Victims of MyPayrollHR collapse react to CEO’s guilty plea

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ALBANY, N.Y. (NEWS10) — The collapse of MyPayrollHR victimized small businesses that were left scrambling when thousands of employees didn’t get their paychecks. Following CEO Michael Mann’s guilty plea to a dozen federal bank fraud charges, some victims say they still don’t expect to ever get their money back.

Melanie O’Malley is best known for the sweet treats she bakes for her business, O’Malley’s Oven, but she moonlights as the moderator of a Facebook page for victims of the MyPayrollHR collapse. 

“We’re intrigued to see what will happen with Michael Mann, but at this point, it’s like tunnel vision on survival with the whole COVID thing,” she said. 

Nearly a year ago, she saw $1,000 plus $400 in taxes yanked from her account. She was only using MyPayrollHR to pay herself and considers herself lucky after hearing from those who were left penniless. 

“One individual was expecting to be paid $400, and instead of getting paid $400, his account was debited $1,200 dollars, and he was late on his mortgage,” she said.

Many companies did right by their employees at great expense to themselves. Owner of home care company Visiting Angels, Robert Coen, delivered paper checks to all of its caregivers, an unforeseen expense.  

“They had children that needed grocery money for their families; this was a devastating problem that I, as their employer, had to resolve,” said Coen. 

He’s out $15,000 to $20,000 in payroll and taxes. The federal government has filed a lawsuit against Pioneer Bank claiming it “wrongfully seized” millions of dollars in tax funds in response to the MyPayrollHR collapse.  

“If, hypothetically, there’s money just sitting in Pioneer Bank that would be a lifesaver,” said O’Malley.

She wants those funds and any interest they’ve accrued to be released to the victims. Going forward, O’Malley says employees should know that when you set up a direct deposit, it’s a two-way street.  

“Unless you go to the bank and specify that that entity is deposit only,” she said. 

Coen says the industry needs more oversight and regulation so something like this doesn’t happen again, but he says he’s glad to see Michael Mann held accountable.  

“There is closure when it comes to that side of it; that he didn’t get away with the crimes,” he said.

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