Canada Post alleges $449K package label fraud in B.C. lawsuit

Canada Post is alleging a B.C. energy drink company operator defrauded it of $449,439 through manipulating prepaid postal labels.

“Canada Post is entitled to the return of the evaded postage, or items and proceeds traceable to it which were acquired through business transactions using the manipulated return labels,” the corporation said in a Jan. 3 B.C. Supreme Court notice of civil claim.

Canada Post alleged Jackson Lam operated an energy drink business under the name Prime Hydration Co. and through primehydrationco.ca (the website appears to be out of service). It alleged the business address was a UPS store in Burnaby.

The claim said Lam had a Canada Post Small Business Solutions account under the name TROUBLEMAKERZ.

The claim alleges Lam began a scheme in August 2022 to manipulate post office shipping labels from various retail clients including Bell Canada, COGECO, Eastlink and Shaw Communications – called the merchants in the claim.

The claim said customers could enter their outgoing shipping address on the merchants’ websites and receive labels to return products to those merchants. Canada Post then invoiced the merchants for those upon the dispatching of the packages bearing such labels.

The claim alleges Lam obtained 11,328 such labels between August 2022 and April 2023.

It further said that Lam, through the TROUBLEMAKERZ account, then manipulated the labels to replace addresses with those corresponding to Prime Hydration.

The claim said Canada Post received complaints for Bell Canada in January 2023 about labels issued in its name for purported returns that never arrived.

Soon after, postal inspectors noted large quantities of packages bearing return labels identified with the TROUBLEMAKERZ account, the claim said.

The complaints continued between January 2023 and April 2024 with packages dropped off at Burnaby and Richmond postal outlets.

On April 26, 2023, a Canada Post security adviser was notified of 13 parcels bearing Shaw-issued return labels. When scanned, it was found the packages were bound for Prime Hydration customers, the claim said.

A Canada Post search into the sender’s website revealed the UPS store location and Lam’s contact information.

After a criminal investigation, the claim said, the RCMP gave Canada Post a spreadsheet of return labels used by Prime Hydration based on data taken from Lam’s computer, the claim said.

On reviewing that data, Canada Post security staff identified the 11,328 altered labels valued at $449,439, the claim said.

Canada Post is seeking a court declaration that Lam defrauded it of the funds or another amount assessed at trial, and that it be able to take action to find the proceeds of the alleged fraud.

“Canada Post is entitled in law or in equity to trace and recover all of the proceeds of the fraudulent label scheme, or assets or monies derived from and traceable to the proceeds fraudulent label scheme,” the claim said.

Glacier Media could not locate Lam for comment.

None of the allegations has ben proven in court.