Payroll service provider MyPayrollHR suddenly closes without warning and stiff $ 35 million of employees at thousands of companies
- The FBI confirmed Wednesday that it is investigating Clifton Park, a New York-based payroll service provider after it closed its doors a week ago
- The company processed wage deposits for 4,000 companies across the country before closing Friday without warning
- Thousands of employees across the country had withdrawn money from their accounts instead of depositing it
- The total estimated value of the wage loss is $ 35 million
FBI managers confirmed on Wednesday that MyPayrollHR is investigating less than a week after the company stopped without warning, causing thousands of its business customers across the country to struggle to find ways to pay their employees.
The Clifton Park, New York-based payroll service provider – a subsidiary of ValueWise Corp. – closed its doors on Friday after withdrawing funds with a total estimated value of nearly $ 35 million from the bank accounts of thousands of employees working for around 4,000 corporate clients across the country.
The problem started on September 4, when Cachet Financial Services – the California-based external company that distributes money for MYPayrollHR – received an unusual request to send a total of $ 26 million to an account at Pioneer Savings Bank. Krebson security.
Cachet questioned Pioneer Savings about the down payment and was told that MyPayrollHR's bank account was frozen.
Payroll service provider MyPayrollHR stopped its activities Friday without warning, causing thousands of its business customers and their employees across the country to struggle to find ways to pay their employees
A photo of the closed offices of MyPayrollHR in Clifton Park, New York
The MyPayrollHR payroll file has still instructed its customers' banks to withdraw $ 26 million from Cachet's account, although the deposits from MyPayrollHR's customer banks have not yet been made.
Cachet asked twice to cancel the transaction after the initial request for reversal was formatted incorrectly.
Several banks have processed both refund requests, which means that many employees at companies using MyPayrollHR have withdrawn salary payments for a month.
The predicament has confused many employers and deprived their employees, who are struggling to come up with financial solutions to pay their bills and feed their families.
Brooke Taney from Albany, New York, was one of the thousands of employees who had money from her bank account due to the MyPayrollHR debacle
The FBI issued a statement on Wednesday announcing that it is investigating what happened to MyPayrollHR
& # 39; I checked my bank account all day today, just waiting for the money that was returned. I didn't think they would try again, & Brooke Taney from Albany, New York, told WTEN on Monday.
The FBI issued a statement on Wednesday announcing that it is looking for & # 39; information from business owners who may have suffered a financial loss due to the alleged activity of MyPayrollHR.
The US Department of Labor also agreed on Wednesday to comment that its leaders are aware of the situation in Clifton Park.
& # 39; The state of New York is investigating and responding to this situation & # 39 ;, is the statement. & # 39; Due to the potential magnitude of the situation, the pay and hour division will continue to monitor the situation and will be willing to coordinate with our counterparts in the state if they cannot resolve the matter quickly. & # 39;
Robert Cohen, co-owner of the Helping Angels nursing home in Albany, spent hours wandering the metropolitan area to give their employees money after MyPayrollHR had not.
& # 39; It sounds like something you would hear in a movie, & # 39; Cohen said to WTEN. & # 39; I hope they are brought to justice. I hope justice can be served. & # 39;
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