'Wife Wanted a New Car': Contractor Admits Paying $465,000 in Kickbacks on Postal Service Repair Jobs, Plea Deal Says Texts Show Padded Bids

An Oregon contractor has pleaded guilty to paying more than $465,000 in kickbacks to an employee of a Postal Service prime contractor in exchange for repair work at post offices and mail facilities in five states, the Justice Department said Tuesday.

Ilya Zagaryuk, 40, of Damascus, Oregon, pleaded guilty in federal court in Sacramento to one count of conspiracy to pay kickbacks. He faces up to five years in prison and agreed to pay $465,347.75 in restitution to the U.S. Postal Service, according to the department. A judge will decide his sentence.

The plea agreement, filed Oct. 27 in the U.S. District Court for the Eastern District of California, includes a signed factual basis that goes further than the department's announcement, quoting text messages that it says show how repair estimates were padded.

How the Postal Service Kickbacks Worked, According to the Plea

According to the factual basis, Zagaryuk's company, based in Milwaukie, Oregon, received subcontracts from a California construction company that held Postal Service prime contracts as a "Job Orders Contractor." An employee of that company, identified as "Co-Conspirator 1," told Zagaryuk he would steer more Postal Service work his way if Zagaryuk paid kickbacks, the document says.

On or around Feb. 2, 2023, Zagaryuk texted Co-Conspirator 1 a draft estimate of $29,788 to repair damaged walls and trim at a Postal Service facility in Portland, according to the document. The reply: "Put it at 34k and change, 5k will be comms." Co-Conspirator 1 then wrote, "Wife wanted a new car," and sent a picture of a Maserati sports car, the factual basis says. Zagaryuk understood "comms" to mean a commission, or kickback, of $5,000.

In another text, from November 2022, Co-Conspirator 1 wrote, "Railing in Newberg will be for 12k instead of 11k. 1k this way," according to the document. Most payments went by wire from Zagaryuk's company to Co-Conspirator 1's personal company, including $51,472 on Nov. 13, 2023, and $41,989 on Dec. 15, 2023, it says.

'Pay the Piper' and a Coffee Shop Meeting

The factual basis says Co-Conspirator 1 at times asked for money urgently, texting "I have to pay the piper soon" and "Ilya, need a favor on behalf of PM, she is asking for an advance of 10k." It explains that "PM" refers to a Postal Service facilities engineer. Zagaryuk understood those messages to mean Co-Conspirator 1 was paying a Sacramento-based Postal Service facilities engineer, identified as "U.S.P.S. Employee 1," who assigned repair projects in Oregon and elsewhere, the document says.

On or around Feb. 1, 2024, Zagaryuk met that engineer at a Sacramento-area coffee shop, where they discussed how much he was paying Co-Conspirator 1, according to the filing. Later that day, it says, Co-Conspirator 1 asked him to raise the kickbacks to "20%-25%" of the cost of Postal Service work.

About two weeks later, Co-Conspirator 1 told Zagaryuk there was an investigation, advised him not to talk to investigators and told him to "wipe" his phone, saying he had already wiped his own, according to the document. Zagaryuk did not delete his messages, it says.

What He Agreed To

Under the agreement, Zagaryuk waived indictment, agreed to cooperate with the government, and the government agreed to recommend a sentence at the low end of the guideline range. The department's release says he is jointly and severally liable for restitution "with co-defendants," but the public documents do not name Co-Conspirator 1, the prime contractor or the facilities engineer, and the documents do not say whether the engineer has been charged.

The case was investigated by the Postal Service Office of Inspector General and the FBI's Sacramento office and is being prosecuted by the Justice Department's Antitrust Division and the U.S. Attorney's Office for the Eastern District of California.

Sources: Justice Department press release (Oct. 27, 2026): https://www.justice.gov/opa/pr/contractor-pleads-guilty-paying-kickbacks-related-us-postal-service-facilities-repair ; Plea agreement and factual basis, U.S. v. Zagaryuk, No. 2:26-cr-00161 (E.D. Cal., filed Oct. 27, 2026): https://storage.courtlistener.com/recap/gov.uscourts.caed.500901/gov.uscourts.caed.500901.21.0.pdf ; Court docket: https://www.courtlistener.com/docket/74787120/united-states-v-zagaryuk/