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A New York-based payroll services provider is accused of abruptly shutting down last week and leaving thousands of employees short of $26-35 million.
The FBI has launched a probe into MyPayrollHR after the company allegedly left employees of nearly 4,000 businesses without their hard-earned cash.
“The FBI is seeking information from business owners who may have suffered financial loss due to the alleged activity of MyPayrollHR and its affiliates,” the FBI’s Albany bureautweetedon Wednesday. “Please email MyPayrollHRVictims@fbi.gov with company contact information, number of employees, and the estimated financial impact to the business and its employees.”
New York Gov. Andrew Cuomo had previously enlisted federal help, calling on the Department of Financial Services to investigate MyPayrollHR.
“The sudden and unexplained shutdown of MyPayrollHR in Clifton Park is disturbing and completely unacceptable. Its reckless actions have left employees across the state and the nation with negative bank accounts and forced businesses who depend on its payroll services to scramble to find ways to compensate their employees,” Cuomo said in astatement. “This is not how we do business in New York, and we will not allow these bad actors to take money away from the hard-working people in this state.”
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Wendy Slavkin, general counsel for the automated clearing house Cachet Financial Services, explained the trouble toTechTarget, saying that MyPayrollHR uses Cachet to facilitate its electronic payments.
Typically, a payroll firm like MyPayrollHR will tell the clearing house to take money out of an employer’s account, and that money is then moved into a settlement or holding account under the clearing house’s control before it goes into employee accounts.
MyPayrollHR
Meanwhile, victims of the shutdown are struggling in the aftermath, with many finding it difficult to pay mounting bills.
“I tapped out my entire savings account to pay my rent for this month,” Brooke Taney, a manager at B-rads Bistro, told local CBS affiliateWRGB. “This is our money and I shouldn’t have to fight to get back money that I worked for.”
Cindy Foreback, who also said her paycheck disappeared, added to ABC affiliateWTAE, “People can’t pay their rent. They can’t buy food for their kids. A lot of people live paycheck to paycheck, and they didn’t have the money in their accounts to cover the reversal, so they’ve been getting hit with fees left and right.”
Slavkin told WTAE that employees should be reimbursed within days.
Cachet Financial Services and the New York Department of Financial Services did not immediately return PEOPLE’s request for comment. MyPayrollHR and its parent company, ValueWise Corporation, could not be reached for comment.
source: people.com
