U.S. District Court Judge Christine Arguello sentenced Schmauder to 30 months, or two and a half years, in federal prison, the maximum according to sentencing guidelines, for stealing approximately 11,000 packages over two years.
Arguello required Schmauder to undergo mental health treatment and take his medication while on a period of three years of supervised release following his prison term.
The postal service estimated losses at $283,913, but Schmauder will not be forced to pay restitution.
Federal law allows judges to skip the restitution process if it's too difficult or complex to distribute restitution.
Schmauder pleaded guilty to a charge of theft of mail in August.
The 48-year-old former postal service worker had a long career with the USPS before being caught by special agents in January 2010, when the 9Wants to Know investigators began following the case.
Schmauder targeted packages sent from retailers like Amazon.com, looking for DVDs and CDs he could re-sell. Additionally, Schmauder stole Victoria's Secret lingerie which he gave to his wife. He admitted to stealing as many as 50 packages a night for two years.
Prosecutors opposed Schmauder's plea for leniency based on his mental health issues, saying that he stole so that he could finance a better lifestyle.
"He has an obligation to live within his means," Assistant U.S. Attorney Kurt Bohn said. "[He] made decisions over two years to be a thief. He stole from more than 11,000 individuals."
"I am very sorry that I took from them. I am sorry for the hardships I put on those families," Schmauder said in court. "I can't believe my life spiraled out of control."
Schmauder resold the stolen items to Angelo's Movies, Music and Gifts, a Littleton store which bills itself as the largest independent music store in the Denver area.
Receipts showed Angelo's paid Schmauder $85,174 for 11,829 items.
Angelo's involvement was referred to Littleton Police but charges were not filed against anyone working there.
"I never really inquired to this guy as to where he was getting his merchandise," owner Angelo Coiro told 9Wants to Know investigator Kyle Clark earlier this year. "We scrutinize people a hell of a lot more now than we used to."
Postal inspectors said Schmauder's night shift position allowed him to work in a more isolated setting with less management oversight, but stopped short of saying there was a failure of security at the Highlands Ranch post office.
Schmauder will report to prison early next year.
A strange scene played out in court Tuesday.
Following her sentence, Judge Arguello ordered Schmauder remanded into custody immediately for his own safety. The judge cited a claim by Schmauder's attorney that his mental illness had made him suicidal.
An audible cry was heard from Schmauder's friends and family in the courtroom and his attorney stepped in to argue that her client had been, but was no longer, suicidal.
Schmauder then came to the podium himself and raised his voice at the judge insisting he be allowed to spend the holidays tending to matters with his family before reporting to prison.
When Arguello inquired as to his current mental state, Schmauder said he had been taking his medication for months, but didn't hold back on the emotion.
"I am angry. I am upset," Schmauder told the judge. "My life is ruined."
Arguello allowed Schmauder to go home with his family and friends and report to prison when ordered, but not until after warning his supporters in the courtroom not to allow him to lose control of his mental health again.
"You all let him down because you wouldn't give him the tough love he needed," Arguello said. "If I let him walk out of here, it's on your hands."
(KUSA-TV © 2010 Multimedia Holdings Corporation)