ALBANY, N.Y. (NEWS10) – Derek Schwartz, 52, of Coppell, Texas, was indicted on Thursday over allegations that he conspired with Michael Mann—the former CEO of MyPayrollHR—to defraud lenders.
Schwartz is charged with four counts of wire fraud, and one count of conspiring to commit wire fraud. Authorities say he got millions in loans from financiers in New York and Colorado by falsifying receivables. The Department of Justice said Schwartz and Mann falsely claimed millions in revenue owed from a company called Optum. Schwartz allegedly recruited an Optum employee to validate false invoices created by Mann.
Schwartz is charged with working with Mann to fabricate vendor names and contact information. Schwartz himself was a high-level executive at Optum before working for Mann in 2013. The DOJ says that Luke Steiner, the Optum employee recruited by Schwartz, regularly made phony verifications under Schwartz’s direct for six years, through August 2019.
Steiner, age 33, of Minneapolis, Minnesota, pled guilty in February 2020 to conspiring with Mann, and is pending sentencing.
The indictment further alleges that Schwartz recruited at least two other employee plants to validate false documents in 2014 and 2015. It says that from 2014 through 2019, he pretended that a company he operated had a history of payments with Mann’s company, though no such payments existed. Authorities said he regularly lied to lenders about the relationship even after his company stopped operating altogether.
Schwartz faces up to 20 years in prison if he’s convicted. Mann previously pleaded guilty to charges against him, being sentenced to 12 years in US District Court. He ultimately could spend up to 24 years behind bars.