re: Cloud Payroll Service goes out of business, steals money from customers on the way out

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MyPayrollHR CEO Arrested, Admits to $70M Fraud

...Michael T. Mann, the 49-year-old CEO of Clifton Park, NY-based MyPayrollHR, was arrested this week and charged with bank fraud. In court filings, FBI investigators said Mann admitted under questioning that in early September — on the eve of a big payroll day — he diverted to his own bank account some $35 million in funds sent by his clients to cover their employee payroll deposits and tax withholdings.

... “While stating that MyPayroll was legitimate, he admitted to creating other companies that had no purpose other than to be used in the fraud; fraudulently representing to banks and financing companies that his fake businesses had certain receivables that they did not have; and obtaining loans and lines of credit by borrowing against these non-existent receivables.”

“Mann estimated that he fraudulently obtained about $70 million that he has not paid back. He claimed that he committed the fraud in response to business and financial pressures, and that he used almost all of the fraudulently obtained funds to sustain certain businesses, and purchase and start new ones. He also admitted to kiting checks between Bank of America and Pioneer [Savings Bank], as part of the fraudulent scheme.”

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