42.6 F
New York
Friday, March 29, 2024

CEO Behind MyPayrollHR’s Collapse Charged by Feds with $70M in Bank Fraud

Related Articles

-Advertisement-

Must read

By: Casey Hardwick

Michael T. Mann has been charged with being the alleged scammer behind MyPayrollHR’s collapse.

Federal prosecutors said the vast $70 million bank fraud began almost 10 years ago.

Mann, 49, was reportedly released on bond following the carnage in early September at his payroll company left thousands across the nation without paychecks.

“As part of his con, Mann allegedly diverted clients’ payroll payments away from hard-working customers depending on the dough to a separate bank account he controlled, prosecutors said,” according to the New York Daily News. “Many victims saw more than one of their direct-deposit checks reversed, the Daily News previously reported. Others lost not only their earnings but also their jobs with the sudden shuttering of HireFlux, a North Carolina-based staffing firm partially owned by Mann that employed per diem nurses around the New York metro area.”

According to the complaint released Monday, Mann fraudulently obtained at least $70 million in loans from banks and other financial institutions by creating fake companies with non-existent receivables starting in 2010 or 2011.

When MyPayrollHR closed on September 5, “about $30 million in paychecks due to the company’s clients went missing. According to the Journal, about 8,000 employees at 400 different companies were impacted. The FBI launched an investigation into MyPayRollHR and raided Mann’s home on September 16 in search of evidence,” reported businessinsider.com.

According to the court filing, Mann told law enforcement that he had transferred the money needed to fund the payroll payments to one of his personal bank accounts. “Mann apparently said he transferred the money to an account controlled by Pioneer Bancorp Inc. to temporarily address an outstanding debt. However, Pioneer froze Mann’s account, preventing him from cycling the money back out to the appropriate payroll accounts, per the report,” businessinsider.com added. “The Journal reports that Bank of America Corp also froze Mann’s accounts when it was determined that he was transferring millions of dollars between accounts at Bank of America and Pioneer. Cachet, the firm responsible for dispersing the paychecks, reversed the deposits to MyPayrollHR’s clients when it could no longer access the money, the report says.”

According to the complaint filed in U.S. District Court in Albany on Friday, Mann “began borrowing “large sums of money” starting around 2010. Mann insisted that MyPayrollHR was a legitimate company, but admitted to creating other companies “that had no purpose other than to be used in fraud,” the complaint says,” reported pymnts.com. “Mann did not enter a plea and was released on a $200,000 bond secured by his home and two cars. He faces up to 30 years in prison, a maximum $1 million fine and five years of post-release supervision, the WSJ reported.”

balance of natureDonate

Latest article

- Advertisement -