Two months ago, I blogged about MyPayrollHR, a company run by an alleged fraudster, which stole the paychecks of thousands of people. The overall number may be a quarter of a million.
Some of the companies dug deep and absorbed the losses themselves. One business owner, Brad Mete, and his partners coughed up over $250,000 to ensure that their employees got the money they earned.
The CEO, a guy named Michael Mann, directed $26 million in other people's payrolls into his own accounts.
He's been charged with fraud. Mann has admitted to stealing about $70 million over the last nine years.
With any luck, he'll get more than the usual white-collar wrist slap.
The company that did the bank processing for the fraudster and other companies, Cachet Financial, got out of the business last month. They gave almost no notice, which screwed over even more employers.
A lot of this modern third-party processing shit is based on trust. One crook can pull it all apart. Companies once did this all themselves, but they figured to save themselves money by firing Janet and her sisters in the payroll department and having some shadowy critters on the Internet do the work for them.
If you work for a company that outsources its payroll processing, you probably should have a couple of paychecks' worth of money stashed aside. (Which you should have, anyway.) That way, if payroll has a glitch like a criminal like Mann diverting the payroll, you won't be kicked out of your home or have the heat turned off.
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