Payroll boss sentenced for laundering $1bn-plus

He left thousands of employees in financial distress, according to the office of New York’s chief prosecutor, the attorney general.

Mann of Northville, Michigan, owned or operated more than a dozen companies, including payroll service providers ValueWise Corporation and MyPayrollHR.com at Clifton Park, New York.

He laundered money embezzled from payroll companies by diverting it through numerous business accounts which he controlled to repay millions of dollars in fraudulently obtained loans, according to the attorney general’s office.

But in September 2019 one of his banks became suspicious and froze a number of his accounts, ultimately exposing his fraudulent conduct.

“Hundreds of businesses that entrusted their payroll to Mann’s entities, along with thousands of employees, were left in the lurch. Some businesses were forced to cease operations as a result,” the office added.

It stated that in August 2019 over 800 employers paid more than $28m in payroll that Mann diverted for his own benefit. This money was intended for employees, including those working for ambulance services, health care providers, religious institutions, nurseries, restaurants and hotels. 

“An audit of more than 35 accounts controlled by Mann revealed that he conducted hundreds of transactions on a near-daily basis in order to move stolen funds through shell and shelf companies, in addition to legitimate or quasi-legitimate businesses he ran, in order to continue his criminal activity,” the office said.

According to the office, Mann’s crimes included:

• stealing payroll funds held in trusts for client employers to fraudulently inflate company assets and to repay stolen funds from other clients;
• providing materially false information and/or concealed material information to secure millions of dollars in commercial financing;
• providing fictitious invoices to financial institutions to fraudulently inflate assets as collateral for his entities and to repay stolen funds from client employers; and
• wrongfully withholding millions of dollars from at least two automated clearing houses (ACH) by redirecting ACH payments to accounts controlled by Mann.

He was jailed for eight to 24 years in prison. He was also ordered to pay more than $100m in restitution to his victims.