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Payroll company abruptly closes, leaving thousands without paychecks

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https://www.abc12.com/content/news/Payroll-company-abruptly-closes-leaving-thousands-of-employees-without-paychecks-559888671.html

 

FARMINGTON HILLS (WJRT) (09/09/19) - The abrupt closure of a company that processes payroll for thousands of employees at other businesses is leaving people looking for the money they earned.

 

One of them is Amanda Anderson, who has had several sleepless nights over the past week. With none of the pay she earned getting to her bank account, she is struggling to hide her worry from her daughter.

"She's 11. She looks at me and says to me, 'Mom are you going to be OK?' That was hard, panicking a little on the inside while saying of course everything is fine," Anderson said.

The nightmare began for the single mom of two last Thursday, when she opened up her bank account to find she the paycheck she had received the previous week had been removed from her account.

Anderson immediately reached out to her employer and soon learned the problem was more than a glitch. MyPayrollHR, the company that provided payroll for her employer, had suddenly closed.

"The employees for HR showed up to work to a closed office and from understanding, received an email that said, 'Hey our doors are shut, you don't have a job.' From there the accounts that they were paying from were all frozen," Anderson said.

That's when Anderson found out her paycheck had been reversed twice by a third-party bank she didn't recognize -- Cachet Financial Services.

"They then turned around and essentially repossessed the funds they had already paid out," Anderson said.

That left Anderson with a negative balance of $800. Thousands of other employees across the country found negative bank accounts as well.

"They basically tell you, well it was our money, we just took it back, sorry, you are going to have to do what you have to do, not our problem," Anderson said.

 

https://www.foxnews.com/us/fbi-investigates-payroll-company-accused-of-stiffing-35m-from-small-businesses

 

The FBI and the New York State Department of Labor confirmed this week they are investigating allegations that a widely-used payroll company diverted nearly $35 million in employee pay to its own bank account before abruptly closing up shop, leaving more than 250,000 employees across the country without paychecks.

According to authorities, MyPayrollHR, based in Clifton Park, N.Y., shut down last week after direct-deposit company Cachet Financial Services accused it of moving $26 million from small-business employee paychecks to one of its own bank accounts.

In some cases that meant small business employees did not receive their regular direct deposit paychecks at the end of August. To make matters worse, many of those same employees found their accounts had been dinged twice, leaving their bank accounts in the red.

The second withdrawal was due to a technical glitch that has since been corrected, Cachet's general counsel Wendy Slavkin told NBC News. Slavkin added that MyPayrollHR still hadn't made the original payments and that's when the company called in the feds.

In a cryptic message last week, MyPayrollHR told its 4,000 clients that "we are no longer able to process any further payroll transactions."

The now-defunct New York operation also allegedly stiffed National Payment Corporation, a Florida-based firm that handles $9 million in tax withholdings for MyPayrollHR clients.

"NatPay was provided information that MyPayrollHR and Cloud Payroll may have been the victims of fraud committed by their holding company ValueWise, whose CEO and owner is Michael Mann," NatPay told KrebsOnSecurity. "NatPay immediately put in place steps to manage the orderly process of recovering funds (and) has more than sufficient insurance to cover actions of attempted or real fraud."

In Tennessee, the paycheck debacle has left Tanya Willis' animal shelter at a standstill, CBS News reported.

"It hurts," Willis said. "This isn't something that we were prepared for."

She said she's been trying to contact MyPayrollHR but that "all of their phone lines were down and all of their social media accounts were wiped off."


-- 

Christopher Parrish
Community Manager / Web AdminTowing Information Network
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