: MLex, DOJ statement summary, Oct 27, 2026
U.S. Attorney Eric Grant: 'Schemes like this drain public resources and undermine confidence in how federal funds are managed.' Associate Attorney General Stanley E. Woodward Jr.: 'Collusion that harms the U.S. Postal Service, and ultimately the American taxpayer, is illegal and will not be tolerated.' USPS Inspector General Executive Special Agent in Charge Kevin Cloninger said the plea shows investigators will pursue contractors that defraud the government.
Who investigated and who is prosecuting
The case was investigated by the U.S. Postal Service Office of Inspector General and the FBI Sacramento Field Office. It is being prosecuted by Assistant Chiefs Christopher Carlberg and Jeremy Goldstein and Trial Attorney Anne Veldhuis of the Antitrust Division's San Francisco Office, and Assistant U.S. Attorney Dhruv Sharma for the Eastern District of California. Daniel W. Glad, Acting Deputy Assistant Attorney General for Criminal Enforcement, said the pair 'conspired to inflate subcontracts to build in a split between themselves' and did so 'countless times'.
Source: U.S. Attorney's Office, Eastern District of California, Oct 27, 2026
Background: a national strike force against procurement collusion
The Justice Department created the Procurement Collusion Strike Force (PCSF) in November 2019 as a joint law-enforcement effort against antitrust crimes and related fraud affecting government procurement, grants and programme funding at federal, state and local level. The department says whistleblowers who voluntarily report original information about antitrust offences that result in criminal fines or other recoveries of at least $1 million may be eligible for a reward under its Antitrust Whistleblower Rewards Program.
Source: U.S. Attorney's Office, Eastern District of California, Oct 27, 2026
Why this matters beyond Sacramento
Postal facilities are part of daily life in every town — including the California, Oregon and Washington communities where many Punjabi families run trucking, repair and small contracting businesses and compete for public work honestly. A scheme that pads estimates and invoices raises the price taxpayers pay and disadvantages honest bidders who price real work. The guilty plea is a conviction on Zagaryuk's own admission in court; the release does not name the co-conspirator in the passages announcing the plea, and this report does not name anyone the Justice Department did not name.
What happens next
Zagaryuk pleaded guilty to conspiracy to commit an offence against the United States, specifically a conspiracy to pay kickbacks. He faces a maximum of five years in prison and a fine of up to $250,000, and agreed to pay $465,347 in restitution to the Postal Service, jointly and severally liable with co-defendants. The actual sentence will be determined by the court after considering statutory factors and the federal Sentencing Guidelines. No sentencing date was given in the October 27 announcement.
Source: U.S. Attorney's Office, Eastern District of California, Oct 27, 2026