That payroll processing firm collapse? They arrested the CEO. $70,000,000 fraud.

[thewayne]

I wrote about this on September 13, at that time the company collapsed on a $26mil bounce. Turns out this CEO has been kiting checks on the float since 2010 or 2011 to the tune of $70mil!

He turned himself in with his attorney after talking to investigators for the last couple of weeks, so apparently his location has been known since MyPayrollHR collapsed. Here's the salient points from the report of his arrest:

According to the complaint filed by federal prosecutors:

--Mann fraudulently obtained at least $70 million in loans from banks and other financial institutions.
--As part of that alleged fraud, he created companies that "had no purpose other than to be used in the fraud."
--He also fraudulently represented to banks and financing companies that his fake businesses had receivables that they did not have.
--He obtained loans and lines of credit by borrowing against these non-existent receivables.

So basically MyPayrollHR, and everything else he's done for the last decade, was solely created for the purposes to create fraud. Whou'da thunk it with a company name like MyPayrollHR? Sounds like a nice upstanding firm name to me. /s

https://www.bizjournals.com/albany/news/2019/09/23/michael-mann-arrested-charged-bank-fraud.html

https://krebsonsecurity.com/2019/09/mypayrollhr-ceo-arrested-admits-to-70m-fraud/

Comments

[dewline]

What the Hell?

[thewayne]

That’s one skilled operator to steal that much on writing bad checks on the float! I’m really surprised that the banks in question never caught it as some of their fraud auto-detect software is supposed to notice things like that.

I remember reading Frank Abagnale’s book, Catch Me If You Can, and he printed his own checks, complete with MICR ink! He coded one check with bank number routing numbers in the lower left that didn’t match the bank number in the upper right, and it bounced back and forth between banks for so long until it became so worn that the machines could no longer read it, and when a human operator recognized that the numbers didn’t match, THEN they were able to stop that particular fraud.

While I do not, as a rule, admire criminals, Frank was particularly brilliant, and he never went after small businesses or individuals. He also served his time in prison and is now working as a security consultant helping people shore up their ‘people’ security to prevent social engineering attacks.

I highly recommend his book and I re-read it every five years or so. It was made into a movie many years ago starring DeCaprio and Tom Hanks. Not as good as the book, no surprise, but not too bad a movie.

[silveradept]

I'm not surprised, and yet, I'm pretty sure the people working on that end are used to terribly-named firms such that the name itself didn't raise any flags.