The former boss behind a $70m payroll fraud that left thousands of people without paychecks has been sentenced to 12 years in prison and ordered to pay $101m in restitution.
In September 2019, cloud-based payroll provider MyPayrollHR, of Clifton Park, New York, ceased trading, but only after withdrawing wages from bank accounts of the employees of thousands of its small business clients.
MyPayrollHR fraud
MyPayrollHR boss charged with $70m bank fraud
Payroll provider withdraws wages from thousands of clients’ employees
Three weeks later its founder and former CEO Michael Mann was arrested and charged with fraud. Mann pleaded guilty last year to 12 counts of wire fraud conspiracy, aggravated identity theft, bank fraud and false tax declarations.
Last week Mann was sentenced to 12 years in prison, far less than the 22 years that prosecutors had sought. Hundreds of companies across the US used the MyPayrollHR’s services and lost money when the payroll provider collapsed, and thousands of their employees lost money, either temporarily or permanently.
Bonnie Rosengrant, who had run a diner in New Hampshire for eight years when MyPayrollHR collapsed provided one of 165 victim impact statements submitted to the court in advance of sentencing. She told New York state’s Daily Gazette: “He destroyed a lot of people’s lives and livelihoods.”
Rosengrant spent approximately $30,000 of her savings to cover lost wages and taxes for her employees, and does not expect to receive any restitution money.
Tricia Canavan, president of United Personnel Services, a specialist in manufacturing recruitment in Springfield, Massachusetts, described in court the impact Mann had on the company her parents founded in 1984. She said it had incurred $500,000 in losses, none of them recoverable.
Mann read a brief statement to the court: “First, I want to say to Ms Canavan I’m very sorry for what you went through. I caused that. I feel sick when I think of the damage I’ve done.”
Judge Lawrence Kahn ordered Mann to self-report to a prison on 21 September to begin his sentence.
